Oct 24 (Reuters) - A federal 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.
Washington Mutual filed for Chapter 11 bankruptcy when
regulators seized its savings and loan institution in September
2008 in the biggest bank failure in U.S. history. The thrift
was sold to JPMorgan Chase & Co and the parent company landed
in bankruptcy.
Andrew Siegel, a spokesman for Washington Mutual Inc, said
on Monday that the company is reviewing the order and
"assessing potential impact, if any, on its Chapter 11
proceedings."
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.
For plaintiffs and proposed class: Kim Stephens and Janissa
Strabuk of Tousley Brain Stephens.
For Washington Mutual: Louis Peterson of Hillis Clark
Martin & Peterson and David Balabanian, John Pernick, Jee You,
Frank Busch and Theo Robins of Bingham McCutchen.
(Reporting by Dan Levine)
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