UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
FEDERAL DEPOSIT INSURANCE CORPORATION
AS RECEIVER FOR GUARANTY BANK
NATURE OF ACTION
1. This is an action for damages against Citibank for its breaches of contractual and
statutory duties under the governing agreements, the New York Streit Act, N.Y. Real Property
Law § 124, et seq. (the “Streit Act”), and under the federal Trust Indenture Act of 1939 (the
“TIA”), 15 U.S.C. § 77aaa, et seq.1 as Trustee for Structured Asset Mortgage Investments II
Trust 2007-AR6 Mortgage Pass-Through Certificates (“SAMI 2007-AR6” or the “Covered
Trust”) securitization trust, which issued residential mortgage-back securities (“RMBS”)
purchased by investors, including Guaranty Bank (“Guaranty”).
2. This action seeks to hold Citibank accountable for abdicating its fundamental
duties as the trustee for certificateholders such as Plaintiff. Under the agreements governing the
Covered Trust, Citibank accepted virtually all of the powers designed to protect the
certificateholders and was compensated for that role. Citibank was essentially Plaintiff’s sole
source of protection against breaches of the governing agreements by the other parties to those
agreements, including the sponsor that sold the loans to the Covered Trust and the servicers
tasked with servicing the mortgage loans. Citibank, however, shirked its duty to exercise its
powers to protect Plaintiff and instead attempted to shorn itself of the responsibilities that
trusteeship imports. While Citibank stood idly for years, the sponsor kept defective mortgage
loans in the Covered Trust, servicers reaped excessive fees for servicing the defaulted loans from
the Covered Trust, and Plaintiff was left to suffer enormous losses.
3. The Covered Trust was sponsored by EMC Mortgage Corporation (“EMC” or
the “Sponsor”) and backed by loans originated by American Home Mortgage Corp.
(“AHM” or the “Originator”).
4. Prior to its failure, Guaranty purchased the RMBS certificate SAMI 2007-
AR6 1A2 with an original face value of $420,046,000 (the “Certificate”)