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Case Status:    SETTLED  
—On or around 11/04/2014 (Date of order of final judgment)
Current/Last Presiding Judge:  
Hon. Harold Baer

Filing Date: June 02, 2008

The Royal Bank of Scotland Group PLC (“RBS” or the “Company”) provides retail and commercial banking services in Scotland. RBS is a holding company of several subsidiaries.

This lawsuit, originally filed on May 15, 2008 in the New York Supreme Court was removed to the federal district court on June 2, 2008. The class action charges violations of the 1933 Act.

As summarized in Kevin LaCroix’s D&O Diary blog, three trusts were issuers of mortgage pass-through certificates created by RBS’s subsidiaries, Greenwich Capital, and collateralized with loans underwritten by Countrywide Home Loan. The Complaint alleges that the Registration Statement issued in connection with the offerings failed to disclose “the true impaired and defective quality of the loans collateralizing the Bonds” and that the “loans were not originated pursuant to the underwriting guidelines stated in the Registration Statement.”

The Complaint also alleges that the rating agency Defendants “failed to conduct due diligence and willingly assigned the highest ratings to such impaired instruments since they received substantial fees from the issuer.” The Complaint alleges further that the rating agencies “issued the ratings based on an outdated methodology designed in about 2002.” The ratings were alleged to be misleading because the rating agencies “presumed that the loans were of high credit quality issues in compliance with the stated underwriting guidelines, when, in fact, Countrywide had systematically disregarded its stated Underwriting Guidelines.”

Mr. LaCroix notes in his blog, “As far as I am aware, the plaintiffs’ complaint in the HarborView Mortgage Loan Trust lawsuit represents the first occasion as part of the current subprime litigation wave where subprime investors have sought to hold the rating agencies liable for their ratings.”

On December 03, 2008, an Appellate Order was granted allowing the Plaintiff to petition for leave to appeal and Plaintiffs' motion to remand.

On October 2, 2008, an Order was granted allowing Plaintiff leave to petition the order denying motion to remand.

On September 24, 2008, an Opinion and Order was entered by the court denying the Plaintiffs' motion to remand.

On May 19, 2009, a Consolidated First Amended Securities Class Action Complaint and a Stipulation and Proposed Order Regarding Briefing Schedule was filed with the court.

On March 26, 2010, in an opinion and order set forth the Plaintiffs' causes of action against the Ratings Agency Defendants were dismissed. Plaintiffs' claims against the RBS Defendants with regard to the offerings they did not purchase were dismissed for lack of standing. Plaintiffs' claims related to allegations of conflicts of interest between the RBS Defendants and the rating agencies, as well as claims related to allegations of outdated rating models and inadequate credit enhancements, were dismissed for failure to state a claim. Plaintiffs' claims related to the disregard of underwriting guidelines may proceed.

On January 3, 2011, the Plaintiffs filed a second amended consolidated Complaint.

January 18, 2011, the Court issued an order denying one Plaintiff's class certification.

On April 28, 2011, the Court issued an order and opinion granting in part and denying in part the motion to dismiss.

On April 29, 2011, the Court issued an order granting the Plaintiff's motion for leave to file an appeal of the motion to dismiss. On May 12, 2011, the Court granted a stay of proceedings pending the appeal.

The Court filed an Amended order and opinion on May 19, 2011, granting in part and denying in part the motion to dismiss.

On October 15, 2012, the Plaintiffs' amended motion for class certification was granted by the Court.

On January 3, 2013, the Court denied the Defendants' motion to dismiss, RALI Defendants' motion to stay, and Plaintiffs' motion to reconsider. However, the Plaintiffs' application for a modification of class definition in both cases were granted.

On April 30, 2013, the Court granted the Harborview Plaintiffs' motion for reconsideration, while granting in part and denying in part the RALI Plaintiffs' motion for reconsideration.

On June 25, 2013, New Jersey Carpenters Vacation Fund filed a motion to certify class to encompass additional offerings and designate additional class representatives.

On April 17, 2014, the parties entered into a Settlement Agreement. This Settlement was preliminarily approved by the Court on July 18. The Court entered a Final Judgment on November 4. The was followed the next day by an Order awarding attorneys' fees and expenses.

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