This action was originally filed on November 19, 2008 in the Supreme Court of the State of New York. On December 8, 2008, the action was removed to the U.S. District Court for the Southern District of New York.
According to the original complaint, this is a class action alleging violations of Sections 11 and 12 of the Securities Act of 1933, 15 U.S.C. § 77a et seq. ("Securities Act"), on behalf of purchasers of $603,163,942 of Senior Mortgage Pass-Through Certificates, Series 2006-H (the "Senior Certificates") issued on or about June 28, 2006 by the Residential Asset Securitization Trust 2006-A8 ("RAST" or the ''Trust'' or the "Issuing Entity'') (the issuance of the Certificates by RAST shall sometimes be referred to as the "Offering'').
The Senior Certificates were issued and sold pursuant to a Registration Statement filed with the SEC in a Form 8-3 (File No. 333-132042) on February 24,2006 (amended March 29 and April 13, 2006), and a Prospectus Supplement dated June 28, 2006, which supplemented a Base Prospectus dated June 14, 2006 (the Registration Statement. Base Prospectus and Prospectus Supplement are, unless otherwise indicated, collectively referred to as the "Prospectus," with all citations to the Prospectus Supplement).
Following the issuance of the Senior Certificates, disclosures began to emerge revealing that during the time period in which the Mortgage Loans were originated, IndyMac routinely disregarded its underwriting guidelines in an effort to boost its loan production. These disclosures were confirmed by substantially higher rates of delinquencies and foreclosures on mortgage loans underwritten by IndyMac, including the Mortgage Loans securitized in the Offering. As of October 27, 2008, the Mortgage Loans had a 19.4% rate of delinquency, default or foreclosure.
These disclosures, and the poor performance of the Mortgage Loans, caused the Rating Agencies to recognize that they had not rated the Senior Certificates consistent with the true risks of these instruments at the time of the Offering. Therefore, the Rating Agencies re-evaluated the Senior Certificates applying ''new'' and "updated" "methodologies" that properly accounted for IndyMac's actual lax underwriting. As a result, both Moody's and S&P downgraded the Senior Certificates.
9. During sworn Congressional testimony provided on October 23, 2008, Sean Egan,
the Managing Director of Egan-Jones Ratings, stated that losses on investments such as the Senior Certificates were the product of a securitization process in which "everybody involved ... had an incentive for…letting things go by [and ignoring risks] ... - from the mortgage broker, the mortgage banker, the investment bank, the issuer or the paid rating firm," because “[t]hey all g[o]t paid if the [securitization] deal[s] happen[ed], and they d[id]n't get paid if the [securitization] deal[s] d[id]n't happen," Congressional Hearing Unofficial Transcript (LEXIS, printed as of October 23,
2008) ("Hrg. Tr.") at 13.
The above revelations shed light on the true quality and risk of the Mortgage Loans and caused the value of the Senior Certificates to substantially collapse. Plaintiff purchased his Senior Certificates at par for $1,000 per Certificate at the time of the Offering. but now, at the commencement of the action herein, they are valued at $60.84 per $100 of par value - a 39% decline in value on a once "triple-A" rated bond.
On March 16, 2009, District Court Judge Lewis A. Kaplan signed the Order granting Vasili Tsereteli's Motion for Appointment as Lead Plaintiff and for Approval of Lead Plaintiff's Choice of Counsel. Class member Vasili Tsereteli is hereby appointed to serve as Lead Plaintiff and Lead Plaintiff's choice of counsel, the law firm of Wolf Popper LLP, is hereby appointed to serve as Lead Counsel for the Class. On April 20, 2009, the lead plaintiff filed an Amended Complaint. On May 5, 2009, Judge Kaplan granted the motion to substitute Vaszurele Ltd. as lead plaintiff in place of Vasili Tsereteli.
On February 5, 2010, Judge Lewis A. Kaplan granted the motions to dismiss Defendants The McGraw-Hill Companies, Inc. and Moody's Investors Service, Inc., only. On February 9, 2010, the plaintiff filed a notice of voluntary dismissal without prejudice against the defendant(s) Residential Asset Securitization Trust 2006-A8. The Clerk’s Judgment was entered on February 17, 2010, granting the motion to dismiss by McGraw and Moody. On March 15, 2010, the plaintiff filed a Notice of Appeal as to the Clerk's Judgment dismissing McGraw and Moody.
On March 11, 2010, the Memorandum Opinion #98657 granted the defendant Credit Suisse's motion to dismiss the amended complaint in its entirety except that it is denied with respect to those claims asserted by Vaszurele based on IndyMac Banks alleged abandonment of its underwriting standards. The plaintiffs filed a motion for reconsideration of the Opinion, which was denied by Judge Kaplan on March 26, 2010. The plaintiff's filed a notice of appeal. According to the Mandate entered on June 1, 2011, the judgment of the District Court is affirmed.
On December 10, 2010, the plaintiff filed a motion to certify the class. The motion is currently pending before the Court.
On June 29, 2012, the Court issued an Order granting the lead plaintiff's motion to certify the class.
On November 26, 2012, the United States Court of Appeals for the Second Circuit entered an Order granting the petition for leave to appeal the District Court's order granting respondent's motion for class certification.
On September 25, 2013, the Lead Plaintiff entered into a Stipulation of Settlement with Underwriter Defendant. On January 27, 2014, the Court granted final approval of the Settlement and ordered this case dismissed with prejudice. The Court also awarded attorneys' fees and expenses.