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RBS Sued by LBBW Over $71 Million in Mortgage Securities

RBS Sued by LBBW Over $71 Million in Mortgage Securities
Light trails made by passing vehicles are seen in front of the Royal Bank of Scotland Group Plc's headquarters in Gogarburn, Edinburgh. Photographer: Mike Wilkinson/Bloomberg

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).

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