Here’s the good news for mortgage-backed securities defendants.
The U.S. Court of Appeals for the Second Circuit made it clear that MBS issuers and underwriters can successfully oppose class certification by arguing some investors knew what they were getting into and the question of investor knowledge is too individualized for class treatment. That’s a key ruling for the broader MBS litigation since so many class action plaintiffs are big pension funds that touted their own mastery of the MBS market before the crash. Expect that part of Monday’s ruling to show up in future opposition papers and maybe even a motion for decertification or two.
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