In Basis PAC-Rim Opportunity Fund (Master) v TCW Asset Mgt. Co., the First Department holds loss causation lacking in a residential mortgage backed securities fraud case where the investment tanked at  the same time as the housing market. The Court clarified that it is not impossible to show fraud in the event of a market collapse, but the issue of loss causation must specifically be addressed on summary judgment.

The First Department’s order can be found here.