Cohen Milstein and Coughlin Stoia Announce Pendency of Class Action Suits Involving Mortgage Pass-Through Certificates of Structured Asset Mortgage Investments II, Inc. and Bear Stearns Asset-Backed Securities I LLC
Posted on September 11, 2009 at 20:31 PM EDT
The law firms of Cohen Milstein Sellers & Toll PLLC (“Cohen Milstein”) and Coughlin Stoia Geller Rudman & Robbins LLP (“Coughlin Stoia”) announced today that two class action lawsuits have been filed on behalf of purchasers of Mortgage Pass-Through Certificates issued by Structured Asset Mortgage Investments II, Inc. (“SAMI”) and/or Bear Stearns Asset-Backed Securities I LLC (“BSABSI”) (the “Certificates”) pursuant and/or traceable to false and misleading Registration Statements and Prospectus Supplements issued between March 2006 and September 2007 (collectively, the “Registration Statements”). The actions are: New Jersey Carpenters Health Fund v. Bear Stearns Mortgage Funding Trust 2006-AR1, et al., Docket No. 08-cv-8093-LTS (S.D.N.Y.) (the “Carpenters Action”) filed on August 20, 2008 and Pension Trust Fund for Operating Engineers v. Structured Asset Mortgage Investments II Inc., et al, Docket No. 09-cv-6172-LTS (S.D.N.Y.) (the “Operating Engineers Action”) filed July 9, 2009 (collectively, the “Actions”). The law firm representing the Plaintiffs in the Carpenters Action is Cohen Milstein; the law firm representing the Plaintiff in the Operating Engineers Action is Coughlin Stoia. The Actions are pending before the Honorable Laura Taylor Swain in the United States District Court in the Southern District of New York.
The Actions allege that the Registration Statements and Prospectuses incorporated therein contained material misstatements and omissions in violation of Sections 11, 12 and 15 of the Securities Act of 1933. The Certificates were supported by large pools of mortgage loans generally secured by first liens on residential properties, including conventional, adjustable rate and negative amortization mortgage loans. According to the complaints filed in the Actions, the Registration Statements included false statements and/or omissions about: (i) the underwriting standards purportedly used in connection with the origination of the underlying mortgage loans; (ii) the maximum loan-to-value ratios used to qualify borrowers; (iii) the appraisals of properties underlying the mortgage loans; and (iv) the debt-to-income ratios permitted on the loans. As a result of these misstatements and omissions, the Certificates were secured by assets that had a much greater risk profile than represented in the Registration Statement, and the Nationally Recognized Statistical Ratings Organizations (the “NRSRO” or “Ratings Agencies”) assigned superior credit ratings to the Certificates as a result of defendants’ failure to disclose the underwriting defects and appraisal manipulations.
However, by late 2008, the amount of uncollectible mortgage loans securing the Certificates began to be revealed to the public and the Rating Agencies began to put negative watch labels on many Certificate classes, ultimately down-grading many. The delinquency and foreclosure rates of the mortgage loans securing the Certificates has grown both faster and in greater quantity than what would be expected for mortgage loans of the types described in the Prospectus Supplements. As a result, the Certificates have declined precipitously in value.
The defendants in the Actions include SAMI, BSABSI, certain of their officers and directors, Bear Stearns Cos., Inc. (“BSC”), J.P. Morgan Chase, Inc. (“JPM”) as successor in interest to BSC, the Underwriter of the Certificates Bear Stearns & Co., Inc., the Issuers of the Certificates and/or the Ratings Agencies who rated the Certificates.
The putative class in the Actions includes purchasers of Certificates issued by the following trusts (the “Issuers”):
If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from today. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, you may contact Plaintiffs’ counsel:
If you are a member of this putative class, you can view a copy of the complaints as filed at http://www.cohenmilstein.com/cases.php?CaseID=208 or http://www.csgrr.com/cases/bearstearnsmortgage/. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
Cohen Milstein has significant experience in prosecuting investor securities class actions. The firm has offices in Washington, D.C., New York, Philadelphia and Chicago, and is active in major litigation pending in federal and state courts throughout the nation. You may visit our website at www.cohenmilstein.com for more information about the firm. The firm's reputation for excellence has been recognized on repeated occasions by courts which have appointed the firm to lead positions in complex multi-district or consolidated litigation.
Coughlin Stoia, a 190-lawyer firm with offices in San Diego, San Francisco, Los Angeles, New York, Boca Raton, Washington, D.C., Philadelphia and Atlanta, is active in major litigations pending in federal and state courts throughout the United States and has taken a leading role in many important actions on behalf of defrauded investors, consumers, and companies, as well as victims of human rights violations. The Coughlin Stoia Web site (http://www.csgrr.com) has more information about the firm.
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