Judge Mariana Pfaelzer noted that the court “has repeatedly denied motions to dismiss complaints alleging that Countrywide committed fraud against RMBS investors through misstatements in the offering documents.” She says this motion and complaint are “no different.” the court declared.
Continuing, it concluded that AIG plausibly alleged that the underwriting guidelines in the offering documents were false. Further, the court said, the amended complaint describes “a company-wide culture of abandonment of underwriting standards and wholesale use of ’exceptions’ to the normal standards.”
In other specifics, the court said AIG met its burden to plead “actual reliance by stating that it ’received, reviewed, and relied upon’” the offering materials and but for the misrepresentations and omissions in the offering materials, it would not have purchased or acquired the RMBS.
”The facts may prove otherwise,“ the court wrote, ”but for now those allegations suffice to demonstrate an adequate causal nexus between misrepresentation and damage.“
The court further determined that the defendants made misrepresentations regarding “third party deals.” The amended complaint alleged that the defendants made material misrepresentations as an “originator,” and “provided these misrepresentations to the RMBS sponsor, depositor, and underwriter knowing the information would be passed on to investors in the Offering Materials.”
To see the decision, go to http://www.bloomberglaw.com/public/document/American_International_Group_Inc_et_al_v_Bank_of_America_Corporat/1.
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