BayernLB Sues Deutsche Bank Over Mortgage-Backed Securities

Bayerische Landesbank, the second- biggest German state-owned lender, sued Deutsche Bank AG (DBK) in New York state court over $810 million of residential mortgage- backed securities.

The suit, filed in state Supreme Court in Manhattan yesterday, accuses Frankfurt-based Deutsche Bank of fraud in connection with the sale of the securities, pools of home loans securitized into bonds that were a central part of the housing bubble that helped send the U.S. into the biggest recession since the 1930s.

“Deutsche Bank originated, purchased, financed and securitized exceptionally high-risk loans into these RMBS, all while internally disparaging the poor quality of these loans and the RMBS they backed as ‘pigs’ and ‘crap,’” lawyers for Munich- based BayernLB said in the lawsuit.

Deutsche Bank believes the claims are without merit and will “vigorously” defend itself, spokesman Duncan King said in a telephone interview. The Frankfurt-based bank is Germany’s biggest lender.

The case is Bayerische Landesbank v. Deutsche Bank AG, 651264/2012, New York state Supreme Court (Manhattan).

To contact the reporter on this story: Chris Dolmetsch in New York at cdolmetsch@bloomberg.net

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

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.