Kramer Levin Files Amicus Brief for SIFMA, The Clearing House and the American Bankers Association in the Second Circuit

On June 14, Kramer Levin filed an amicus brief in the Second Circuit on behalf of the Securities Industry and Financial Markets Association, an association of hundreds of securities firms, banks and asset managers, The Clearing House Association L.L.C., a nonpartisan advocacy organization that represents the interests of its owner banks, and the American Bankers Association, the principal national trade association of the financial services industry in the United States. The brief supports a petition for rehearing and rehearing en banc by UBS Securities LLC, Wells Fargo Asset Securities Corporation, RBS Securities Inc., HSBC Securities (USA) Inc., Credit Suisse Securities (USA) LLC and First Horizon Asset Securities following a decision by a divided panel in a case brought by the Federal Deposit Insurance Corporation (“FDIC”), as Receiver for Colonial Bank. The FDIC asserts claims against these movants under Sections 11 and 12 of the Securities Act of 1933 concerning Colonial’s purchases of mortgage-backed securities in 2006 and 2007. The panel majority construed a provision of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 that extends the “statute of limitations” for the FDIC to bring “contract” or “tort” claims to permit the FDIC to bring claims under the Securities Act after the expiration of its statute of repose.

The amicus brief urges the court to grant the petition for rehearing because the panel majority’s decision is inconsistent with a prior Supreme Court decision finding that similar language in the Comprehensive Environmental Response, Compensation and Liability Act of 1980 applies only to statutes of limitations, and not statutes of repose, and because the decision is enormously important and has nationwide implications for the securities markets.

The case is FDIC v. First Horizon Asset Securities, Inc., et al., No. 14-3648-cv. The Kramer Levin team is Michael J. Dell and Susan Jacquemot. This is the eighth amicus brief we have filed on behalf of SIFMA within the past two years — one in the United States Supreme Court, four in the Second Circuit, two in the Fifth Circuit, and one in the Ninth Circuit. The Clearing House joined four of these briefs and the American Bankers Association has joined two.