According to the complaint, the Registration Statements and Prospectus Supplements contained materially false and misleading statements and omitted material information in violation of Sections 11, 12(a)(2) and 15 of the Securities Act. Specifically, the claims in this case stem from the activities of Defendant Countrywide Financial Corporation (“CFC”), and its wholly owned subsidiary, Defendant Countrywide Home Loans, Inc. (“CHL”) (collectively “Countrywide” Countrywide is the nation’s largest residential mortgage lender. In 2005 and 2006 alone, Countrywide originated in excess of $850 billion in home loans throughout the United States.
Many of the loans Countrywide originated in 2005, 2006 and 2007 were pooled together by Countrywide and deposited into qualifying special-purpose entities, referred to herein as the “Issuing Trusts,” which were created by Defendants CWALT, CWABS, CWMBS and CWHEQ, wholly-owned subsidiaries of Countrywide. These pools of mortgages were then securitized into mortgage-backed securities (“MBS”) and sold by the Issuing Trusts (defined herein) and the Underwriter Defendants (defined herein) to plaintiffs in the form of the Certificates. The Certificates entitled plaintiffs to receive monthly distributions of interest and principal on cash flows from the mortgages held by the Issuing Trusts. As borrowers paid their mortgages, distributions were made to plaintiffs in accordance with the terms of the Certificates.
As alleged more fully, the Registration Statements and Prospectus Supplements misstated and omitted material information regarding, inter alia, the process used to originate and the quality of the mortgages that were pooled in the Issuing Trusts and were used as the financial basis for the Certificates. For example, Countrywide did not follow the underwriting and appraisal standards described in these Registration Statements and the Prospectus Supplements. Indeed, Countrywide issued mortgages to borrowers that did not satisfy the requisite eligibility criteria as described in the Registration Statements and Prospectus Supplements. Likewise, the mortgages held by the Issuing Trusts and underlying the Certificates were based on collateral appraisals that overstated the value of the underlying properties, thus exposing the Issuing Trusts and plaintiffs to losses in the event of foreclosure.
On May 14, 2010, Judge Mariana R. Pfaelzer granted the motion to appoint the Iowa Public Employees' Retirement System as lead plaintiff and approves its selection of Cohen Milstein Sellers & Toll PLLC as lead counsel and Glancy Binkow & Goldberg as liaison counsel. On July 13, 2010, the lead plaintiff filed an Amended Consolidated Class Action Complaint.
On August 5, 2010, a Notice of Dismissal of certain Defendants was filed by the Lead Plaintiffs. On August 16, 2010, the defendants filed several motions to dismiss the case.
According to a news article dated November 05, 2010, Bank of America Corporation announced that on November 4, 2010, the U.S. District Court for the Central District of California granted Countrywide Financial Corporation’s (“Countrywide”) motion to dismiss the amended complaint in the putative securities class action entitled Maine State Retirement System v. Countrywide Financial Corporation, et al. (“Maine State”). The complaint was dismissed in its entirety, with leave to amend. ... In its November 4, 2010 order, the federal court ruled that the named plaintiffs in Maine State have standing to sue only over offerings of mortgage-backed securities in which they actually purchased, and that the statute of limitations would be tolled only for offerings in which the named plaintiffs in the Luther state court action, on which the Maine State plaintiffs rely for tolling purposes, had also purchased. The Maine State plaintiffs were given thirty days to file a second amended complaint consistent with the Court’s November 4 order. The Court also said that it will address Countrywide’s other arguments for dismissal not addressed in its November 4 order when it considers any new complaint that is filed.
On December 06, 2010, the Plaintiffs filed a second amended class action complaint against the defendants.
According to the Order signed by Judge Mariana R. Pfaelzer on April 20, 2011, the Court dismisses Count III against Bank of America and NB Holdings. The dismissal is with prejudice. As no further claims are alleged against them, Bank of America and NB Holdings are dismissed from the lawsuit entirely.
According the Order Resolving Pending Motions to Dismiss by Judge Mariana R. Pfaelzer, because Plaintiffs must establish they have tranche-based standing as to the securities involved here, the Court dismisses the SAC as to all Certificates that at least one named plaintiff did not purchase. The Court dismisses Count Two against CWALT, CWMBS, CWABS and CWHEQ because the Issuer Defendants are not statutory sellers. In addition, the Court will not allow Plaintiffs to bring a Section 12(a)(2) claim regarding purchase of securities that Plaintiffs did not purchase pursuant to the prospectus supplement in the initial public offering. To the extent Plaintiffs seek to include such securities, those particular securities are dismissed from Count Two. The Court grants Defendant Sieracki's motion to strike because Plaintiffs have not reasonably investigated the allegations they copied from complaints in other cases. The Court denies the Defendants' motions to dismiss on all other grounds. The Court grants Plaintiffs leave to file a Third Amended Complaint no later than 30 days from the date of this Order. Plaintiffs must file their motion for certification that the action is maintainable as a class action by the same date.
The plaintiffs filed a motion to certify the class and a Third Amended Class Action Complaint on June 6, 2011.
On July 15, 2011, the Court issued an order approving the joint stipulation to voluntarily dismiss defendant Morgan Stanley with prejudice.
On September 2, 2011, the plaintiffs filed an amended motion to certify the class.
The motion to dismiss the Third Amended Class Action Complaint was denied on September 13, 2011.
According to the minutes dated October 12, 2011, this action is certified as a class action on behalf of the following class: All persons or entities who, at any time prior to January 14, 2010, purchased MBS in any of the tranches listed below pursuant and/or traceable to Registration Statements, Original Basic Prospectuses, and Prospectus Supplements filed with the Securities and Exchange Commission by Defendants CWALT, Inc.; CWABS, Inc.; CWMBS, Inc.; and CWHEQ, Inc. and who were damaged thereby. The class will be composed of eight subclasses, one for each of the tranches set forth below. Plaintiff shall prepare and file a formal order for signature by the Court. The hearing set for October 17, 2011 at 11:00 a.m. is hereby vacated.
On June 25, 2013, the parties filed a Stipulation of Settlement.
On December 5, 2013, the Court issued an Order granting final approval of the Settlement and also awarded attorneys' fees and expenses.