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(Corrects gender of spokesman in fifth paragraph of story published yesterday.)
Jan. 31 (Bloomberg) -- DZ Bank AG sued JPMorgan Chase & Co. and HSBC Holdings Plc, accusing the banks of making false and misleading statements in connection with the sale of residential mortgage-backed securities.
DZ Bank, Germany’s largest cooperative lender, sued JPMorgan in New York State Supreme Court in Manhattan yesterday, saying it bought about $85 million of the securities based on flawed offering materials. DZ Bank filed a similar suit today against HSBC, Europe’s biggest bank, in the same court today, over $122 million worth of the investments.
“Plaintiff did not know the true facts regarding defendants’ misrepresentations and omissions in the offering materials, and justifiably relied on those misrepresentations and omissions,” Frankfurt-based DZ Bank said in court documents.
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.
Tasha Pelio, a spokeswoman for New York-based JPMorgan, declined to comment on DZ Bank’s lawsuit. Neil Brazil, a spokesman for London-based HSBC, said the company doesn’t comment on pending litigation.
The JPMorgan case is Deutsche Zentral-Genossenschaftsbank AG v. JPMorgan Chase & Co, 650293/2012, New York State Supreme Court (Manhattan). The HSBC case is Deutsche Zentral- Genossenschaftsbank AG v. HSBC North America Holdings Inc., 650303/2012, New York State Supreme Court (Manhattan).
--Editors: Stephen Farr, Peter Blumberg
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