Lowenstein Sandler’s Capital Markets Litigation team recently defeated a fund administrator’s renewed motion to dismiss on jurisdictional grounds, a second key victory in an action for common law fraud, securities fraud, and Racketeer Influenced and Corrupt Organizations Act violations, among other claims. The plaintiffs, investors in a tax lien fund, seek to recoup millions of

Prosecutors are nearing the end of their case after over three weeks of trial for Privinvest Group executive Jean Boustani, who is accused of conspiring to defraud investors in loans made by Credit Suisse and Russian bank VTB to Mozambican state-backed special-purpose vehicles (SPVs).

The government alleges that Boustani structured the deals so that the

In the latest development in one of two federal cases examining whether New York usury laws can limit the interest rates charged on credit card debts that are securitized, the Capital One affiliate defendants have moved to dismiss the action brought by plaintiff credit card holders. The plaintiffs alleged that their interest rates, ranging from

As cross-border business continues to grow, litigation too is increasingly crossing borders. In a recent decision addressing several issues of first impression, the U.S. Court of Appeals for the Second Circuit opted to aid international litigants, interpreting Section 1782 of Chapter 28 of the United States Code to allow discovery in aid of foreign proceedings

Consumer lending as we know it today – and credit card lending in particular – depend on securitization for significant access to capital. However, the ability of banks to bundle and sell credit card debt-backed securities may be thrown into disarray depending on the outcomes of a pair of pending cases: Cohen v. Capital One

In a case pending in federal court in New York, Kirschner v. JPMorgan Chase Bank, N.A., No. 17-cv-06334-PGG (S.D.N.Y.), a bankruptcy trustee may upend what has long been accepted wisdom on Wall Street: securities laws apply to stocks, bonds, equity options, and the like – but not to syndicated loans.

Kirschner is brought by the

Last week, Governor Cuomo signed into law a bill to amend the New York Civil Practice Law and Rules (“CPLR”) to extend the statute of limitations to six years for financial fraud claims brought under the Martin Act.  One of the strongest blue sky laws in the country, New York’s Martin Act gives wide latitude to the state’s Attorney General to investigate and prosecute financial fraud, both criminally and civilly.  The statute is a particularly useful weapon in the state’s arsenal, as it does not require the Attorney General to prove scienter, or fraudulent intent, in order to prevail.

Continue Reading New York Legislature Extends Statute of Limitations for Martin Act Claims

In the past few years, institutional investors and others seeking to enforce their rights in court have been hit with several negative legal decisions concerning statutes of limitation issues. In 2015, the New York Court of Appeals held in ACE Securities that a claim for breaches of representations and warranties in an RMBS contract accrues when the representations are made, not when a sponsor refuses to cure or repurchase the breaching mortgage loans, rendering certain contractual put-back claims in connection with early-vintage RMBS time-barred under New York’s six-year statute of limitations. Then, last year, the Supreme Court ruled in CalPERS v. ANZ Securities, Inc. that the filing of a securities class action did not toll the three-year statute of repose (the law’s absolute bar to bringing suit) set forth in the Securities Act with respect to direct claims brought by investors “opting-out” of the related class.

Continue Reading Supreme Court Gives Some Defrauded Investors More Time To Seek Recovery

Last week, U.S. District Judge Katherine B. Forrest of the Southern District of New York reinstated a failure-to-notify claim brought by plaintiff Deutsche Bank National Trust Company (the trustee) against defendant Morgan Stanley Mortgage Capital Holdings LLC (“Morgan Stanley”). This notification claim is distinct from the trustee’s claim for breach of contract—based on Morgan Stanley’s alleged breaches of the agreements governing the residential mortgage-backed security (“RMBS”) transaction—and concerns Morgan Stanley’s failure to inform the trustee about alleged misrepresentations made by Morgan Stanley about the mortgage loans which served as the underlying collateral for the securities issued by the Morgan Stanley Structured Trust I 2007-1 (“the trust”).

Continue Reading Federal Court Reinstates Trustee’s Failure to Notify Claim in $306 Million RMBS Suit

On Wednesday, April 12, Justice Ramos of the Commercial Division of the New York Supreme Court dismissed with prejudice four lawsuits filed by Royal Park Investments SA/NV (“Royal Park”).  The lawsuits alleged fraud and negligent misrepresentation with respect to residential mortgage-backed securities (“RMBS”) sold to Fortis NV/SA (“Fortis”) – formerly an independent Belgian bank that was sold off to BNP Paribas during the financial crisis – between 2005 and 2007.  The claims sought damages totaling $3.7 billion from four of the world’s largest banks: Morgan Stanley, Credit Suisse, Deutsche Bank, and UBS.

Continue Reading RMBS Cases Seeking $3.7 Billion Dismissed for Lack of Standing