According to Bloomberg Businessweek, Deutsche Bank has recently become the new face of misrepresentation of mortgage securities in the court of law. In New York, Deustche Bank AG's Ace Securities was sued for fraud by Phoenix Light SF Ltd. yesterday regarding their alleged misrepresentation of $512 million worth of mortgage backed securities.
The case revolves around misrepresentation of underwriting guidelines which were used to issue the mortgage loans. Phoenix Light is seeking $300 million in damages for securities bought under alleged pretense notions of quality which they then later sold. Phoenix Light is accusing Ace Securities of being aware of the problems with their securities but continuing to include them in the offerings being sold anyways.
Spokespeople from Deutsche Bank claim the accusations are incorrect and they will be fighting the suit.
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