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Pension Funds-Led Litigation Results in Third Largest MBS Class Action Payment
A federal judge has given final approval to a $275 million cash settlement in the mortgage-backed (MBS) class action litigation against Royal Bank of Scotland (RBS) and others led by New Jersey Carpenters Health Fund and the Boilermaker Blacksmith Pension Trust, along with additional class representatives Iowa Public Employees’ Retirement System and Midwest Operating Engineers Pension Trust Fund. Plaintiffs are represented by Cohen Milstein Sellers & Toll PLLC.
In issuing her order approving the settlement on Tuesday, November 4, Judge Loretta A. Preska, of the U.S. District Court for the Southern District of New York, commented that the case brought on behalf of the plaintiffs was “interesting and different” and that the settlement on their behalf “was a job well done.” The Court’s approval of the settlement brings to a close the consolidated class action lawsuit brought in 2008 by the pension funds against RBS and other defendants for securities violations involving the packaging and sale of 14 public offerings of “Harborview” series MBS.
“This settlement gives closure and monetary relief to the investors who suffered losses in connection with these Harborview mortgage-backed securities,” said Cohen Milstein Managing Partner Steven J. Toll, whose firm had been named Lead Counsel in the consolidated class action by the Court.
Lead counsel Joel P. Laitman, a partner at Cohen Milstein, added: “We are pleased with Judge Preska’s decision and her recognition that this was a different case that took many legal twists and turns over the years. Final approval of this settlement is proof that perseverance for a just cause is worth it.”
The plaintiffs charged that the public offering documents RBS used to sell the Harborview MBS certificates failed to disclose that the mortgage loans collateralizing the certificates were not originated in accordance with the applicable underwriting guidelines. By late 2008, virtually all of those certificates were downgraded to junk bond status.
