Investors have brought a handful of financial crisis class actions in which investors sued banks that served as mortgage-backed securities trustees, rather than targeting the banks that issued or underwrote the securities.
In addition to bringing breach of contract claims, plaintiffs lawyers at Scott + Scott dusted off a 1939 law called the Trust Indenture Act that makes trustees liable for failing their duties to investors. That litigation campaign has so far survived motions to dismiss in cases against Bank of New York Mellon, Bank of America, and U.S. Bancorp’s U.S. Bank National Association unit.
