Investors are suing the bank for more than $3 billion in losses from trusts backed by shoddy mortgages
A federal judge has ruled that investors seeking to sue Deutsche Bank over toxic mortgage trusts won’t be granted class status, according to Reuters.
U.S. District Judge Alison Nathan said Royal Park Investments was unable to justify its claims as a class-action suit, but kept her ruling under seal, as “it may contain material that Royal Park believes should not be made public.”
In behalf of investors, Royal Park claimed the bank failed to monitor “10 trusts backed by toxic residential mortgages,” which resulted in a loss of $3.1 billion.
The trusts date from 2006 and 2007 – just before the global financial meltdown. Royal Park claimed the bank, which acted as bond trustee for the trusts, ignored “widespread” deficiencies in the underwriting and servicing of the mortgages backing the trusts. It also accused Deutsche Bank of failing to require that lenders buy back defective loans.
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