The Firm has achieved dismissal of all underwriters in a securities fraud class action brought on behalf of a putative class of Federal Home Loan Mortgage Company ("Freddie Mac") shareholders in a coordinated proceeding before Judge Miriam Goldman Cedarbaum of the Southern District of New York.
Firm clients Goldman, Sachs & Co., J.P. Morgan Securities Inc., Banc of America Securities LLC, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Morgan Stanley & Co. Incorporated and several former officers of Freddie Mac, were first named in the action in January 2009. In January 2010, the Firm won dismissal of a 269-page complaint, which alleged Section 10(b) claims against the underwriters of Freddie Mac Series Z Preferred Stock and the individual defendants. Recognizing the weak allegations against the underwriting syndicate, Plaintiffs’ amended complaint dropped six of the eight underwriters – all but Joint Book-Running Manager Goldman, Sachs & Co. and Senior Co-Lead Manager J.P. Morgan Securities Inc. In July, the Firm again won dismissal of the claims against the remaining underwriters, successfully arguing that Plaintiffs had failed to allege a strong inference of scienter. In October, Judge Cedarbaum again dismissed Plaintiffs’ complaint for a third time, expressing strong criticism for the trend of lengthy securities class action complaints. Before filing a Third Amended Complaint on November 4, 2010, Plaintiffs dropped the two remaining underwriters. With this dismissal, the underwriters of Freddie Mac preferred stock are no longer named in any class action complaint related to the events surrounding Freddie Mac’s conservatorship or the underwriting of Freddie Mac securities.
The STB team consists of Michael J. Chepiga, George Wang, Craig S. Waldman, Jodie Sopher Pimentel, Shannon Price Torres and Shruti Raju, with assistance from paralegal Farrah Faverey.