Federal Housing Finance Agency v. UBS Americas Inc.
2013 U.S. App. LEXIS 6962
2d Cir.2013Background
- FHFA, as conservator for Fannie Mae and Freddie Mac, sued UBS for fraud and misrepresentation in mortgage-backed securities offerings.
- District court denied UBS’s timeliness and standing challenges and certified the order for interlocutory appeal.
- HERA §4617(b)(12) extender statute sets the applicable limitations for FHFA actions, including discovery- or accrual-based clocks and when limitations begin.
- FHFA appointed conservator on Sept. 6, 2008 (Lockhart); DeMarco later designated Acting Director after Lockhart’s resignation.
- Seventeen related actions were filed; the second amended complaint asserts violations of securities laws and state blue sky laws, plus negligent misrepresentation (dismissed).
- FHFA filed the suit on July 27, 2011, within the extender period after conservatorship began.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether HERA extender statute applies to securities claims | FHFA falls under §4617(b)(12) for all actions as conservator | Statute of repose applicable to certain claims not covered by extender | Yes; extender statute applies to all FHFA actions |
| Whether FHFA has standing to sue given acting-director appointments | Lockhart and DeMarco acts are germane to FHFA's mission | Appointments may violate Appointments Clause | FHFA had standing to bring the action |
Key Cases Cited
- Lampf, Pleva, Lipkind, Prupis & Petigrow v. Gilbertson, 501 U.S. 350 (U.S. 1991) (statute of repose discussed in securities claims)
- Ernst & Ernst v. Hochfelder, 425 U.S. 185 (U.S. 1976) (defining scienter and securities claim standards)
- P. Stolz Family P'ship v. Daum, 355 F.3d 92 (2d Cir. 2004) (treats securities act limitations as reconsidered in extender context)
- In re WorldCom Sec. Litig., 496 F.3d 245 (2d Cir. 2007) (references two-tiered limitations for securities claims)