Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Download
Standard view
Full view
of .
Look up keyword
Like this
2Activity
0 of .
Results for:
No results containing your search query
P. 1
FDIC vs JPM Et Al_Complaint-2517

FDIC vs JPM Et Al_Complaint-2517

Ratings: (0)|Views: 4 |Likes:
Published by TA Webster

More info:

Published by: TA Webster on Sep 11, 2012
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PDF, TXT or read online from Scribd
See more
See less

04/20/2014

pdf

text

original

 
 
PLAINTIFF’S ORIGINAL PETITION
Page 1
CAUSE NO. ________ FEDERAL DEPOSIT INSURANCECORPORATION AS RECEIVER FOR GUARANTY BANK,§§§§IN THE DISTRICT COURT OF§§Plaintiff, §§v. § JUDICIAL DISTRICT§§J.P. MORGAN SECURITIES LLC;MERRILL LYNCH, PIERCE, FENNER &SMITH INC.; RBS SECURITIES INC.;WAMU ASSET ACCEPTANCE CORP.; andWAMU CAPITAL CORP.;§§§§§§§§§§§Defendants. § TRAVIS COUNTY, TEXAS
PLAINTIFF'S ORIGINAL PETITION FOR DAMAGESTO THE HONORABLE JUDGES OF SAID COURT:
Comes now Plaintiff, Federal Deposit Insurance Corporation as Receiver for GuarantyBank, and files this Petition against J.P. Morgan Securities LLC (formerly known as Bear,Stearns & Co. Inc. and referred to in this Petition as
Bear Stearns
); Merrill Lynch, Pierce,Fenner & Smith Inc. (successor by merger to Banc of America Securities LLC, which is referredto in this Petition as
Banc of America
); RBS Securities Inc. (formerly known as GreenwichCapital Markets, Inc. and doing business as RBS Greenwich Capital, and referred to in thisPetition as
RBS
); WaMu Asset Acceptance Corp. (
WaMu Acceptance
); and WaMu CapitalCorp. (
WaMu Capital
), and as grounds therefor shows as follows:
Filed12 August 17 P3:28Amalia Rodriguez-MendozaDistrict ClerkTravis DistrictD-1-GN-12-002517
 
 
PLAINTIFF’S ORIGINAL PETITION
Page 2
I.
 
DISCOVERY CONTROL PLAN
1.
 
Plaintiff intends that discovery be conducted under Level 3 of Rule 190.4 of theTexas Rules of Civil Procedure.
II.
 
NATURE OF THIS ACTION
2.
 
This is an action for damages caused by violation of the Texas Securities Act(
TSA
)
 
and the
 
Securities Act of 1933 (
1933 Act
) by the defendants. As alleged in detail below,defendants issued, underwrote, or sold 20
securities known as “certificates,” which were backed
 by collateral pools of residential mortgage loans in 18 securitizations. Guaranty Bank (
Guaranty
) paid approximately $2.1 billion for the 20 certificates. When they issued,underwrote, or sold the certificates, the defendants made numerous statements of material factabout the certificates and, in particular, about the credit quality of the mortgage loans that backedthem. Many of those statements were untrue. Moreover, the defendants omitted to state manymaterial facts that were necessary in order to make their statements not misleading. For example,the defendants made untrue statements or omitted important information about such materialfacts as the loan-to-value ratios of the mortgage loans, the extent to which appraisals of the properties that secured the loans were performed in compliance with professional appraisalstandards, the number of borrowers who did not live in the houses that secured their loans (thatis, the number of properties that were not primary residences), and the extent to which theentities that made the loans disregarded their own standards in doing so.3.
 
Based on an analysis of a random sample of the loans that backed the certificatesthat Guaranty purchased, the defendants made such untrue or misleading statements about atleast the following numbers of loans.
 
 
PLAINTIFF’S ORIGINAL PETITION
Page 3
Securitization No.
1
  Number of Loans aboutWhich Defendants MadeMaterial Untrue or Misleading Statements
2
  Number of Loansthat Backed theCertificatesPercentage of Loans aboutWhich Defendants MadeMaterial Untrue or Misleading Statements1 645 973 66.3%2 1,470 1,940 75.8%3 550 714 77.0%4 328 456 71.9%5 871 1,216 71.6%6 1,961 2,742 71.5%7 1,444 2,591 55.7%8 938 2,073 45.2%9 192 401 47.9%10 210 393 53.4%11 265 757 35.0%12 130 263 49.4%13 162 330 49.1%14 299 578 51.7%15 234 473 49.5%16 410 773 53.0%17 1,425 2,426 58.7%18 354 659 53.7%4.
 
The certificates are “securities” within the meaning of the
TSA and the 1933 Act.5.
 
The defendants are liable under the following provisions of the TSA and the 1933Act:
 As issuer:
WaMu Acceptance is liable as an
“issuer” u
nder Section 11 of the 1933 Act inconnection with issuing nine certificates that Guaranty purchased.
1
Guaranty purchased two certificates in Securitization No. 11 and two certificates inSecuritization No. 16.
2
The method of random sampling that Plaintiff used ensures that conclusions about theentire collateral pool have a margin of error of no more than plus or minus 5% at a confidencelevel of 95% (that is, one can be 95% certain that the true percentage in the collateral pool as awhole is within 5% of the percentage measured in the sample). For example, one can be 95%certain that the number of loans in Securitization No. 1 about which Banc of America, whichsold to Guaranty the certificate in Securitization No. 1, made untrue or misleading statements or omissions is within 5% of 645, that is, between 613 and 677. The same margin of error should beapplied to all information in this Petition and accompanying Schedules that is based on a randomsample of loans in a collateral pool.

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->