On February 3, Judge Jed S. Rakoff of the United States District Court of the Southern District of New York denied Bank of America Corporation’s and Rebecca Mairone’s motion for judgment as a matter of law, or, in the alternative a new trial. The jury found Bank of America and Mairone liable under the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) for the sale of mortgage loans to Fannie Mae and Freddie Mac before the financial crisis. Judge Rakoff found that the jury’s October 23, 2013 verdict was supported by sufficient evidence. Order.
Judge Jed Rakoff
SDNY Holds Trustee Cannot Evade Section 546(g) Safe Harbor
On June 11, Southern District of New York Judge Jed Rakoff dismissed the complaint of the Trustee for the SemGroup estate seeking to avoid a novation made to Barclays pre-bankruptcy under a swap agreement. The Court held that the pre-bankruptcy transaction constituted a safe harbored transfer made in connection with a swap agreement and thus could not be avoided by the estate. This case is one of a number in recent years that treats the safe harbors, and particularly the section 546 safe harbors, as broadly protective of non-debtor transferees in financial transactions. For more information, please click here.
Federal Court Dismisses United States Action Against Countrywide In Part
On May 8, Judge Jed Rakoff of the United States District Court for the Southern District of New York dismissed claims by the United States for damages and civil penalties under the False Claims Act against Countrywide and Bank of America. The court held that the government could proceed with its claims for violations of the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) of 1989. FIRREA permits the government to recover civil penalties for fraudulent activities that “affect” federally insured financial institutions. The government alleged that Countrywide’s mortgage origination business had defrauded Fannie Mae and Freddie Mac. The court noted it would explain its reasoning at a later date. Order. Amended Complaint.
District Court Grants J.P. Morgan’s Motion for Summary Judgment Against Dexia in RMBS Suit
On April 2, Judge Jed Rakoff of the United States District Court for the Southern District of New York largely granted J.P. Morgan’s motion for summary judgment in RMBS litigation brought against it by Dexia, a Belgian bank, and FSA Asset Management. In a two-page order, the district court dismissed with prejudice all of Dexia’s claims against the defendants, but permitted FSA’s claims as to five RMBS certificates to proceed. The court indicated that it would issue a written opinion explaining the reasons for these rulings in due course. Order.