Deutsche Bank Settles Suit by Loreley Financing Over $440 Million of CDOs
Loreley Financing sued Deutsche Bank (DBK) in New York State Supreme Court in Manhattan in October, accusing the bank of defrauding it into buying CDOs that were “designed to fail.” The litigation was discontinued with prejudice, meaning it can’t be renewed, according to court documents filed yesterday that didn’t disclose terms of the settlement.
Loreley Financing is a group of special-purpose entities based in Jersey, the largest of the Channel Islands, a U.K. dependency known as a tax haven. The entities were formed for long-term investing in CDOs, pools of assets such as mortgage bonds packaged into new securities, Loreley Financing said in the complaint.
Christian Streckert, a spokesman for Frankfurt-based Deutsche Bank, confirmed the settlement and said the bank was pleased to have resolved the dispute. He declined to comment further.
The case is Loreley Financing (Jersey) No. 3 Ltd. v. Deutsche Bank Securities Inc., 652737/2011, New York State Supreme Court, New York County (Manhattan).