A federal court has approved a $340 million settlement with six underwriters of IndyMac mortgage-backed securities (MBS) accused of misleading investors in offering documents. Berman DeValerio represented the Wyoming State Treasurer’s Office and the Wyoming Retirement System as lead plaintiffs in the case, in which investors achieved one of the largest federal class-action recoveries involving MBS purchases.
Final approval came February 23 from the Hon. Lewis A. Kaplan, of the U.S. District Court for the Southern District of New York. Judge Kaplan found that the settlement was “in all respects, fair, reasonable and adequate,” and in the best interests of the class members.
The settlement resolves claims that the offering materials for 50 MBS offerings issued by now-defunct IndyMac Bank contained untrue statements because they mischaracterized the underwriting practices used to originate and acquire the underlying loans.
“It has been a long, contentious litigation, but thanks to the leadership of the Wyoming funds and the good work of our team we were able to obtain an excellent result,” said Patrick T. Egan, a partner in Berman DeValerio’s Boston office.
In addition to Mr. Egan, Berman DeValerio attorneys representing the Wyoming funds included Joseph J. Tabacco, Jr., Nicole Lavallee and Jay Eng.
The State Treasurer’s Office and Wyoming Retirement System were court-appointed lead plaintiffs in the class action, which was brought on behalf of purchasers of IndyMac MBS offerings issued in 2006 and 2007. The Office of the Wyoming Attorney General also oversaw the litigation.
The underwriter defendants settling the matter are Credit Suisse Securities (USA) LLC, Deutsche Bank Securities, Inc., J.P. Morgan Securities, Inc. (in its own right and as successor-in-interest to Bear Stearns & Co., Inc.), RBS Securities, Inc., Morgan Stanley & Co., Inc. and UBS Securities LLC.
The newly approved settlement brought the total value of IndyMac MBS settlements to $346 million. A $6 million partial settlement with former officers and directors of IndyMac was approved in December 2012.
The case is In re IndyMac Mortgage-Backed Securities Litigation, Master Docket No. 09 Civ. 04583 (LAK) (S.D.N.Y.).
*In August 2017, our firm name changed to Berman Tabacco. Case references and content published before that date may refer to the firm under our prior name, Berman DeValerio.