GLOBAL - The €242bn Dutch pension fund ABP has confirmed it has filed a complaint against Deutsche Bank for fraud relating to "misleading statements" made regarding residential mortgage-backed securities.
ABP's complaint is based on "material misrepresentations and omissions" and "false and misleading statements" allegedly made by Deutsche Bank and "related parties", including securities brokerage ACE Securities Corp, as well as several Deutsche Bank subsidiaries, a spokesman for the fund confirmed to IPE.
The complaint was filed by ABP and its lawyers at Grant & Eisenhofer at the Supreme Court of the State of New York for fraud, fraudulent inducement, aiding and abetting fraud and negligent misrepresentation, he added.
According to ABP, the residential mortgage-backed securities (RMBS) purchased by the pension fund were "far riskier than represented, backed by mortgage loans worth significantly less than represented, that had been made to borrowers who were much less creditworthy than had been represented".
In the complaint, it was noted that the offering document for the RMBS "contained material misstatements and omitted material information".
ABP claimed Deutsche Bank "knew of the wholesale and systematic abandonment of underwriting guidelines by both its own affiliated originators as well as various third party originators".
Allegedly, this happened because the originators were "faced with Deutsche's demands that as many loans as possible be originated so they could be packaged and sold to investors".
The Dutch pension fund filed a similar complaint against US mortgage lender Countrywide earlier this year.
However, the case was dismissed in mid-August as the purchase fell outside the statute of response - set at five years.
In the complaint against Deutsche Bank, ABP listed certificates bought in 2006 and 2007.
It added it had incurred "substantial losses" in market value, due to the "poor quality" of the collateral underlying the certificates, but no further details were provided.
Deutsche Bank was unavailable for comment.