On August 12, 2016, Massachusetts Mutual Life Insurance Co. (“MassMutual”) and RBS jointly moved to dismiss MassMutual’s $235 million RMBS claim, stating that the parties had reached a confidential settlement agreement. MassMutual filed the lawsuit in 2011, alleging violations of the Massachusetts Uniform Securities Act. MassMutual claimed that the defendants made material misrepresentations about the characteristics of mortgage loans that RBS securitized in transactions in which MassMutual invested between 2005 and 2007. The court entered a final dismissal order on August 15, 2016. Joint Motion of Dismissal. Order of Dismissal. MassMutual settled similar claims against Barclays Capital Inc. on March 29, 2016 (covered here).
MassMutual
Barclays and MassMutual Settle RMBS Litigation
On March 29, Barclays Capital Inc. and Massachusetts Mutual Life Insurance Co. jointly moved pursuant to a confidential settlement agreement for dismissal of an action brought by MassMutual. MassMutual brought claims under the Massachusetts Uniform Securities Act concerning $175 million in RMBS. MassMutual alleged that Barclays had made false representations about the quality and risk of default of the underlying loans. Motion for Dismissal. Complaint.
Court Dismisses Occupancy Status Claims Against Countrywide
On August 17, Judge Mariana R. Pfaelzer of the United States District Court for the Central District of California granted in part and denied in part the motion of Countrywide and Bank of America to dismiss an action brought by MassMutual in connection with its alleged purchase of RMBS. Judge Pfaelzer held that Countrywide could not be liable for accurately repeating borrower-provided occupancy information in its offering documents where the offering documents specifically attributed the statements about owner occupancy to the borrowers. Judge Pfaelzer further held that MassMutual failed to sufficiently plead Bank of America’s liability as a successor to Countrywide, thus warranting dismissing Bank of America from the suit. The court held, however, that MassMutual had sufficiently pled claims under the Massachusetts Uniform Securities Act for alleged misrepresentations as to loan-to-value ratios and originator compliance with underwriting guidelines. Decision.
Mass. Mutual Life Insurance Files New RMBS Complaint
On May 23, 2011, Massachusetts Mutual Life Insurance Co. (“MassMutual”) filed a complaint in the U.S. District Court for the District of Massachusetts, alleging violations of the Massachusetts Uniform Securities Act in connection with MassMutual’s purchase of $13 million in RMBS from HSBC and its subsidiaries. MassMutual alleges that in marketing the sale of the RMBS, defendants misrepresented that the underlying loans were prudently underwritten and had certain characteristics, including specific loan-to-value ratios and owner-occupancy statistics. Complaint.
Massachusetts Mutual Life Insurance Co. Files Two New RMBS Actions
On May 6, 2011, Massachusetts Mutual Life Insurance Co. filed two complaints in the U.S. District Court for the District of Massachusetts, both alleging violations of the Massachusetts Uniform Securities Act in connection with MassMutual’s purchases of RMBS. The first action concerns RMBS sponsored by Impac Funding Corporation, and asserts claims against Impac, one of its affiliates, two of its officers who signed the relevant registration statements, and J.P. Morgan Securities as successor-in-interest to two of the RMBS underwriters. The second action concerns RMBS originated by non-party American Home Mortgage Investment Corp. (“AHM”), and asserts claims against one of the RMBS sponsors, several depositors and underwriters, and several of AHM’s and Bear Stearns’s officers who signed the relevant registration statements. MassMutual alleges that in marketing the sale of the RMBS, defendants misrepresented that the underlying loans were prudently underwritten and had certain characteristics, including specific loan-to-value ratios and owner-occupancy statistics. MassMutual v. Impac Complaint. MassMutual v. Goldman Complaint.