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Case 2:08-Cv-03178-LDWARL Document 18 Filed 05/05/2009 Page 1 of 3 Case 2:08-cv-03178-LDWARL Document 18 Filed 05/05/2009 Page 1 of 3 UNI lED STA lES DISTRICT COURT EAS lERN DISTRICT OF NEW YORK MASSACHUSETTS BRICKLAYERS AND : Civil Action No. 08-CIV-03178 MASONS TRUST FUNDS, Individually and On Behalf of All Others Similarly Situated, • CLASS ACTION Plaintiff, . THE MASSACHUSETTS BRICKLAYERS AND MASONS TRUST FUNDS AND THE vs. PIPEFIT lERS' RETIREMENT FUND • LOCAL 597'S MOTION FOR DEUTSCHE ALT-A SECURITIES, INC., et APPOINTMENT AS LEAD PLAINTIFF al., . AND APPROVAL OF LEAD PLAINTIFF'S • SELECTION OF LEAD COUNSEL Defendants. ' Case 2:08-cv-03178-LDWARL Document 18 Filed 05/05/2009 Page 2 of 3 TO ALL PARTIES AND THEIR COUNSEL OF RECORD PLEASE TAKE NOTICE that proposed lead plaintiff the Massachusetts Bricklayers and Masons Trust Funds and the Pipefitters' Retirement Fund Local 597 (the "Trust and Retirement Funds") will and hereby do move this Court, on a date and at such time as may be designated by the Court, at 944 Federal Plaza, Central Islip, NY 11722 for an order: (1) appointing the Trust and Retirement Funds as lead plaintiff pursuant to the Private Securities Litigation Reform Act of 1995, 15 U.S.C. §77z-1; and (2) approving the Trust and Retirement Funds' selection of Coughlin Stoia Geller Rudman & Robbins LLP and Labaton Sucharow LLP as lead counsel. In support of this motion, the Trust and Retirement Funds submit the accompanying Memorandum of Law, the Declaration of David A. Rosenfeld and a [Proposed] Order. DA 1ED: March 27, 2009 COUGHLIN STOIA GELLER RUDMAN & ROBBINS LLP SAMUEL H. RUDMAN DAVID A. ROSENFELD s/ DAVID A. ROSENFELD DAVID A. ROSENFELD 58 South Service Road, Suite 200 Melville, NY 11747 Telephone: 631/367-7100 631/367-1173 (fax) COUGHLIN STOIA GELLER RUDMAN & ROBBINS LLP THOMAS E. EGLER SCOTT H. SAHAM 655 West Broadway, Suite 1900 San Diego, CA 92101 Telephone: 619/231-1058 619/231-7423 (fax) -1- Case 2:08-cv-03178-LDW-ARL Document 18 Filed 05/05/2009 Page 3 of 3 LABATON SUCHAROW LLP CHRISTOPHER J. KELLER JONATHAN GARDNER 140 Broadway, 34th Floor New York, NY 10005 Telephone: 212/907-0700 212/818-0477 (fax) [Proposed] Co-Lead Counsel for Plaintiff Document I -2- Case 2:08-cv-03178-LDW-ARL Document 18-2 Filed 05105/2009 Page 1 of 10 UNI lED STA lES DISTRICT COURT EAS lERN DISTRICT OF NEW YORK MASSACHUSETTS BRICKLAYERS AND : Civil Action No. 08-CIV-03178 MASONS TRUST FUNDS, Individually and On Behalf of All Others Similarly Situated, • CLASS ACTION Plaintiff, . MEMORANDUM OF LAW IN SUPPORT OF THE MASSACHUSETTS vs. BRICKLAYERS AND MASONS TRUST • FUNDS AND THE PIPEFIT1ERS' DEUTSCHE ALT-A SECURITIES, INC., et RETIREMENT FUND LOCAL 597'S al., . MOTION FOR APPOINTMENT AS LEAD • PLAINTIFF AND APPROVAL OF LEAD Defendants. PLAINTIFF'S SELECTION OF LEAD x COUNSEL Case 2:08-cv-03178-LDVV-ARL Document 18-2 Filed 05/05/2009 Page 2 of 10 TABLE OF CONTENTS Page I. INTRODUCTION II. FACTUAL BACKGROUND 2 III. ARGUMENT 4 A. The Trust and Retirement Funds Should Be Appointed Lead Plaintiff 4 1. The Trust and Retirement Funds' Motion Is Timely 5 2. The Trust and Retirement Funds Have the Largest Financial Interest in the Relief Sought by the Class 5 3. The Trust and Retirement Funds Otherwise Satisfy Rule 23 of the Federal Rules of Civil Procedure 6 B. The Court Should Approve the Trust and Retirement Funds' Selection of Lead Counsel 7 IV. CONCLUSION 8 _ _ Case 2:08-cv-03178-LDW-ARL Document 18-2 Filed 05105/2009 Page 3 of 10 Proposed lead plaintiff the Massachusetts Bricklayers and Masons Trust Funds and the Pipefitters' Retirement Fund Local 597 (the "Trust and Retirement Funds") respectfully submit this memorandum of law in support of their motion for: (1) appointment as lead plaintiff in the above- referenced action pursuant to the Private Securities Litigation Reform Act of 1995 ("PSLRA"), 15 U.S.C. §77z-1; and (2) approval of their selection of Coughlin Stoia Geller Rudman & Robbins LLP ("Coughlin Stoia") and Labaton Sucharow LLP as lead counsel for the class. I. INTRODUCTION The above-captioned action is brought on behalf of all persons who acquired the Mortgage Pass-Through Certificates (the "Certificates") of Deutsche Alt-A Securities, Inc. ("Deutsche Alt-A" or the "Depositor") pursuant and/or traceable to the false and misleading registration statement and prospectus supplements issued in connection therewith by Deutsche Alt-A between May 2006 and May 2007 (collectively, the "Registration Statement"). This action involves solely strict liability and negligence claims brought pursuant to the Securities Act of 1933 (the "1933 Act"). Pursuant to the PSLRA, the Court is to appoint as lead plaintiff the person or group of persons with the largest financial interest in the relief sought by the class that otherwise satisfy the requirements of Fed. R. Civ. P. 23. 