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IPE special report May 2018

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ABP settles last remaining mortgage-backed securities lawsuits

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The €293bn Dutch civil service scheme ABP has reached a settlement with Credit Suisse and Morgan Stanley over the alleged mis-selling of residential mortgage-backed securities (RMBS).

ABP had argued that both banks knowingly provided the pension fund with false and misleading information.

According to its initial filing, it claimed it purchased RMBS in 2006-07 – “based on material misrepresentation and omissions” – that were far riskier than had been represented.

The settlements mean ABP has now wrapped up all pending legal cases against banks stemming from disputed mortgage-backed securities.

To date, it has settled with Deutsche Bank, JPMorgan Chase and mortgage provider Countrywide in similar cases, as well as Goldman Sachs, which with it reached an agreement in April. 

At the time, Henk Brouwer, chairman at ABP, said: “We are pleased to see these cases being concluded satisfactorily one by one.

“We have full confidence all will be completed in due course, as evidence that all parties involved are looking to the future, leaving past grievances and practices behind them.”

The pension fund declined to put a figure on the Goldman Sachs settlement, but a spokesman stressed that it had been “good by all standards”.

Respecting the Credit Suisse and Morgan Stanley cases, ABP said it was “satisfied” with the outcome of the settlements but declined to specify the amounts involved, explaining that this had been one of the conditions agreed with the banks.

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