That is because the “control person” defense under these laws is substantively identical to the reasonable care defense under Section 12. Compare 15 U.S.C. § 77l(a)(2) (requiring Section 12 defendant to show “that he did not know, and in the exercise of reasonable care could not have known, of such untruth or omission”), with D.C. Code § 31-5606.05(c) (requiring control person defendant to show “that he or she did not know, and in exercise of reasonable care could not have known, of the existence of the facts by reason of which the liability is alleged to exist”), and Va. Code Ann. § 13.1-522(C) (same). 65 CONCLUSION For the reasons set forth above, FHFA respectfully requests that the Court grant its motion for partial summary judgment.

Bank, 551 F.2d at 527 (underwriter “failed to exercise reasonable professional care in assembling and evaluating the financial data … no matter how honestly but mistakenly [underwriter’s belief in the accuracy of the financial data was] held”); Univ. Hill Found., 422 F. Supp. at 902 (defendant, treated as underwriter under Section 11, could not meet Section 12 “reasonable care” defense where its “exclusive reliance on publicly available data and the unverified representations of management [was] inadequate to meet [defendant’s] obligations to 35 Both the D.C. and the Virginia Blue Sky Acts contain language that is identical to Section 12’s “reasonable care” defense, see D.C. Code § 31-5606.05(a)(1)(B); Va. Code Ann. § 13.1-522(A)(ii), and this Court has held that, where the statutory language in the two Blue Sky Acts is identical to Section 12, “the D.C. and Virginia securities laws are generally interpreted in accordance,” FHFA v. Bank of America Corp., 2012 WL 6592251, at *7 n.8 (S.D.N.Y. Dec. 18, 2012). See also FHFA v. HSBC N. Am. Holdings Inc., --- F. Supp. 2d ----, 2013 WL 6588249, at *2, *4 (S.D.N.Y. Dec.

(collecting cases)); Dunn, 369 F.3d at 428-29 (reasoning that “judicial constructions of section 12(2) of the federal Securities Act of 1933” are “instructive” because the statute is “substantially identical” to the Virginia Blue Sky law). The knowledge language of the Virginia Blue Sky Act is identical to that of Section 12 in this respect, see Va. Code Ann. § 13.1-522(A)(ii) (“the purchaser not knowing of such untruth or omission”); 15 U.S.C. § 77l(a)(2) (same), and the D.C. Blue Sky Act is nearly so, see D.C. Code § 31-5606.05(a)(1)(B) (“the buyer does not know of the untruth or omission”). 10 In short, as this Court previously concluded, to avoid liability under the Securities Act or the Virginia or D.C. Blue Sky laws, Defendants must show “that the GSEs had actual knowledge that the specific representations in the prospectus supplements issued by the defendants were false.”

Plaintiff also brings “control person” allegations against defendants Bank of America Corporation, Bank of America, National Association, and the individual defendants under the 1933 Act and the D.C. and Virginia securities laws. FAC ¶¶ 223–236, 255–268, 287–300; 15 U.S.C. § 77o(a) (2006); D.C. Code § 31-5606.05(c); Va. Code Ann. § 13.1-522(C).35 To state a “control” liability claim, a plaintiff “must allege (1) a primary violation of the Securities Act and (2) ‘control’ by the defendant.” N.J. Carpenters Health Fund v. Residential Capital, LLC, No.

SUF ¶ 2. A. Defendants’ Misrepresentations In the Offering Materials, Defendants made specific representations about the Certificates, and the Mortgage Loans in the SLGs supporting the 26 Certificates, including that: (1) the Mortgage Loans comprising the SLGs were generally underwritten in accordance with applicable underwriting guidelines (SUF ¶¶ 7, 11, 16, 20); (2) the Mortgage Loans had specified loan-to-value (“LTV”) and combined-loan-to-value (“CLTV”) ratios (SUF ¶¶ 8, 11, 17, 20); 2 FHFA’s Virginia Securities Act claims are subject to a two-year statute of limitations without a discovery period, Va. Code § 13.1-522(D), and thus are not at issue in this motion. Case 1:11-cv-06201-DLC Document 838 Filed 10/03/14 Page 9 of 32 4 (3) a specified percentage of those loans were secured by owner-occupied residences (SUF ¶¶ 9, 11, 18, 20); and (4) the Certificates deserved investment-grade credit ratings (SUF ¶¶ 10, 11, 19, 20).

