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OVERVIEW
CMRA was retained by the Carlyle Capital Corporation Ltd’s Directors (CCC). CCC was created to invest in floating rate CMOs collateralized by Agency MBS and funded primarily with repo. CCC was chartered in Guernsey. At the start of the financial crisis of 2008, haircuts on repo increased and liquidity in the floating rate CMO market was reduced. CCC ultimately failed.
The matter was focused on whether the actions of the management of CCC were prudent in the circumstances.
Peter Niculescu could provide precisely relevant testimony due to his role as head of Capital Markets at Fannie Mae at the time in question, with responsibilities both to invest in MBS and to sponsor the liquidity of Fannie Mae MBS including floating rate CMOs.
The expert analysis and Dr. Niculescu’s testimony was extensively cited in a 524-page judgement dismissing all 187 claims, with almost $2 billion in alleged damages at stake. Dr. Niculescu’s reasoning was found cogent and justified and his knowledge and experience were ultimately credible.