News & Events

On November 24, 2009, Judge Paul A. Crotty of the Southern District of New York denied a motion to remand filed by the plaintiff in a case originally brought in New Jersey state court against the Firm's clients Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated, UBS Securities LLC and Wachovia Capital Markets, as underwriters of Federal National Mortgage Association's ("Fannie Mae") offering of Series T Preferred Stock. STB and counsel for co-defendants Fannie Mae and certain ratings agencies removed the case in October 2008 and opposed a motion to remand in the District of New Jersey in January 2009. Before a decision was issued, the case was transferred to the Southern District of New York and consolidated with 18 other federal securities class actions pending in the SDNY.

Plaintiff contended that the 1933 Securities Act prohibits the removal Securities Act claims to federal court. Defendants argued that federal jurisdiction was proper because the Securities Litigation Uniform Standards Act ("SLUSA") amended Section 22(a) of the 1933 Securities Act to eliminate concurrent jurisdiction in favor of exclusive federal jurisdiction and permit removal to federal court. Defendants also argued that Fannie Mae’s statutory charter, allowing it to “sue and be sued” in “any court . . . State or Federal,” provided an independent basis for removal. Judge Crotty agreed with Defendants, holding that "class action claims under federal or state securities law are removable, and upon removal, the Court has subject matter jurisdiction." In a separate Order the same day, Judge Crotty granted motions to dismiss the 1933 Securities Act claims in the consolidated class action filed by STB together with counsel for other defendants.

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.