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The U.S. District Court for the Central District of California has approved a $500 million settlement between Countrywide Financial Corp. and investors. The nation’s largest Mortgage Backed Securities (MBS) class action lawsuit was filed in 2010 against Countrywide and other defendants by a number of retirement funds. The plaintiffs had alleged Countrywide of violating securities laws in the packaging and sale of MBS. Countrywide was acquired by the Bank of America in 2008.
The lawsuit had alleged that the plaintiffs and other investors were misled into purchasing billions of dollars worth of MBS certificates which were backed with defective loans that originated from Countrywide. By 2008, almost all of those certificates were worthless.
The complaint specifically alleged that registration statements and prospectus supplements issued in connection with the certificates had contained materially false and misleading statements and omitted material information in violation of Sections 11, 12(a)(2) and 15 of the Securities Act.
Plaintiffs included entities like the Iowa Public Employees’ Retirement System, Oregon Public Employee Retirement Fund, the Orange County Employees’ Retirement System and the General Board of Pension and Health Benefits of the United Methodist Church among others.
The Iowa Public Employees’ Retirement System was the lead plaintiff and represented by Cohen Milstein Sellers & Toll PLLC.
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Besides the principal case of Maine State Retirement System et al., v. Countrywide Financial Corp., et al., other cases settled under the same agreement include David H. Luther v. Countrywide Financial Corp., et al., and Western Conference of Teamsters Pension Trust Fund v. Countrywide Financial Corp., et al.
Speaking on the approval of the settlement that brought the litigation to a close, Plaintiff’s Lead Counsel Steven J. Toll said, “We are delighted to have secured the nation’s largest MBS class action settlement on behalf of Countrywide investors.”
Class members have until December 15, 2013 to file settlement claims.