15 U.S.C. §77z-1(a)(3)(B). Here, the Trust and Retirement Funds should be appointed as lead plaintiff because they: (1) timely filed their motion for appointment as lead plaintiff; (2) have the largest financial interest in the outcome of this litigation of any person or groups of persons of which they are aware; and (3) will adequately represent the interests of the class. See 15 U.S.C. §77z-1(a)(3)(B)(iii); see also Declaration of David A. Rosenfeld in Support of the Massachusetts Bricklayers and Masons Trust Funds and the Pipefitters' Retirement Fund Local 597's Motion for Appointment as Lead Plaintiff and for Approval of Lead Plaintiff's Selection of Lead Counsel ("Rosenfeld Decl."), Ex. A. -1- Case 2:08-cv-03178-LDW-ARL Document 18-2 Filed 05105/2009 Page 4 of 10 In addition, the Trust and Retirement Funds' selection of Coughlin Stoia and Labaton Sucharow to serve as lead counsel should be approved because these firms possess extensive experience in the prosecution of securities class actions and will adequately represent the interests of all class members. See Rosenfeld Ded., Exs. C-D. FACTUAL BACKGROUND Deutsche Alt-A is a Delaware corporation formed in 2002 for the purpose of acquiring and owning mortgage loan assets and selling interests in them. Deutsche Alt-A is a subsidiary of DB Structural Products, Inc. and is a special purpose corporation. The issuers of the various offerings (the "Defendant Issuers") are the Trusts established by Deutsche Alt-A to issue billions of dollars worth of Certificates in 2006-2007.1 On May 1, 2006, Deutsche Alt-A and the Defendant Issuers caused a Registration Statement to be filed with the Securities and Exchange Commission ("SEC") in connection with and for the purpose of issuing hundreds of millions of dollars of Certificates. The Certificates were issued pursuant to Prospectus Supplements, each of which was incorporated into the Registration Statement. The Certificates were supported by pools of mortgage loans generally secured by liens on residential properties, including conventional and adjustable rate mortgage loans. 1 The Defendant Issuers are: Deutsche Alt-A Securities Mortgage Loan Trust, Series 2006- AR2; Deutsche Alt-A Securities Mortgage Loan Trust, Series 2007-AR3; Deutsche Alt-A Securities Mortgage Loan Trust, Series 2006-AR3; Deutsche Alt-A Securities Mortgage Loan Trust, Series 2007-0A2; Deutsche Alt-A Securities Mortgage Loan Trust, Series 2006-AR4; Deutsche Alt-A Securities Mortgage Loan Trust, Series 2007-RAMP1; Deutsche Alt-A Securities Mortgage Loan Trust, Series 2006-AR5; Deutsche Alt-B Securities Mortgage Loan Trust, Series 2006-AB2; Deutsche Alt-A Securities Mortgage Loan Trust, Series 2006-AR6; Deutsche Alt-B Securities Mortgage Loan Trust, Series 2006-AB3; Deutsche Alt-A Securities Mortgage Loan Trust, Series 2006-0A1; Deutsche Alt-B Securities Mortgage Loan Trust, Series 2006-AB4; Deutsche Alt-A Securities Mortgage Loan Trust, Series 2007-AR2; and Deutsche Alt-B Securities Mortgage Loan Trust, Series 2007-AB1. See Complaint, 9113. -2- Case 2:08-cv-03178-LDW-ARL Document 18-2 Filed 05105/2009 Page 5 of 10 The Registration Statement was false and misleading because it included false statements and/or omissions about (i) the underwriting standards purportedly used in connection with the underwriting of the underlying mortgage loans; (ii) the maximum loan-to-value ratios used to qualify borrowers; (iii) the appraisals of properties underlying the mortgage loans; and (iv) the debt-to- income ratios for applicants associated with the underlying mortgage loans. In fact, the originators of the underlying mortgage loans held by the Defendant Issuers were issued to borrowers who: (i) did not meet the prudent or maximum debt-to-income ratio purportedly required by the lender; (ii) did not provide adequate documentation to support the income and assets required to issue the loans pursuant to the lenders' own guidelines; (iii) were steered to stated income/asset and low documentation mortgage loans by lenders, lenders' correspondents or lenders' agents, such as mortgage brokers, because the borrowers could not qualify for mortgage loans that required full documentation; and (iv) did not have the income or assets required by the lenders' own guidelines necessary to afford the required mortgage loan payments, which resulted in loans that borrowers could not afford to pay. Moreover, the lenders and/or their agents knew that the borrowers either could not provide the required documentation or the borrowers refused to provide it and that the appraised values of many properties were regularly inflated, as appraisers were induced by lenders, lenders' correspondents and/or their mortgage brokers/agents to provide the desired appraisal value regardless of the actual value of the underlying property so the loans would be approved. In this way many appraisers were rewarded for their willingness to support predetermined property values in direct violation of USPAP appraisal regulations.2 2 The Uniform Standards of Professional Appraisal Practice ("USPAP") are the generally accepted standards for professional appraisal practice in North America.
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