According to the complaint filed on June 3, 2010, instead of being conservative "investment grade" products as defendants represented in the Offering Documents, the Certificates were extremely risky investments that should have actually been rated as "junk."
By mid-2008, the truth about the performance of the mortgage loans that secured the Certificates began to be revealed to the public. Information was released indicating that the Certificates were much riskier than originally represented and that holders would likely receive less absolute cash flow in the future and receive it, if at all, on a untimely basis.
As an additional result, the Certificates are no longer marketable in the secondary market at prices anywhere near the prices paid by plaintiff and the Class, and the holders of the Certificates are exposed to much more risk than the Offering Documents represented with respect to both the timing and absolute cash flow to be received.
On January 19, 2011, the defendants filed a motion to dismiss the complaint.
According to the Memorandum and Order dated September 13, 2011, since it is impossible to tell from the face of the complaint how PFRS calculated its "loss," the motion to dismiss is granted with leave to PFRS to file an amended complaint by no later than October 20, 2011, setting out with specificity how it calculates its alleged loss of $165,877.05. The Clerk of the Court is directed to close the motion. Granting 11 Motion to Dismiss.
The plaintiff filed an Amended Class Action Complaint on October 20, 2011. The defendants responded by filing a motion to dismiss the Amended Complaint on December 16, 2011.
On May 31, 2012, the Court issued an Order granting the motion to dismiss with leave to plaintiff to file an amended complaint. On July 9, 2012, the Plaintiffs filed their amended complaint.
On March 27, 2014, the Court issued an Opinion denying Defendants' motion to dismiss, except with respect to PFRS’s claim that the offering documents misled investors as to the rating agencies’ opinions, for which the motion is granted.