Levine Lee News

Firm Secures Important Ruling in Countrywide Litigation

Adopting a novel argument not previously ruled on, the Honorable Mariana R. Pfaelzer of the U.S. District Court for the Central District of California dismisses with prejudice a claim filed under Section 11 of the Securities Act of 1933 against our client David A. Spector in securities litigation arising from Countrywide’s sale of mortgage-backed securities to Fannie Mae and Freddie Mac. Levine Lee argued that under the securities laws and SEC regulations, Mr. Spector and other individuals who served as officers and directors of a Countrywide subsidiary could not be liable for allegedly false statements in prospectus supplements post-dating the effective date of the registration statements that the individuals signed. The Court agreed that the registration statements did not contain any allegedly false statements as of their effective date for which the signatories could be liable under Section 11 and dismissed this claim with prejudice. Seth L. Levine and Scott B. Klugman worked on the matter, and Mr. Klugman argued the issue on behalf of all the individual defendants.

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