Good news for BNY Mellon lawsuit
15 October 2012 New York
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Filed in July 2009, a lawsuit against BNY Mellon looks to drag on even longer after a judge recently denied a motion for class certification.
Three years ago, the Southern California IBEW-NECA Defined Contribution Plan alleged that BNY Mellon failed to invest the plan鈥檚 collateral in a prudent manner when they held the collateral under its lending programme in Lehman Brothers.
BNY Mellon was said to have violated the Employee Retirement Income Security Act by investing securities-lending cash collateral in allegedly risky notes issued by Lehman Brothers Holdings; and by refusing to sell such notes despite alleged warnings about the lack of liquidity in the credit market and declines in the market value of the investments. After Lehman鈥檚 bankruptcy filing, the plan lost 鈥渁lmost $3 million,鈥� said the plaintiffs.
In response, the bank stated: 鈥淢onday morning quarterbacking cannot overcome the fact that the [Lehman] bankruptcy was a surprise to BNY Mellon as well as to the plaintiff, as shown by the fact that the plaintiff never asked BNY Mellon or any of the plaintiff鈥檚 other investment managers to divest the plan鈥檚 widely held investments in Lehman.鈥�
A judge in the US District Court for New York recently denied a motion for class certification filed by the board of trustees of the Southern California plan.
A team from Analysis Group, led by Managing Principals Andrew Wong and Keith R. Ugone, and Vice Presidents Steven Saeger and Na Dawson, was retained by Boies Schiller & Flexner on behalf of the defendants to address issues related to class certification.
Ugone stated that a class-wide approach would mask important differences among proposed class members鈥� individual investment expectations due to differences in the plans鈥� maturity guidelines, credit-quality guidelines, prohibited investments, and diversification requirements.
Citing Ugone鈥檚 report widely in his decision, Judge Richard Berman said the plaintiff鈥檚 claims failed to meet conditions of numerosity and commonality, because the plaintiff had not established that 鈥渃ommon questions of law or fact predominate over individual issues.鈥� He denied the plaintiff鈥檚 motion for class certification.
Three years ago, the Southern California IBEW-NECA Defined Contribution Plan alleged that BNY Mellon failed to invest the plan鈥檚 collateral in a prudent manner when they held the collateral under its lending programme in Lehman Brothers.
BNY Mellon was said to have violated the Employee Retirement Income Security Act by investing securities-lending cash collateral in allegedly risky notes issued by Lehman Brothers Holdings; and by refusing to sell such notes despite alleged warnings about the lack of liquidity in the credit market and declines in the market value of the investments. After Lehman鈥檚 bankruptcy filing, the plan lost 鈥渁lmost $3 million,鈥� said the plaintiffs.
In response, the bank stated: 鈥淢onday morning quarterbacking cannot overcome the fact that the [Lehman] bankruptcy was a surprise to BNY Mellon as well as to the plaintiff, as shown by the fact that the plaintiff never asked BNY Mellon or any of the plaintiff鈥檚 other investment managers to divest the plan鈥檚 widely held investments in Lehman.鈥�
A judge in the US District Court for New York recently denied a motion for class certification filed by the board of trustees of the Southern California plan.
A team from Analysis Group, led by Managing Principals Andrew Wong and Keith R. Ugone, and Vice Presidents Steven Saeger and Na Dawson, was retained by Boies Schiller & Flexner on behalf of the defendants to address issues related to class certification.
Ugone stated that a class-wide approach would mask important differences among proposed class members鈥� individual investment expectations due to differences in the plans鈥� maturity guidelines, credit-quality guidelines, prohibited investments, and diversification requirements.
Citing Ugone鈥檚 report widely in his decision, Judge Richard Berman said the plaintiff鈥檚 claims failed to meet conditions of numerosity and commonality, because the plaintiff had not established that 鈥渃ommon questions of law or fact predominate over individual issues.鈥� He denied the plaintiff鈥檚 motion for class certification.
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