Overview
In a three-page opinion yesterday, Judge Cederbaum dismissed, with leave to re-plead, a purported class action against Goldman Sachs and others relating to a mortgage-backed bond issuance because the plaintiffs failed to allege the bonds missed a payment or that any of the alleged misrepresentations concerned the underlying loans:
PFRS alleges that it suffered injury when the certificates were downgraded by the ratings agencies, thus making them less valuable. However, given that the certificates have never missed a payment and that the downgrade occurred during the midst of the housing crisis, this is not enough to show injury. PFRS has failed to allege that any of the misrepresentations specified in the complaint applied to the particular mortgages underlying the certificates it purchased. The motion to dismiss is granted with leave to PFRS to file an amended complaint by no later than July 9, 2012, setting out with specificity how the alleged misrepresentations made by Defendants affected the value of the particular certificates it purchased.The defendants are represented by Sullivan & Cromwell.
