Overview
As widely reported, the FDIC - acting as receiver for Citizens National Bank and Strategic Capital Bank - has filed three federal lawsuits against a group of banks. Two actions were commenced in the SDNY, and the third in the Central District of California. The complaint in FDIC v. Bear Stearns Asset Backed Securities I LLC et al, which was filed on Friday and has been assigned to Judge Swain, is here. That action alleges Securities Act violations in connection with CNB and SCB's purchases of residential mortgage backed securities issued and underwritten by the defendant banks, which include Bear Stearns, Citi, CSFB, Merrill Lynch, Royal Bank of Scotland, HSBC and UBS. The FDIC alleges that the defendants made numerous material misrepresentations regarding mortgage loans in the collateral pool underlying the securities purchased by CNB and SCB, and seeks $66 million in damages. We will post the other two complaints when they become available.