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Case Status:    SETTLED
On or around 06/26/2013 (Other)

Filing Date: December 12, 2008

On December 12, 2008, the class action was first filed in the U.S. District Court for the Southern District of New York, Iron Workers Local No. 25 Pension Fund, et al. v. Credit-Based Asset Servicing and Securitization LLC, et al., civil docket number 08-CV-10841, on behalf of purchasers of C-BASS 2007-CB4 Trust Certificates (collectively, the “Certificates”) pursuant and/or traceable to the false and misleading Registration Statement and Prospectus Supplement issued during 2007 (collectively, the “Registration Statement”).

Specifically, the complaint charges Credit-Based Asset Servicing and Securitization LLC (“C-BASS”), Merrill Lynch Mortgage Investors, Inc., certain of its officers and directors, and the issuers and underwriters of the Certificates with violations of the Securities Act of 1933. C-BASS’s principal business is the purchasing of residential mortgage loans, primarily sub-prime in nature, from multiple parties, including banks and other financial institutions, and mortgage-related securities, including non-investment grade subordinated securities, for investment and securitization

The complaint alleges that, on March 3, 2007, C-BASS and the defendant issuers caused the Registration Statement to be filed with the SEC in connection with and for the purpose of issuing hundreds of millions of dollars of Certificates. The Certificates were issued pursuant to a Prospectus Supplement that 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.

The complaint alleges that 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.

According to the complaint, by December 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 Supplement represented.

On February 17, 2009, a class action lawsuit was filed in the United States
District Court for the Southern District of New York, Public Employees' Retirement System of Mississippi, et al. v. Merrill Lynch & Co. Inc., et al., civil docket number 09-CV-01392, on behalf of purchasers of Merrill Lynch Mortgage
Investors, Inc. ("Merrill Lynch") Mortgage Pass-Through Certificates
(collectively, the "Certificates") pursuant and/or traceable to the
false and misleading December 21, 2005 Registration Statement and
Prospectus Supplements or the false and misleading February 2, 2007
Registration Statement and Prospectus Supplements.

The complaint alleges that on December 21, 2005, and February 2,
2007, defendants caused two Registration Statements to be filed with
the SEC in connection with and for the purpose of issuing billions of
dollars of Certificates. The Certificates were issued pursuant to
the Prospectus Supplements, each of which was incorporated into one
of the Registration Statements. The Certificates were supported by
pools of mortgage loans.

According to the complaint, the Offering Documents included false
statements and/or omissions about: (i) the underwriting standards
used by the loan originators; (ii) the standards and guidelines used
by Merrill Lynch when evaluating and acquiring the loans; (iii) the
appraisal standards used to value the properties collateralizing the
loans, and the corresponding loan-to-value ratios of the loans; (iv)
the credit enhancement supporting the loan securitization process;
and (v) the pre-established ratings assigned to each tranche of
Certificates issued pursuant to the offering documents.

Ultimately, 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 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 Certificates, ultimately downgrading
many. As a result, the Certificates are no longer marketable at
prices near the price paid for them, 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 Offering
Documents represented.

The complaint alleges that Merrill Lynch, certain of its officers and
directors and the issuers and underwriters of the Certificates
violated Sections 11, 12 and 15 of the Securities Act of 1933.
Plaintiff seeks to recover damages on behalf of all purchasers of the
Certificates listed above (the "Class").

On April 2, 2009, District Court Judge Jed S. Rakoff consolidated the two cases 08-CV-10841 and 09-CV-1392 under a single docket number, 08-CV-10841. On April 23, 2009, Judge Jed S. Rakoff granted the motion to appoint the Public Employees' Retirement System of Mississippi as lead plaintiff. The Court also appointed Bernstein Litowitz Berger & Grossmann LLP, which is counsel to the Public Employees' Retirement System of Mississippi, as lead counsel in the consolidated matter.

On April 23, 2009, an Order appointing lead plaintiff and lead counsel on the consolidated cases was submitted with the court.

According to an article dated May 28, 2009, in a consolidated class action over subprime mortgage-backed investments offered by Merrill Lynch & Co. Inc., a federal judge has reaffirmed a Mississippi public pension fund as lead plaintiff, citing a retainer agreement between a rival fund and its counsel, Coughlin Stoia Geller Rudman & Robbins LLP. Judge Jed S. Rakoff of the U.S. District Court of the Southern District of New York issued the expanded ruling Tuesday after naming the Public Employees' Retirement System of Mississippi lead plaintiff and its attorneys from Bernstein Litowitz Berger & Grossmann LLP lead counsel in April.

On May 26, 2009, an order was granted by the court that appointed lead counsel, lead plaintiff and consolidated the related cases.

