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Hsh v Barclays Consolidated Complaint

Hsh v Barclays Consolidated Complaint

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Published by divinaw
An investor complaint against a securitized trust.
An investor complaint against a securitized trust.

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Published by: divinaw on Sep 16, 2012
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03/13/2014

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 SUPREME COURT OF THE STATE OF NEW YORKCOUNTY OF NEW YORKHSH NORDBANK AG; HSH NORDBANK AG,LUXEMBOURG BRANCH; POSEIDONFUNDING LTD.; HSH NORDBANKSECURITIES S.A., and CARRERA CAPITALFINANCE LIMITED,Plaintiffs,-against-BARCLAYS BANK PLC; BARCLAYSCAPITAL INC.; SUTTON FUNDING LLC andSECURITIZED ASSET BACKEDRECEIVABLES LLC,Defendants.Index No. 652678/2011
CONSOLIDATED COMPLAINT
FILED: NEW YORK COUNTY CLERK 04/02/2012
INDEX NO. 652678/2011NYSCEF DOC. NO. 12RECEIVED NYSCEF: 04/02/2012
 
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TABLE OF CONTENTS
SUMMARY OF THE ACTION.....................................................................................................1PARTIES........................................................................................................................................5Plaintiffs..............................................................................................................................5Defendants..........................................................................................................................6JURISDICTION AND VENUE.....................................................................................................7FACTUAL ALLEGATIONS.........................................................................................................7I. THE SECURITIZATIONS.................................................................................................7A. The Securitizations At Issue...................................................................................7B. The Securitization Process......................................................................................8II. DEFENDANTS’ PARTICIPATION IN THE SECURITIZATIONS..............................10A. Defendant Barclays Bank’s Role in the Securitizations.......................................11B. Defendant Barclays Capital’s Role in the Securitizations....................................12C. Defendant SABR’s Role in the Securitizations....................................................12D. Defendant Sutton Funding’s Role in the Securitizations......................................12III. THE ISSUER DEFENDANTS MADE FRAUDULENT, FALSE ANDMISLEADING STATEMENTS AND OMISSIONS REGARDINGASSIGNMENT OF THE MORTGAGES AND NOTES................................................13A. Statements Regarding Assignments of Mortgages and Notes to the Trusts.........13B. Failure to Assign Mortgages and Notes Into The Trusts......................................15C. Material Undisclosed Risks to Investors Resulting from the Failure toAssign the Mortgages and Notes to the Trusts.....................................................191. Foreclosure and Contractual Remedy Consequences...............................192. Tax Consequences....................................................................................20IV. PLAINTIFFS AND THE UNDERWRITER DEFENDANT OPERATEDUNDER A MUTUAL MISTAKE WITH RESPECT TO THE ASSIGNMENTOF THE MORTGAGES AND NOTES INTO THE TRUSTS........................................22
 
- ii -V. THE ISSUER DEFENDANTS’ FRAUDULENT, FALSE AND MISLEADINGSTATEMENTS AND OMISSIONS REGARDING LOAN QUALITY.........................23A. False and Misleading Statements Regarding Occupancy Status..........................231. Statements Regarding Occupancy Status of Borrower.............................232. Owner-Occupancy Data Was Materially False.........................................24B. False and Misleading Statements Regarding Combined Loan-to-ValueRatios....................................................................................................................261. Statements Regarding Combined Loan-to-Value Ratios..........................262. Combined Loan-to-Value Ratio Data Was Materially False....................27C. The Issuer Defendants Knew that the Representations in the ProspectusWere False Based on their Due Diligence............................................................30VI. THE ISSUER DEFENDANTS’ FRAUDULENT, FALSE AND MISLEADINGREPRESENTATIONS THAT THE LOANS IN THE POOL COMPLIED WITHTHE UNDERWRITING GUIDELINES OF THE ORIGINATORS...............................32(a) New Century.........................................................................................................34(b) Fremont.................................................................................................................35VII. THE ISSUER DEFENDANTS FAILED TO DISCLOSE THAT THEYOBTAINED THE RATINGS OF THE CERTIFICATES THROUGH FALSEREPRESENTATIONS TO THE RATINGS AGENCIES...............................................36VIII. PLAINTIFFS RELIED ON DEFENDANTS’ MISREPRESENTATIONS INTHEIR DECISIONS TO PURCHASE THE CERTIFICATES.......................................38IX. PLAINTIFFS SUFFERED SIGNIFICANT LOSSES DUE TO DEFENDANTS’MISCONDUCT................................................................................................................40FIRST CAUSE OF ACTIONCommon Law Fraud (Against Barclays Bank, Sutton Funding and SABR)................................41SECOND CAUSE OF ACTIONFraudulent Concealment (Against Barclays Bank, Sutton Funding and SABR)..........................42THIRD CAUSE OF ACTIONRescission Based Upon Mutual Mistake (Against Barclays Capital )..........................................43PRAYER FOR RELIEF...............................................................................................................44

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