ING Groep NV, the largest Dutch financial-services company, was sued in the U.S. by Dubai’s Mashreq Bank PSC over a $43 million investment loss tied to derivative securities.
Mashreq said in a complaint filed yesterday in Manhattan federal court that it invested conservatively with ING in 2005 and that in 2007 ING wrongly revised the investments to include collateralized debt obligations and other risky instruments.
The allegedly unauthorized revisions were “nothing more than trickery” and the bank “proceeded to pack” Mashreq’s account with hidden “toxic, illiquid ‘structured securities’ based on pools of loans cast off by investment banks,” according to court papers.
Mashreq is seeking a jury trial and damages, including punitive damages, and a return of profits it might have made without the derivative investments.
A spokesman for Amsterdam-based ING, Dana Ripley, said “as a matter of policy, we don’t comment on pending litigation.”
The case is MashreqBank PSC v. ING Groep NV, 13-cv-02318. U.S. District Court, Southern District of New York, (Manhattan).