* Lawsuit can proceed on 13 tranches, 110 are dismissed
* Judge grants class certification on remaining claims
Oct 24 A U.S. judge narrowed a lawsuit brought
by buyers of mortgage backed securities from Washington Mutual
Inc who alleged they were misled on the quality of
the underlying loans, according to a ruling.
The decision released last week finds that plaintiff
pension funds have the right or standing to proceed on 13
tranches of MBS, but dismisses from the lawsuit claims related
to 110 other tranches.
A tranche is a piece of a securities offering.
U.S. District Judge Marsha Pechman in Seattle also granted
class certification for the 13 remaining tranches in the case.
Plaintiff attorney Steven Toll said he was pleased about
the class action ruling.
"While we are disappointed that the court did not uphold
our standing to represent those who filed similar claims
against WaMu, this is very good news for investors in the
class," Toll said in a statement.
A WaMu representative did not have an immediate comment on
Pechman ruled that the plaintiffs only have the right to
pursue claims on tranches that they actually purchased, but not
others that were sold in the same offering.
Pechman's ruling is similar to a separate opinion last year
from a federal judge in Los Angeles, who dismissed MBS claims
involving Bank of America's Countrywide unit.
The WaMu case in U.S. District Court, Western District of
Washington, is In Re Washington Mutual Mortgage-Backed
Securities Litigation, 09-37.