Goodwin Procter obtained a significant victory for its client, Countrywide Financial Corporation, when the U.S. District Court for the Central District of California granted Countrywide's motion to dismiss the amended complaint in Maine State Retirement System v. Countrywide Financial Corporation, et al. on November 4, 2010. The Maine State case is a putative class action asserting claims under the Securities Act of 1933 relating to numerous public offerings of mortgage-backed securities issued by subsidiaries of Countrywide, formerly one of the largest residential mortgage lenders in the country. The complaint was dismissed in its entirety, with leave to amend, for lack of standing and on statute of limitations grounds.
In comments released to the media, Bank of America Corporation (Countrywide's parent corporation) said it "expects that the Court’s ruling will result in a substantial reduction in the number of offerings at issue in the Maine State case, from 427 offerings (which had a total notional amount at issuance of approximately $352 billion) to no more than approximately 22 offerings (which had a total notional amount at issuance of approximately $31 billion)."
The New York Times and Bloomberg reported on the impact of this important decision.
Brian E. Pastuszenski, who represents Countrywide in the case and who co-chairs Goodwin Procter’s Securities Litigation and SEC Enforcement practice, is quoted in the media coverage as saying that "[t]he court's ruling demonstrates the strict legal hurdles plaintiffs face in bringing these sorts of claims."
For more information, please read Bank of America's press release.