If sophisticated investors, such as banks, are allowed to sue along with less savvy investors, then it might cost major financial institutions more to resolve claims regarding their alleged roles in the mortgage-backed securities market. However, a court ruling says class status is not allowed because some of the investors are too sophisticated. "It is possible to be both an alleged perpetrator and victim at the same time," said Jacob Frenkel, a former Securities and Exchange Commission lawyer. "It's unprecedented that you have the most sophisticated institutions as victims, to be in a position where their losses are so great that they have sued."

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