1933 Act

RMBS Cases Against UBS Dismissed as Time-Barred

On July 31, Judge Cecchi of the District of New Jersey dismissed with prejudice as time-barred claims filed by the Pension Trust Fund for Operating Engineers alleging misstatements and omissions in the offering documents for US$5 million in RMBS. Judge Cecchi determined that there were adequate storm warnings more than a year prior to the date when plaintiffs filed their claims that the originators of the loans underlying the securities at issue had abandoned their underwriting guidelines. The court held that this was sufficient to put the plaintiffs on inquiry notice and to trigger the running of the statute of limitations for their 1933 Act claims. A previous complaint had been dismissed as time barred with leave to amend, but the court determined that a second amended complaint would be futile and dismissed with prejudice. Order.

IndyMac Reaches Partial Settlement of RMBS Claims

Five former IndyMac executives have reached settlements with the plaintiffs in two RMBS class actions. On July 31 the lead plaintiff in the consolidated class actions filed a motion for approval of a US$6 million settlement of outstanding claims brought under 1933 Act Sections 11, 12(a)(2) and 15. In their motion for approval, Plaintiffs argue that the settlement is reasonable, among other reasons, because of concerns that the insurance policies covering the individual defendants will soon be exhausted. Even if the settlement is approved, the case will continue against various non-settling defendants, including the underwriters for the RMBS transactions at issue. Motion.