Because FHFA’s federal securities and state blue sky claims were brought on September 2, 2011, more than three years after the dates that all of the Goldman Sachs securitizations were issued and purchased by the GSEs, see GS SMF at ¶ 1 table 1, they are barred by the applicable two- and three-year federal and state statutes of repose. See 15 U.S.C. § Case 1:11-cv-06198-DLC Document 743 Filed 06/20/14 Page 5 of 7 -5- 77m (three-year statute of repose); Va. Code Ann. § 13.1-522(D) (two-year statute of repose); D.C. Code. § 31-5606.05(f) (three-year statute of repose); Nomura Br.

o ensure that [a] transaction was properly accounted for in the Registration Statement, [the defendants] instead actively facilitated its improper accounting treatment”). III. MLPFS AND MLMI DID NOT EXERCISE REASONABLE CARE AS A MATTER OF LAW Likewise, summary judgment is appropriate on MLMI and MLPFS’s “reasonable care” defense under Section 12 of the Securities Act or under the Virginia and D.C. Blue Sky laws, because neither defendant ever analyzed the loans in each Securitization’s actual SLGs, reviewed the statements in the Prospectus Supplements, or did anything more than rely on the untrustworthy assurances of originators and third-party due diligence firms.42 While Section 12’s “reasonable care” defense is less “exacting” than Section 11’s “reasonable 42 Both the D.C. and the Virginia Blue Sky Acts contain language that is identical to Section 12’s “reasonable care” defense, see D.C. Code § 31-5606.05(a)(1)(B); Va. Code Ann. § 13.1-522(A), and this Court has held that, where the statutory language in the two Blue Sky Acts is identical to Section 12, “the D.C. and Virginia securities laws are generally interpreted in accordance,” FHFA v. Bank of America Corp., 2012 WL 6592251, at *7 n.8 (S.D.N.Y. Dec. 18, 2012).

See D.C. Code § 31- 5608.01 (D.C. Blue Sky Act applies “to a person who sells, or offers to sell, when an offer to sell is made in the District or an offer to purchase is made and accepted in the District”); Lintz v. Carey Manor Ltd., 613 F. Supp. 543, 550 (W.D. Va. 1985) (Va. Code § 13.1-522 “is intended to govern those who sell securities within the state even though incorporated elsewhere and never entering into the state”). Following the above overwhelming authority, these claims are properly asserted and not subject to choice of law analysis.

B at 1, Letter from FHFA to Freddie Mac (Sept. 4, 2008).) 4 Specifically, Plaintiff's claims for violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 (the "Securities Act"), 15 U.S.C. §§ 77k, l(a)(2), o, and Virginia and D.C. statutory law are time-barred under the Securities Act's and D.C. Securities Act's three-year statutes of repose, 15 U.S.C. § 77m; D.C. Code § 31-5606.05(f) (2009), and the Virginia Securities Act's two-year statute of repose, Va. Code Ann. § 13.1-522(D) (West 2007). Case 1:11-cv-05201-DLC Document 25 Filed 12/02/11 Page 14 of 62 3 Act ("FIRREA") – on which Section 12 of HERA was modeled – at least one federal court has explicitly held that the very same statutory language at issue here does not modify "substantive statutes of repose."

Whether Defendants made “untrue statement[s]” regarding the underwriting guideline-compliance, LTV ratios, and occupancy status of the loans underlying the Certificates cannot be proven or disproven with GSE-specific evidence. 15 U.S.C. § 77l(a)(2); D.C. Code § 31-5606.05(a)(1)(B); Va. Code § 13.1-522(A)(ii). The Court ruled the GSEs did not have “access to the files or data that would give them knowledge that those detailed representations 1 Appendix A to this letter identifies specific categories of documents FHFA asks the Court to exclude, which were taken from Nomura’s and RBS’s exhibit list.