Justice Friedman recently rejected the novel argument that a directing certificateholder is in effect the plaintiff in an action and for that reason a suit so directed fails for lack of standing under the PSA’s no action clause. She explained:
Nataxis cites no authority in support of its contention that a certificateholder, or other trust beneficiary, may be considered the “effective” plaintiff in an action brought by a trust representative. Put another way, Nataxis fails to show how, in the event Computershare demonstrates that it was a duly appointed trust representative, and therefore authorized to prosecute this action, Computershare can be deprived of this status–i.e. its status as a plaintiff with standing–by virtue of communications with a directing certificateholder as to the conduct of the litigation. This contention not only is unsupported by any legal authority, but also ignores that a trustee or securities administrator acts on behalf of the trust and its beneficiaries and would reasonably be expected to communicate with them in order to insure the protection of their interests.