Fried Frank secured a significant victory on behalf of our clients, Goldman, Sachs & Co., UBS Securities, LLC and Citigroup Global Markets, Inc. when we defeated class certification in a securities class action involving the issuance of approximately US$9b of residential mortgage-backed securities ("RMBS"). This decision was the first one addressing class certification in the context of RMBS, and it is being widely heralded throughout the investment banking community and the defense bar for its importance in defending against these types of actions. In the decision, Judge Harold Baer of the SDNY adopted our arguments that, in light of the unique issues that were raised, investor lawsuits against underwriters and originators of securitizations cannot proceed as a class action because, unlike a typical class action, the investors in the putative class were sophisticated entities, who had different levels of knowledge about the RMBS investments they were making, were capable of fending for themselves and ultimately had competing interests. Accordingly, individual issues ultimately predominated, and a class action was not superior.
Working on the matter are litigation partners Stephanie J. Goldstein (NY), William G. McGuinness (NY) and Shahzeb Lari (NY).