UBS AG was sued in New York by DZ Bank AG, Germany’s largest cooperative lender, which claimed fraud over $160.4 million in residential mortgage-backed securities.
DZ Bank, based in Frankfurt, sued today in state Supreme Court in Manhattan seeking damages for claims including fraud, fraudulent inducement and negligent misrepresentation.
“Plaintiffs did not know the true facts regarding defendants’ misrepresentations and omissions in the offering materials, and justifiably relied on those misrepresentations and omissions,” according to court papers. “Defendants’ wrongdoing has led directly to plaintiffs’ damages, which include loss of market value on the securities.”
Christiaan Brakman, a New York-based spokesman for Zurich-based UBS, declined to comment on the lawsuit.
DZ Bank has also sued Barclays Plc, JPMorgan Chase & Co. and HSBC Holdings Plc in the same court this year over residential mortgage-backed securities.
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 case is Deutsche Zentral Genossenschaftsbank AG v. UBS AG, 652575/2012, New York State Supreme Court, New York County (Manhattan).