Lessons Learned from the Wells Fargo RMBS Trustee Litigation

Since the financial crisis of 2007-2008, we have seen a flurry of securities class actions settlements involving residential mortgage-back securities (RMBS). Most recently, FRT filed over 1,600 claims for the Wells Fargo RMBS Trustee Litigation on behalf of some of the largest asset managers and hedge funds in the world.

For context, in the aftermath of the financial crisis, the investment world responded by implementing additional oversight and regulation to the management of RMBS’s, and as a result we have seen fewer settlements related to these securities in recent times. That being said, such cases have not been entirely eliminated. Even today, in the event of alleged misconduct by the trustees overseeing RMBS’s, substantial settlements can still arise.

Most importantly, settlements relating to RMBS’s involve additional complexity in terms of successfully producing and filing acceptable claims. That’s why firms are turning to companies like FRT to assist in the recovery process. Here are a couple lessons learned that may be relevant for future RMBS cases:


  • Investors were overwhelmed with the volume of securities included in the case: There were over 4,500 unique securities that were relevant to this settlement, each of which was associated with multiple security identifiers (e.g. CUSIPs, ISINs, and SEDOLs).
    • Unlike most securities litigation where the class includes holders of relatively few equities or debt instruments, RMBS cases tend to include hundreds or even thousands of securities. FRT developed scalable, specialized software designed to identify eligibility across many securities to efficiently assemble claims and confidently know we haven’t missed any transactions or pertinent information for our clients.
  • Data for the claim was not standard: Over the past several years, claims administrators have refined the specifications defining what they need from each claimant to determine the value of the claims they receive for RMBS cases. However, there is still some variability in terms of how historical transactions in residential mortgage-backed securities need to be presented to claims administrators to submit a claim that will be understood and accepted.
    • FRT is a technology company and we’re uniquely positioned to query for (or assist clients in querying) the transactions required to file for the Wells Fargo Trustee Litigation (or any RMBS cases). For the Wells Fargo Trustee Litigation, FRT leveraged previously-developed proprietary software to handle the conversions between original and current face values, enabling easy and successful claim filing.

We complement our technology with a large, experienced operational team, trained to understand the necessary cash flows patterns from residential mortgage-backed securities, and capable of identifying and rectifying gaps. Members of this team are available for consultation with clients about best-practices for obtaining data, and possess the know-how required to successfully file RMBS claims. 

It is evident that RMBS settlements present claim filing challenges as it relates to identifying eligibility and maximizing your recovery, however it can be done. Contact FRT at learnmore@frtservices.com to leverage our experience and technology to help you through the process.

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To learn more about how FRT can help your firm maximize recoveries in shareholder class action settlements, contact us at learnmore@frtservices.com.

About FRT


Founded in 2008, Financial Recovery Technologies (FRT) is the leading technology-based services firm that helps the investment community identify eligibility, file claims and collect funds made available in securities and other class action settlements. Offering the most comprehensive range of claim filing and monitoring services available, we provide best-in-class eligibility analysis, disbursement auditing and client reporting, and deliver the highest level of accuracy, accountability and transparency available. For more information, go to www.frtservices.com.

This communication and the content found by following any link herein are being provided to you by Financial Recovery Technologies (FRT) for informational purposes only and does not constitute advice. All material presented herein is believed to be reliable but FRT makes no representation or warranty with respect to this communication or such content and expressly disclaims any implied warranty under law. Opinions expressed in this communication may change without prior notice. Firms should always seek legal and financial advice specific to their unique situation and objectives.