Loreley Financing (Jersey) No. 3 v. Wells Fargo Securities, LLC, No. 13-1476 (2d Cir. 2015)
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Plaintiffs, special-purpose investment entities, filed suit in New York state court against defendants, several parties responsible for structuring, offering, and managing collateralized debt obligations (CDOs). Plaintiffs allege, among other things, fraud in connection with disclosures about the construction of three CDOs. After removal to federal court, the district court dismissed the complaint under Rule 12(b)96) and denied plaintiffs' request to replead. The court concluded that the district court erred in aspects of its dismissal of plaintiffs’ fraud
claim and also exceeded the bounds of its discretion in denying plaintiffs leave to amend the complaint as to the remaining claims. Accordingly, the court reversed in part, vacated in part, and remanded for further proceedings.
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