On November 24, 2009, STB won dismissal of all claims asserted against its clients Merrill Lynch, Pierce, Fenner & Smith, Inc., Citigroup Global Markets, Inc., Morgan Stanley & Co. Incorporated, UBS Securities, LLC, Wachovia Capital Markets, LLC, Wachovia Securities, LLC, Goldman, Sachs & Co., Banc of America Securities LLC, Barclays Capital Inc., Deutsche Bank Securities Inc., Wells Fargo Securities LLC, J.P. Morgan Securities Inc., E* Trade Securities LLC, and Bear, Stearns & Co., Inc. (n/k/a J.P. Morgan Securities Inc.) in a consolidated putative class action alleging Securities Act of 1933 claims against them as underwriters of five offerings totaling over $14 billion of Federal National Mortgage Association's ("Fannie Mae") preferred and common stock.
Judge Paul A. Crotty of the Southern District of New York ruled that plaintiffs' 1933 Securities Act claims, the only claims asserted against the underwriters, fail as a matter of law because (1) Fannie Mae's securities are exempt under Section 3(a)(2) of the 1933 Act, and (2) the 1933 Act does not apply to securities issued by any person “controlled or supervised by and acting as an instrumentality of the government of the United States.” STB, along with Fannie Mae's counsel, had previously achieved consolidation of nineteen securities class actions alleging 1933 Securities Act and 1934 Exchange Act claims against Fannie Mae, the underwriters, and several of its former officers and directors. The Firm's clients are not named in the 1934 Act claims, and are thus dismissed from the coordinated class actions in their entirety.
The STB team consists of Michael J. Chepiga, George Wang, Craig Waldman, Agnes Dunogue, Jodie Sopher, Shannon Torres and Shruti Raju, with valuable assistance from paralegal Farrah Faverey.