According to the complaint originally filed on March 19, 2008, in the Supreme Court of the State of New York, this is a securities class action on behalf of all persons or entities who acquired the Mortgage Pass-Through Certificates and Asset-Backed Pass-Through Certificates (collectively, the "Certificates") of Citigroup Mortgage Loan Trust Inc. ("Citigroup Mortgage" or the "Depositor") pursuant and/or traceable to the false and misleading Registration Statement and Prospectus Supplements issued during 2007 (collectively, the "Registration Statement"). This action involves solely strict liability and negligence claims brought pursuant to the Securities Act of 1933 ("1933 Act").
Citigroup Mortgage is a Delaware corporation formed for the purpose of acquiring, owning and transferring mortgage loan assets and selling interests in them. Citigroup Mortgage is an affiliate of Citigroup Global Markets Inc. ("Citigroup Global"). The issuers ofthe various offerings(the "Defendant Issuers") are the Trusts identified in 1112, established by Citigroup Mortgage to issue billions of dollars worth of Certificates in 2007.
On December 12, 2006, Citigroup Mortgage and the Defendant Issuers caused a Registration Statement to be filed with the Securities and Exchange Commission ("SEC") in connection with and for the purpose of issuing billions of dollars of Certificates. The Certificates were issued pursuant to Prospectus Supplements, each of which was incorporated into the Registration Statement. The Certificates were supported by pools of mortgage loans. The Registration Statement represented that the mortgage pools would primarily consist of loans generally secured by liens on residential properties, including conventional and adjustable-rate mortgage loans.
Investors purchased the Certificates based upon three primary factors: return (in the form of interest payments), timing of principal and interest payments, and safety (risk ofdefault of the underlying mortgage loan assets). The Registration Statement included false statements and/or omissions about: (i) the underwriting standards purportedly used in connection with the origination of the underlying mortgage loans; (ii) the maximum loan-to-value ratios used to qualify borrowers; (iii) the appraisals of properties underlying the mortgage loans; and (iv) the debt-to-income ratios permitted on the loans.
As a result, the Certificates sold to plaintiff and the Class were secured by assets that had a much greater risk profile than represented in the Registration Statement. In this way, defendants were able to obtain superior ratings on the tranches or classes of Certificates, when in fact these tranches or classes were not equivalent to other investments with the same credit ratings.
By the Fall of 2007, the truth about the performance of the mortgage loans that secured the Certificates began to be revealed to the public, increasing the risk of the Certificates receiving less absolute cash flow in the future and the likelihood that investors would not receive it on a timely basis. The credit rating agencies also began to put negative watch labels on the Certificate tranches or classes, ultimately downgrading many, As an additional result, the Certificates are no longer marketable at prices anywhere near the price paid by plaintiff and the Class and the holders of the Certificates are exposed to much more risk with respect to both the timing and absolute cash flow to be received than the Registration Statement/Prospectus Supplements represented.
On April 7, 2008, the case was transferred from the Supreme Court of the State of New York to the U.S. District Court for the Eastern District of New York.
On March 26, 2009, Judge Leonard D. Wexler granted the motion to appoint the City of Ann Arbor Employees' Retirement System and the Greater Kansas City Laborers Pension Fund as lead plaintiff and approved the selection of Coughin Stoia Geller Rudman & Robbins LLP as lead counsel. On April 6, 2009, an Amended Complaint was filed with the court. On October 30, 2009, the defendants filed a motion to dismiss.
On April 06, 2010, the Court issued a Memorandum and Order granting in part and denying in part the Defendants Motion to Dismiss
On May 24, 2010, a Second Amended Complaint For Violation Of §§11, 12 And 15 Of The Securities Act Of 1933 was filed against the Defendants.
On December 12, 2010, the Court issued an Order and Memorandum denying the defendant's motion to dismiss the Second Amended Complaint.
On August 28, 2012, the Court issued an Order Preliminarily Approving Settlement and Providing for Notice.
On December 5, 2012, the Court issued an Order Approving Plan of Allocation of Settlement Proceeds. In addition, the Court also issued an Order awarding attorneys' fees and expenses. Finally, the Court entered a Final Order and Judgment.