On June 05, 2009, in a Memorandum and Order, the District Judge assigned to this case, consolidated all four of these cases under 08 Civ. 10841, and has referred them to me for general pretrial supervision.

On March 31, 2010, the Court granted in part and denied in part the Defendants’ motion to dismiss the plaintiffs’ complaint. In the order, the claims against defendants McGraw-Hill Companies, Moody's Investors Service, Inc., Credit-Based Asset Servicing and Securitization LLC, Merrill Lynch Mortgage Lending, Inc., and First Franklin Financial Corporation were dismissed with prejudice. The claims against Merrill Lynch & Co., Inc.; J.P. Morgan Securities, Inc.; ABM AMRO Inc.; the section 12(a)(2) and section 15 claims against Merrill Lynch, Pierce, Fenner & Smith Inc.; and the section 15 claims against Matthew Whalen, Paul Park, Brian T. Sullivan, Michael M. McGovern, Donald J. Puglisi, and Donald C. Han were dismissed without prejudice. All other claims survived.

On June 01, 2010, an Opinion and Order specified that all claims against the ratings agencies are dismissed with prejudice; the Section 15 claims against the individual defendants are dismissed without prejudice; and the defendants' motions to dismiss were in all other respects denied.

On July 06, 2010, an Amended Class Action Complaint For Violation Of §§ 11, 12(A)(2) And 15 Of The Securities Act Of 1933 was filed by the lead plaintiffs against the defendants.

On November 08, 2010, an order was issued by the Court stating the claims relating to the offerings made by the Junior Underwriters are involved, were dismissed with prejudice.

According to the June 16, 2011 Order signed by Judge Jed S. Rakoff, after careful consideration, and for reasons that will be stated in a forthcoming written opinion, the Court hereby grants both motions. Plaintiffs' proposed class is hereby certified, and Plaintiffs are appointed as class representatives with Bernstein Litowitz Berger & Grossmann LLP as class counsel. The case will proceed as a class action in accordance with the Court's December 9, 2010 scheduling Order.

On December 14, 2011, the Court issued an Order Preliminarily Approving Settlement and Providing for Notice.

On May 7, 2012, the Court issued an Order Approving Plan of Allocation of Net Settlement Fund.

On May 7, 2012, the Court entered an Order and Final Judgment settling action as to the settling defendants.

On May 7, 2012, the Court issued an Order awarding attorneys' fees and expenses.

On September 11, 2012, the Court issued an Order approving the Lead Plaintiff's plan for distribution of the Net Settlement Fund to Authorized Claimants.

COMPANY INFORMATION:

Sector: Financial
Industry: Consumer Financial Services
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol:
Company Market: Privately Traded
Market Status: Privately Held

About the Company & Securities Data


"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: S.D. New York
DOCKET #: 08-CV-10841
JUDGE: Hon. Barbara S. Jones
DATE FILED: 12/12/2008
CLASS PERIOD START: 04/26/2007
CLASS PERIOD END: 12/12/2008
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Coughlin Stoia Geller Rudman & Robbins LLP (Melville)
    58 South Service Road, Suite 200, Coughlin Stoia Geller Rudman & Robbins LLP (Melville), NY 11747
    631.367.7100 631.367.1173 · info@csgrr.com/
No Document Title Filing Date
COURT: S.D. New York
DOCKET #: 08-CV-10841
JUDGE: Hon. Barbara S. Jones
DATE FILED: 07/06/2010
CLASS PERIOD START:
CLASS PERIOD END:
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Barroway Topaz Kessler Meltzer & Check, LLP (Radnor)
    280 King of Prussia Road, Barroway Topaz Kessler Meltzer & Check, LLP (Radnor), PA 19087
    610.667.7706 610.667.7706 · info@btkmc.com
  2. Berman DeValerio (Boston)
    One Liberty Square, Berman DeValerio (Boston), MA 02109
    617.542.8300 617.542.8300 ·
  3. Bernstein Litowitz Berger & Grossmann LLP (San Diego)
    12481 High Bluff Drive, Suite 300, Bernstein Litowitz Berger & Grossmann LLP (San Diego), CA 92130
    858.793.0070 858.793.0323 · blbg@blbglaw.com
  4. Pond Gadow & Tyler
    502 South President Street , Pond Gadow & Tyler, MS 39201
    601.948.4878 601.948.4878 ·
  5. Robbins Geller Rudman & Dowd LLP (Melville)
    58 South Service Road, Suite 200, Robbins Geller Rudman & Dowd LLP (Melville), NY 11747
    631.367.7100 631.367.1173 ·
No Document Title Filing Date
No Document Title Filing Date