January 9, 2014
A federal judge has ordered UBS to hand over a “due diligence” mortgage analysis that the Swiss bank commissioned after investors demanded it repurchase allegedly defective loans that were packaged into trusts and sold as securities.
U.S. Magistrate Judge James C. Francis IV of the Southern District of New York rejected UBS’ argument that the analysis documents were protected by the attorney-work-product privilege. He said securitization trustee U.S. Bank is entitled to examine them in connection with its breach-of-contract suit on behalf the investors.
The privilege, codified as Fed.R.Civ.P. 26(b)(3)(A), protects from discovery by opposing counsel all documents and materials prepared in anticipation of litigation.
The judge said the documents, which include spreadsheets and draft letters, appeared to have been created in the normal course of business by a due diligence firm while reviewing whether the loans should be repurchased in accordance with the agreements governing the transfer and securitization of the mortgages.