RBS Sued by LBBW Over $71 Million in Mortgage Securities

Royal Bank of Scotland Group Plc was sued in New York by Landesbank Baden-Wuerttemberg over $71 million in mortgage-backed securities.

Landesbank Baden-Wuerttemberg said the offering materials for the sale of the securities contained “misrepresentations and omissions” about the characteristics of the mortgages, according to the complaint filed in New York state court today.

The defendants, which include RBS Securities, obtained mortgage loans from the banks that issued them and bundled them into securities. Landesbank Baden-Wuerttemberg bought the securities, which have declined in value or were sold at a loss, according to the complaint.

“Each of the defendants knew, or at a minimum was negligent in not knowing, that its representations and omissions were false and/or misleading,” Landesbank Baden-Wuerttemberg said in the complaint.

Landesbank Baden-Wuerttemberg, based in Stuttgart, seeks at least $71 million in damages.

Pholida Phengsomphone, a spokeswoman for Edinburgh-based Royal Bank of Scotland, declined to comment.

The case is Landesbank Baden-Wuerttemberg v. Royal Bank of Scotland, 650482-2012, Supreme Court of the State of New York (Manhattan).

To contact the reporter on this story: Don Jeffrey in New York State Supreme court at djeffrey1@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.