The Securities Industry and Financial Markets Association (SIFMA), late last week, said the Fifth Circuit Court of Appeals decision to reinstate the Federal Deposit Insurance Corporation (FDIC) $2.1 billion mortgage-backed securities suit (see previous blog) incorrectly interpreted a statute increasing the limitations for filing such suits and flies in the face of Supreme Ct. precedent.
SIFMA filed an amicus brief arguing last month's holding that a FDIC statute preempting all state statutes of limitations also applies to more stringent statutes of repose. In so doing, the appeals court ruled in favor of the FDIC and revived a suit against Deutche Bank AG, Royal Bank of Scotland (RBS) and Goldman Sachs & Co. SIFMA's brief argued the statute referred only to statutes of limitations, not statutes of repose.
SIFMA submitted the brief a week after Deutsche Bank AG and Royal Bank of Scotland PLC asked the full court (en banc) to rehear the arguments, stating the earlier decision conflicted with the Supreme Court’s early summer ruling in CTS Corp. v. Waldburger, which held that a similar extender provision in the Comprehensive Environmental Response, Compensation and Liability Act did not preempt statutes of repose.
The FDIC had relied on the statute of limitation extender to toll the Texas Securities Act’s statute of repose when commission filed the suit in 2012. The FDIC suit accused the three banking giants of making false and misleading statements when underwriting and marketing billions of dollars in questionable Residential Mortgage Backed Securities (RMBS) certificates back in 2004 and 2005. The FDIC was acting as receiver for a major Texas Bank that had failed three years prior, allegedly in part because it purchased RMBS from the three defendants.
The experienced securities litigation attorneys at Colling Gilbert Wright & Carter have litigated and resolved hundreds of FINRA arbitration claims. If you believe you lost money due to negligence or fraud on the part of your FINRA registered broker dealer, please contact us for a free case evaluation.