Dutch Pension Fund and Ace Securities End Mortgage SuitChris Dolmetsch
Stichting Pensioenfonds ABP, the biggest Dutch retirement fund, and Deutsche Bank AG’s Ace Securities Co. ended a lawsuit over sales of residential mortgage-backed securities.
ABP, based in Heerlen, Netherlands, sued Deutsche Bank, Ace and four other bank affiliates in New York State Supreme Court in Manhattan in September 2011, saying it bought the securities while relying on false and misleading statements.
The two sides agreed to end the lawsuit with prejudice, meaning it can’t be refiled, according to a court filing dated Feb. 4. Geoffrey Jarvis, an attorney for ABP with Grant & Eisenhofer PA, and Moses Silverman, a lawyer for Ace with Paul, Weiss, Rifkind, Wharton & Garrison LLP, didn’t immediately return telephone messages seeking comment on whether a settlement had been reached.
Justice Jeffrey Oing in July threw out claims of aiding and abetting fraud and negligent misrepresentation, while ordering Ace to face claims of common-law fraud and fraudulent inducement. Oing dismissed Deutsche Bank, Deutsche Bank Home Lending LLC and DB Structured Products Inc. from the case, leaving Ace, Deutsche Bank Securities and another affiliate as defendants.
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.
ABP has filed similar lawsuits in the same court against banks including Morgan Stanley, Credit Suisse Group AG and Goldman Sachs Group Inc. The fund settled a lawsuit against JPMorgan Chase & Co. in December.
The case is Stichting Pensioenfonds ABP v. Ace Securities Corp., 652460/2011, New York Supreme Court (Manhattan).