On March 18, 2003, the plaintiff filed a motion to dismiss, which was granted in the Order entered on May 29, 2003.

The suit arises in connection with a November 1, 1999 transaction in which the former Paine Webber entities transferred loans to a trust. The suit alleges that the Defendants committed securities fraud by making material misrepresentations and omissions about the quality of the loans Paine Webber transferred to the trust. Specifically, the suit notes that compared to all loans in the Loan Pool, the Paine Webber loans have disproportionately gone into default or required special attention, and have later been found not to meet the standards represented in the prospectus and prospectus supplement.

The complaint asserts claims based on violations of the Exchange Act section 10(b) (15 U.S.C. section 78j) and Rule 10b-5 (17 C.F.R. section 240.10b-5); violation of the Exchange Act section 20(a) (15 U.S.C. section 78t); violation of the Securities Act section 11 (15 U.S.C. section 77k); violation of the Securities Act section 12(a)(2) (15 U.S.C. section 77l); and violation of the Securities Act section 15 (15 U.S.C. section 77o). It seeks as relief rescission of the plaintiff class' investment in the Certificates, or in the alternative, actual damages at least in the amount of $549,923,000.

The class is constitute by all who purchased or otherwise acquired shares of Merrill Lynch Mortgage Investors, Inc. Mortgage Pass-Through Certificates Series 1999-C1 and received a Prospectus dated October 15, 1999 and a Prospectus Supplement to Prospectus dated October 15, 1999. The Class Period begins with the initial offering of the Certificates and continues through September 3, 2002.