ABP ends MBS suit with Deutsche Bank unit
By Bloomberg | February 5, 2013 5:57 pm
Stichting Pensioenfonds ABP and Deutsche Bank's Ace Securities Co. ended a lawsuit over sales of residential mortgage-backed securities.
ABP, based in Heerlen, Netherlands, sued Deutsche Bank, Ace and four other bank affiliates in New York State Supreme Court in September 2011, saying it bought the securities while relying on false and misleading statements.
The two sides agreed to end the lawsuit with prejudice, meaning it can't be refiled, according to a court filing dated Feb. 4. Geoffrey Jarvis, an attorney for ABP with Grant & Eisenhofer, and Moses Silverman, a lawyer for Ace with Paul, Weiss, Rifkind, Wharton & Garrison, didn't immediately return telephone messages seeking comment on whether a settlement had been reached.
New York Supreme Court Judge Jeffrey Oing in July threw out claims of aiding and abetting fraud and negligent misrepresentation, while ordering Ace to face claims of common-law fraud and fraudulent inducement. Mr. Oing dismissed Deutsche Bank, Deutsche Bank Home Lending and DB Structured Products Inc. from the case, leaving Ace, Deutsche Bank Securities and another affiliate as defendants.
Pools of home loans securitized into bonds were a central part of the housing bubble that helped send the U.S. into the biggest recession since the 1930s. The housing market collapsed, and the crisis swept up lenders and investment banks as the market for the securities evaporated.
The €274 billion ($356 billion) ABP has filed similar lawsuits in the same court against banks including Morgan Stanley (MS), Credit Suisse Group and Goldman Sachs Group (GS). The fund settled a lawsuit against J.P. Morgan Chase & Co. in December.