German bank Bayerische Landesbank (“BayernLB”) filed suit against Merrill Lynch on May 2 in New York Supreme Court, claiming that Merrill Lynch knowingly made misrepresentations in its offering materials relating to $324 million in residential mortgage-backed securities. The complaint alleges that the offering materials falsely claimed that the mortgage loans had been underwritten to strict underwriting standards, and that Merrill Lynch misrepresented that it had conducted due diligence on the underlying loans before purchasing and securitizing them. BayernLB asserts claims for common law fraud, fraudulent inducement, and aiding and abetting fraudulent inducement, and seeks compensatory, rescissory, and punitive damages. Complaint.
BayernLB
German Bank Sues JP Morgan Over $2.1 Billion in RMBS
On November 21, 2011, German bank Bayerische Landesbank (“BayernLB”) filed a complaint in New York state court against JPMorgan Chase & Co. and several related entities, including several former Washington Mutual and Bear Stearns entities, seeking approximately $2.1 billion in damages in connection with its purchase of certificates in 57 RMBS offerings. BayernLB asserts causes of action for common law fraud, fraudulent inducement, aiding and abetting fraud, negligent misrepresentation, and successor and vicarious liability, based on allegations that JPMorgan concealed the poor quality of loans underlying those securities and provided misinformation to credit rating agencies. Complaint.