MetLife

Federal District Court Rules against Designation of MetLife as a “SIFI” under Dodd-Frank Act

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On March 30, the D.C. federal District Court ruled against the designation by the Financial Stability Oversight Counsel (“FSOC”) of MetLife as a “systemically important financial institution” under the Dodd-Frank Act.  The FSOC has designated just four non-banks as SIFIs, but MetLife was the only one to file a lawsuit protesting it.

The overall impact of the ruling remains unclear, however, because it is under based on longstanding concerns about the protection of the firm’s proprietary business information and it widely anticipated that the FSOC will appeal the ruling.

Morgan Stanley’s Motion to Dismiss $757 Million RMBS Suit Denied in Part

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On July 13, Justice Eileen Bransten of the New York Supreme Court denied Morgan Stanley’s motion to dismiss MetLife’s common law fraud and fraudulent inducement claims.  MetLife alleges that Morgan Stanley knowingly misrepresented the quality of over $757 million RMBS that it underwrote or sponsored.  The court held that MetLife sufficiently alleged reasonable reliance, a material misrepresentation, scienter and loss causation.  However, Justice Bransten granted the motion to dismiss as to claims brought by the Connecticut subsidiary of MetLife, finding the claims barred by Connecticut’s three-year statute of repose for fraud claims. Decision.

MetLife Sues Morgan Stanley Over $757 Million in RMBS

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On April 25, 2012, Metropolitan Life Insurance Co. (“MetLife”) filed suit in New York State Court against Morgan Stanley. MetLife alleges that Morgan Stanley misrepresented the quality of the mortgage loans underlying RMBS certificates that MetLife bought in nine offerings. Specifically MetLife alleges that Morgan Stanley misrepresented that the loans were originated according to underwriting standards described in the offering documents and that the appraisals of the properties underlying the loans had been overstated. MetLife further alleges that Morgan Stanley knew of these misstatements as a result of due diligence it conducted in connection with the offerings. MetLife asserts claims for fraud, fraudulent inducement, aiding and abetting fraud, and negligent misrepresentation.  Complaint.