On September 4, Judge Mariana Pfaelzer of the U.S. District Court for the Central District of California entered an order dismissing with prejudice the Federal Housing Finance Agency’s claims against UBS Securities Inc. pursuant to a settlement agreement between the parties. The dismissal bars the remaining non-settling defendants (which include Bank of America, Citigroup and Deutsche Bank Securities, among others) from bringing claims for indemnity or contribution against UBS, and likewise bars UBS from bringing claims for indemnity or contribution against the remaining non-settling defendants. FHFA originally filed the action in the Supreme Court for the State of New York in 2011, alleging misstatements and omissions about loan quality in connection with RMBS purchased by Fannie Mae and Freddie Mac. The case was subsequently removed to federal court and consolidated into the FHFA multidistrict litigation before Judge Pfaelzer. Order.
Judge Mariana Pfaelzer
District Court Denies Countrywide’s Motion to Dismiss AIG Suit
On May 6, Judge Mariana Pfaelzer of the United States District Court for the Central District of California allowed American International Group, Inc. (AIG) to proceed with several of its claims against Bank of America and related entities arising from AIG’s purchase of Countrywide-issued RMBS. The court held that AIG has standing to bring suit, rejecting the argument that AIG had assigned its claims to the Federal Reserve Bank of New York. Among other causes of action, the court upheld certain claims for fraudulent inducement on the grounds that AIG adequately alleged misstatements regarding loan-to-value ratios, compliance with underwriting guidelines, appraisal values and credit ratings, but dismissed fraud claims as to borrower-provided owner-occupancy data. The court also dismissed AIG’s claims based on alleged oral misrepresentations for failure to specify the speakers, and dismissed AIG’s fraud claims against two underwriters for failure to allege awareness of any misconduct at Countrywide. Order.