This Thursday, June 18, I’m excited to join an extremely knowledgeable panel hosted by the Federal Bar Association entitled, “The Next Commercial Mortgage-Backed Securities Reckoning: Enforcement, Whistleblowers, and Putback Litigation.” I’d be honored to have any fans of The Subprime Shakeout in attendance, and my readers can get free access by using the code, “CMBSLitigationCLE.” Details and registration can be found here and a description of the event can be found below. I look forward to seeing you there!
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As the last remnants of RMBS litigation work their way through the courts following the Great Financial Crisis (“GFC”), another structured asset class, Commercial Mortgage-Backed Securities (“CMBS”), has suddenly found itself in the crosshairs of investors and litigators. A shift away from brick-and-mortar shopping in retail and a shift towards remote work in office space have combined with an already weak commercial real estate (“CRE”) market to create clear signs of distress in this space. Combine this with revelations of widespread fraud and, in particular, the falsification of borrower operating income in commercial mortgage originations over the last 10 years, and you have the makings of another flood of government investigations and litigation driven by investors and whistleblowers. Only this time, litigators will not be starting essentially from scratch, as they were with novel post-GFC government enforcement actions and residential mortgage repurchase litigation.
Part one of this two-part panel, which will be led by Caleb Hayes-Deats from Lowell & Associates, PLLC and Justin Ellis from Molo Lamken LLP, will examine what actions federal and state enforcement agencies might take in response to potential CMBS fraud. Following the GFC, the DOJ and the SEC sued many of the largest banks in the country, often under theories the government had never pursued before. Panelists will draw on their experience both in and out of government to discuss how the theories enforcers pursued previously could be used against CMBS fraud and what new theories the government might pursue. They will also discuss the proliferation of new whistleblower programs since the GFC and examine how those programs might impact government enforcement. Topics will include: bank fraud, the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA), Federal and State False Claims Acts, and whistleblower programs now offered by the SEC and DOJ.
Part two, which will be led by Isaac Gradman from Perry Johnson Anderson Miller & Moskowitz LLP and Mr. Ellis will leverage the deep experience gained from the front lines of litigating RMBS putback cases over the past two decades. This panel of expert structured finance and distressed investment litigators will discuss how this deep well of analogous cases is already guiding the course of existing CMBS litigation, and providing predictability and efficiencies for the CMBS litigation to come. This program will educate participants on the building blocks and key hurdles to overcome in pleading viable commercial mortgage repurchase claims, from questions of standing and repurchase clause triggers to identifying key representations and warranties, establishing materiality of breaches, and overcoming knowledge qualifiers. Panelists will address recent high-profile cases, including the putback litigation filed against JPMorgan Chase in relation to JPMCC 2019-MFP, while drawing from bellwhether cases from the not-so-distant past, shedding light on what investors and litigators can expect from this new wave of CMBS-related litigation. Topics covered will include: securitization mechanics; comparison of RMBS and CMBS representations and warranties; procedural requirements like sole-remedies clauses and no-action clauses; available remedies and damages calculations; and strategic considerations for uncovering breaches, conducting forensic reunderwriting, and positioning the case for settlement or success at trial.
Join this panel of experts on Thursday, June 18, 2026, to earn CLE credits while learning what regulators, plaintiffs and defendants should expect as this next wave develops!
