Friday, September 07, 2012

Standing in securities

NECA-IBEW Health & Welfare Fund v. Goldman Sachs & Co., No. 11-2762-cv 9 (2d Cir. Sept. 6, 2012)

The district court dismissed, for lack of standing, a putative securities class action on behalf of all persons who acquired certain mortgage-backed certificates issued under the same allegedly false and misleading registration statement, but sold in 17 separate offerings by 17 unique prospectus supplements.  The court of appeals reversed: the plaintiff had class standing to assert the claims of purchasers of certificates backed by mortgages originated by the same lenders that originated the mortgages backing plaintiff’s certificates, because such claims implicate “the same set of concerns” as plaintiff’s claims.  As my informant points out, this is a weird line for MBS (given the variety of lenders that could be involved), but perhaps less significant for false advertising plaintiffs.

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