Appeals Court Clears Way For Class Action Against Countrywide

May 20 2011 | 8:51am ET

A California appellate court has cleared the way for a class action against Countrywide Financial, a company whose name is synonymous with the mortgage-backed securities at the heart of the 2008 financial crisis.

The court reversed a 2010 state court decision dismissing claims against Countrywide, a Bank of America unit, on the grounds that the case should have been brought in a federal, not a state court.

On appeal, investors argued that the state court had improperly interpreted portions of the Securities Act allowing investors to file class actions asserting claims in state court. The appellate panel agreed, reversing the lower court's decision in its entirety, allowing the class action to proceed.

Investor David Luther, a number of pension funds and other institutions sued Countrywide alleging the lender issued mortgage-backed securities between 2005 and 2007 with false and misleading statements as stipulated under the federal Securities Act of 1933.


In Depth

bfinance: Fees Falling Across Asset Classes, Yet Overall Investor Costs Still Climbing

May 16 2017 | 9:53pm ET

Despite unprecedented attention on fees, new research from investment consultancy...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Risk-Based Compliance: Why Oversight Of Outsourcing Is Critical

May 10 2017 | 7:02pm ET

Compliance is notoriously one of the trickiest middle office functions for funds...

 

From the current issue of