Cornerstone Research worked on several phases of one bodog app download earliest RMBS matters, including class certification, summary judgment, and expert Daubert motions.
In a case stemming from the housing and credit crises, the plaintiffs accused a major bank and other defendants of using misleading offering documents. The case was one bodog app download earliest bodog app download residential mortgage-backed securities (RMBS) matters and went through multiple phases: class certification, motion to dismiss, summary judgment, expert reports and depositions, and expert Daubert motions.
Counsel for the bank retained Dr. Allan Kleidon, a senior vice president at Cornerstone Research, to opine on issues related to class certification, damages, and loss causation. Cornerstone Research also worked with Mr. Charles Grice of CRI Compliance on due diligence practices, and with Professor Arnold Barnett bodog app download MIT Sloan School of Management on statistical sampling issues.
Dr. Kleidon concluded that losses in question were not caused by the alleged misrepresentations and omissions.
The plaintiffs alleged that the offering documents related to the issuance of more than billion of RMBS that the bank underwrote between 2006 and 2007 contained material misstatements and omitted material information concerning applicable home loan underwriting standards. The allegations included violations of Sections 11, 12, and 15 bodog app download Securities Act.
Dr. Kleidon demonstrated that the overall performance bodog app download loan pools in question was not statistically different from predictions, based on loans that were found to comply with underwriting guidelines by a third party during the original due diligence process. He also cited the poor overall market conditions during the relevant period and the consequent implications for the performance bodog app download mortgages. Dr. Kleidon concluded that losses in the value bodog app download underlying mortgage pools and subsequent certificate holder losses were not caused by the alleged misrepresentations and omissions.
Mr. Grice analyzed the due diligence processes and determined that all relevant practices employed by the bank met or exceeded typical industry practice at the time, both in terms bodog app download number of loans reviewed and the level of scrutiny applied in these reviews. Professor Barnett identified multiple methodological errors in the plaintiffs’ sampling protocol and statistical conclusions.
The case settled in 2016.