Barclays Sued by Landesbank, Sealink Over Mortgage Bonds
Barclays Plc (BARC), the U.K.’s second-largest bank, was sued by Landesbank Baden-Wuerttemberg and Sealink Funding Ltd. in separate cases over losses in the sale of mortgage-backed securities valued at a total of $808.7 million.
LBBW said Barclays made misrepresentations in the offering materials for securities valued at $204.6 million. Sealink Funding said Barclays made omissions in materials related to securities valued at $604.1 million. Both filings were in New York state Supreme Court and dated June 1.
Banks acquire mortgage loans from the issuers and bundle them into securities that are sold to investors and companies such as Sealink.
The lawsuits, signed by lawyer Joel Bernstein, both say the offerings “contained material representations and omissions regarding the legal validity of assignments of mortgage loans to trusts formed to hold the pooled loans and to collect interest and principal payments due on the loans.”
Barclays declines to comment, said spokeswoman Kristin Friel.
Sealink Funding, an Ireland-based investment firm, took legal action in February against banks including Royal Bank of Scotland and Credit Suisse over $948.8 million in residential mortgage-backed securities. In March, LBBW, a German bank, sued Bank of America Corp. over $455 million in mortgage securities.
The cases are Landesbank v. Barclays, 651908/2012, and Sealink v. Barclays, 651901/2012, New York state Supreme Court, New York County (Manhattan).
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