Summary of Case:
A securities class action has been filed against Lehman Brothers, Inc. ("LB" or the "Underwriter") on behalf of all purchasers of the following Lehman XS Trust Mortgage Pass-through Certificates (the "Certificates") issued by Structured Asset Securities Corporation ("SASC" or the "Depositor"), LB and Lehman XS Trust Series 2005-5N, Lehman XS Trust Series 2005-7N, Lehman XS Trust Series 2005-9N, Lehman XS Trust Series 2006-2N, and Lehman XS Trust Series 2006-16N (collectively, the "Issuers" or "LXST"):
*Series 2005-5N Certificates pursuant to or traceable to the $2,740,586,000.00 Offering on or about October 28, 2005
*Series 2005-7N Certificates pursuant to or traceable to the $2,391,151,000.00 Offering on or about November 29, 2005
*Series 2005-9N Certificates pursuant to or traceable to the $1,628,731,000.00 Offering on or about December 29, 2005
*Series 2006-2N Certificate pursuant to or traceable to the $2,131,095,000.00 Offering on or about January 30, 2006
*Series 2006-16N Certificates pursuant to or traceable to the $2,191,599,000 Offering on or about September 28, 2006 (collectively, the "Offerings" or the "LXST Offerings").
The complaint alleges that currently, the United States is ensnared in a financial crisis arising, in material part, from the greed which drove financial firms to issue billions of dollars of debt securities "collateralized" or securitized with mortgages which only recently have been revealed to have been recklessly underwritten and originated. The plaintiff and Class as purchasers of the Certificates have been the victims of just such negligent practices, having purchased the Certificates pursuant to Registration Statements which contained misstatements and omissions concerning the mortgage collateral "securitizing'' the Certificates. SASC and other entities related to the Offerings, i.e., the depositor and underwriter defendants, had enormous financial incentive to consummate the Offering of the Certificates as quickly as possible since they were paid upon completion a percentage of the total dollar amount of the Offering sold to investors. Since the risk of the Certificates' collateral failing was not assumed by LXST, SASC or the Underwriters, they all had enormous incentive not to conduct full complete and meaningful due diligence of the statements in the Registration Statement including those relating to the mortgage collateral. Typically, the loans are originated by the Sponsor, who then disposes of its loans primarily by selling them to third parties and through securitizations. The Sponsor works with the underwriters and the rating agencies to select the pool of mortgage loans and structure the securitization transaction. The Sponsor also services the mortgage loans. On the closing date of the Offerings, the Sponsor conveys the initial mortgage loans and the related mortgage insurance policies to the Depositor, who will in turn convey the initial mortgage loans and the related mortgage insurance policies to the Trustee. The Certificates are backed by the Issuer, and consist of, inter alia, the mortgage loans; collections in respect of principal and interest of the mortgage loans received; and the amounts on deposit in the collection account, including the payment account in which amounts are deposited prior to payment to the certificate holders. On the payment date, the certificate holders receive payments from the Trustee based on the particular tranche purchased, typically, available funds for each distribution date will equal the amount received by the trustee and available in the payment account on that distribution date, including interest which differs depending upon the tranche held. In connection with the LXST Offerings, SASC, LXST and LB prepared and disseminated the Registration Statements and Prospectuses that contained material misstatements of fact and omitted facts necessary to make the facts stated therein not misleading that were reasonably relied upon by plaintiff and the Class to their own detriment.
