This lawsuit, originally filed on May 15, 2008 in the New York Supreme was removed to the federal district court on June 2, 2008. The class action charges violations of the 1933 Act. As summarized in Kevin LaCroix’s D&O Diary blog, the three trusts were issuers of mortgage pass-through certificates created by Royal Bank of Scotland’s subsidiaries, Greenwich Capital, and collateralized with loans underwritten by Countrywide Home Loan. The complaint alleges that the Registration Statement issued in connection with the offerings failed to disclose “the true impaired and defective quality of the loans collateralizing the Bonds” and that the “loans were not originated pursuant to the underwriting guidelines stated in the Registration Statement.” The complaint also alleges that the rating agency defendants “failed to conduct due diligence and willingly assigned the highest ratings to such impaired instruments since they received substantial fees from the issuer.” The complaint alleges further that the rating agencies “issued the ratings based on an outdated methodology designed in about 2002.” The ratings were alleged to be misleading because the rating agencies “presumed that the loans were of high credit quality issues in compliance with the stated underwriting guidelines, when, in fact, Countrywide had systematically disregarded its stated Underwriting Guidelines.” Mr. LaCroix notes in his blog, “As far as I am aware, the plaintiffs’ complaint in the HarborView Mortgage Loan Trust lawsuit represents the first occasion as part of the current subprime litigation wave where subprime investors have sought to hold the rating agencies liable for their ratings.”

If you bought HarborView Mortgage Loan Trust securities and would like to obtain information about the HarborView Mortgage Loan Trust lawsuit, then you are invited to call Kahn Gauthier Swick, LLC toll free at (866) 467-1400 to speak with an attorney or visit www.kgscounsel.com.