567GOODIN,MACBRIDE,SQUERI,DAY& LAMPREY,LLPROBERTA.GOODIN,StateBarNo.061302rgoodin@goodinmacbride.omFRANCINET. RADFORD,StateBarNo. 168269fradford@ oodinmacbride.omANNEH. HARTMAN,StateBarNo.184556ahartman@gooinmacbri e.om505Sansometreet,uite900SanFrancisco,alifomia 94lllTelephone: (415)392-7900Facsimile:(415)398-4321GRAIS& ELLSWORTHLP

DAVIDJ. GRAIS(prohac applicationsubmittedherewith)KATHRYNC. ELLSWORTHQtrohacapp. submittedherewith)OWEN L.CYRULNIK(prohac applicationsubmittedherewith)

70 East55thStreetNew York, NewYork 10022Telephone:(212)755-0100Facsimile:(212)755-0052Attomeys or PlaintiffFederalHomeLoanBankof SanFrancisco

r: v.vllVll-'rvruuvLt/

FILED

SanFrandiscoountySuperlorCourt

HAR52010

CASEANAGEMENTONFERENCEET

AUG3Z01llgruAM

urrAlilMLNT212

No.cGC.0,Ag7819

COMPLAINT FORRESCISSIONANDDAMAGESFOR:(1)VTOLATTONSOFS$2s40rAND25501OF THECALIFORNIACORPORATESECURITIESACT;(2)VTOLATTONSOF$St AND lsOFTHE SECURITIESACT OF 1933;(3)VIOLATIONSoFSS2(a)(2)ANI)15OFTHESECURITIESACT OF1933;(4)VTOLATTONSOF$$1s72AND 1710OF THE CALIFORNIACIVILCODE(NEGLIGENTMISREPRESENTATION);andIN THESUPERIORCOURTOF THE STATEOF CALIFORNIAIN AND FORTHECITYANDCOLTNTYOF SAN FRANCISCO18T9

FEDERALHOME LOAN BANKOF SANFRANCISCO,Plaintiff.

DEUTSCHE ANKSECURITIESNC.;DEUTSCHE LT-ASECUzuTIES,NC.;DB STRUCTURED RODUCTS,NC.;J.P.MORGANSECUzuTIES,NC.,F/IVABEAR,STEARNS CO. NC.;STRUCTUREDASSETMORTGAGEINVESTMENTSI,INC.;THEBEAR STEARNSCOMPANIES,LC,F/K/ATHE BEAR STEARNSCOMPANIES,INC.;COUNTRYWIDESECURITIESCORPORATION;CREDITSUISSESECURITIESUSA)LLC,F/K/ACREDITSUISSE IRSTBOSTONLLC;RBSSECURITIES,NC.,FIKINGREENWICHCAPITAL MARKETS202l22232425262728

CLERKOFTH

COMPLAINT

)

4567891011I2l3t415t6RBSACCEPTANCE,NC.,F WAGREENWICHCAPITAL ACCEPTANCE.INC.;RBSHOLDINGSUSA,INC.,F/IVAGREENWICHCAPITAL HOLDINGS.INC.;MORGANSTANLEY& CO.INCORPORATED;UBSSECURITIES,LC;MORTGAGEASSETSECURITIZATIONTRANSACTIONS,NC.;MERRILLLYNCH, PIERCE,FENNER&SMITH,INC.;AND,DOES1-50,(s)RESCTSSTONF CONTRACTSUNDER$1689ETSEQ.OF THECALIFORNIACIVL CODE

t718

Defendants.Plaintiff, FEDERALHOMELOAN BANKOFSAN FRANCISCO(refenedto inthiscomplaintas theBank),alleges,basedupon itscontinuing investigation,ncluding thecontinuinginvestigationofitscounsel, hat the followingallegationsand other factualcontentionshaveevidentiary supportor, where specificallyidentifiedas beingpledoooninformationand belief"arelikelytohaveevidentiarysupport afterareasonableopportunityforfurther investigationordiscovery.NATUREOF THISACTION1. This isan action for rescissionand damagesasa result of the violationby theDefendantsof the CaliforniaCorporateSecuritiesAct,the federal SecuritiesActof 1933, heCalifornia CivilCode, and the common aw. Asalleged n detailbelow, the Defendantssold orissued o the Bank36 certificates n33 securitizationtrustsbackedby residentialmortgage oans.The Bankpaidmore than$5.4billionfor thosecertificates.When theyoffered and then soldthesecertificates o the Bank, the Defendantsmade numerousstatements o the Bankabout thecertificatesandthe creditqualityof the mortgage oanshat backedhem. On information andbelief, many of those statementswereuntrue. Moreover, oninformation and beliel theDefendantsomitted to statemany material factsthat were necessary n ordertomaketheirstatements ot misleading. Forexample, he Defendantsmade untruestatements, r omittedimportantinformation, about such material facts ashepercentageof equity that borrowers hadin

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19202l22232425262728

COMPLAINT

I2345678910

their homes,he numberofborrowerswho actuallylivedinthe houseshatsecuredheir loans,thecreditscoresof the borrowers,andthe businesspracticesof the lendershat madehe loans.TheBank reasonablyandustifiablyreliedontheseuntruestatementsndomissionsof importantinformationindeciding topurchasehecertificates.The certificatesare'osecurities"within themeaningof theCalifomia CorporateSecuritiesActand the SecuritiesActof1933.Under thoseActs,the CaliforniaCivilCode, andthe commonlaw,the Bank isentitledto rescind tspurchaseof thecertificatesor to bepaiddamagesor its lossesonthecertificates.2.Eightsecuritiesdealerssoldthesecertificatesothe Bank. Theeight dealersareDefendantsDeutscheBankSecurities nc.(whichsold tothe Bankcertificates n foursecuritizationrusts,which are referredo inthis complaintas SecuritizationsNos. 1through 4),BearSteams& Co. Inc.(foursecuritizations,Nos. 5 through8), CountrywideSecuritiesCorporation(onesecuritization,No.9), Credit SuisseSecuritiesUSA)LLC(sevensecuritizations,Nos.10through 16),GreenwichCapital Markets,Inc.(threesecuritizations,Nos.17 hrough 9),MorganStanley&Co.Inc.(twosecuritizations,os. 20and2l), UBSSecurities,LLC(sevensecuritizations,Nos.22 through28), and MenillLynch,Pierce,Fenner& Smith, Inc.(fivesecuritizations,Nos. 29through 33). Theother Defendantsnamedn this complaintareliableto the Bankbecause hey werethe issuersof some of thosecertificatesor because heycontrolledone of those ssuers.PARTIES3. Plaintiffis abank createdby the FederalHomeLoan BankAct. The headquartersoftheBankare nthe CityandCountyof San Francisco.Under itsOrganizationCertificate, heBank isto operate n FederalHome Loan BankDistrict I l,which compriseshe StatesofArizona,Califomia, and Nevada. TheBank doesoperate n eachof those hree States.4. Defendant DeutscheBankSecurities nc.(refenedtoasDeutsche)s a corporationorganizedunderthelawsof Delaware. DeutschesoldtheBankfourof thecertificates.5. DefendantDeutscheAlt-ASecurities, nc.(referredo as Deutsche Alt-A)is acorporationorganizedunder the lawsof Delaware.DeutscheAlt-A wastheissuerof oneof thecertificateshat Deutschesold to the Bank.

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