Utilizing the Civil War-era False Claims Act ("FCA"), the U.S. Attorney for the Southern District of New York filed suit against Deutsche Bank earlier this month, seeking more than $1.1 billion over claims that its subsidiary, MortgageIT Inc., recklessly underwrote thousands of bad loans that were federally insured. Departing from the questioning of certifications of compliance in connection with individual loans, the government is attacking the way the bank ran its lending program, which would call into question all of the bank's FHA loans that default.

The suit is the brainchild of the new Financial Fraud Task Force in the SDNY Civil Division. At his press conference announcing the suit, the U.S. Attorney noted, "it would not be a fantastical stretch to think that we're looking at other financial institutions as well." Since then, State Attorneys General from New York to California have announced plans to utilize statutes, including state law counterparts to the FCA, to regulate financial services institutions.

To assist you in working through the issues presented by this new governmental strategy, Reed Smith litigators with FCA and consumer lending experience will conduct a brief teleseminar exploring the implications of this regulation-by-litigation approach and related potential insurance coverage issues, and will outline strategic best practices.

Our presenters, including Wendy Schwartz, Mark Melodia, Tyree Jones, Courtney Horrigan and Diane Bettino, have experience in government investigations, FCA claims, class action defense, mortgage litigation and insurance recovery, all of which are implicated in this new matter.