Wednesday, March 17, 2010

Lawsuit Time, Part Two

Levin's will be the fun one.

But this one has almost as much portent.

FHLB Seattle has gone and done what no criminal prosecutor has had the balls to do - it has sued nine securities dealers. Among them are Credit Suisse, Deutsche Bank, JP Morgan and Bank of America.

The bank’s complaints allege that the dealers made untrue or misleading statements about the characteristics of the mortgage loans underlying the securities,” according to the statement.

The dealers made false statements or omitted important information about the loans that backed the securities they sold, the bank alleged in its complaints. The bank claims the dealers failed to disclose that appraisals were biased upward on properties that secured mortgage loans, that underwriting guidelines were ignored by originators and that loan to property value ratios were exaggerated.


HT: Ticker

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