Motion to Dismiss MBS Action Granted in Part

On November 30, 2010, Judge Jed Rakoff of the United States District Court for the Southern District of New York granted ABN AMRO’s and J.P. Morgan’s motions to dismiss claims under Section 11 of the Federal Securities Act of 1933. Although the Court had sustained Section 11 claims against other underwriters on other RMBS in the same litigation, the Court noted that the plaintiffs had not alleged a materially false or misleading statement by ABN AMRO or J.P. Morgan. It stated that their offering “differed materially from the others at issue in that no loan originator contributed more than 20% of the loans” to the offering pool, and, accordingly, no disclosures regarding the underwriting practices of any loan originator were required or included in the offering documents. Decision.