Court Denies In Part Motion to Dismiss WaMu MBS Litigation

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Sep 30, 2010, 09:54 ET

Ruling underscores Plaintiff's actionable claims with respect to mortgage-backed certificates

WASHINGTON, Sept. 30 /PRNewswire-USNewswire/ -- In the case of Boilermakers National Annuity Trust Fund, et. al. v. WaMu Mortgage Pass Through Certificates, Series AR1, et. al., Judge Marsha J. Pechman, U.S. District Court for the Western District of Washington, has issued an order denying in part, Defendants' motions to dismiss Plaintiffs' Securities Act claims.

The court ruled that the Plaintiffs have alleged actionable claims with respect to seven offerings totaling $10.8 billion in mortgage-backed certificates issued and underwritten by WaMu and its related entities. The certificates were supported by pools of residential mortgage loans. WaMu, formerly Washington Mutual, Inc., was the nation's largest savings and loan association until it became the nation's largest bank failure in September 2008.

"This decision is good news for investors," said Plaintiffs' Co-lead Counsel Steven Toll, partner, Cohen Milstein Sellers & Toll, PLLC. "While we are disappointed that the court dismissed a number of offerings from the case, we are gratified that the court has permitted the prosecution of this case to go forward."

Judge Pechman granted the Defendants' motion to dismiss claims pertaining to 25 certificates. However, the court ruled that the alleged misstatements and omissions relating to the description of the purported loan underwriting guidelines in the Offering Documents gave rise to actionable claims under the Securities Act of 1933 and survived dismissal in each of the seven offerings. Judge Pechman further held that the Defendants failed to show that the purchase and sale agreements shielded Defendants from liability, that economic loss was not sufficiently alleged, or that the Offering Documents contained sufficient risk disclosures.

A copy of the court decision (Case 2:09-cv-00037-MJP) is available online at www.cohenmilstein.com or at http://www.cmht.com/news.php?NewsID=378.

SOURCE Cohen Milstein Sellers & Toll PLLC