Stichting Pensioenfonds ABP

Foreign Pension Fund Sues Deutsche Bank Over Mortgage-Backed Securities

On September 7, 2011, Stichting Pensioenfonds ABP, a pension fund based in the Netherlands, sued Deutsche Bank and certain of its officers in New York state court, alleging the bank committed fraud by misrepresenting the quality of the loans underlying its mortgage-backed securities. In support of its claims that Deutsche Bank knew about the poor quality of the loans and the loan originators’ noncompliance with underwriting guidelines, the fund cites the Financial Crisis Inquiry Commission and the Levin Report for the proposition that Deutsche Bank entered into credit default swaps to short the securities. The complaint seeks monetary damages and rescission based on claims for common law fraud, aiding and abetting, and negligent misrepresentation. Complaint.

Los Angeles Federal Court Has Jurisdiction Over RMBS Suit

On December 29, 2010, the Honorable Mariana R. Pfaelzer denied a motion by Stichting Pensioenfonds ABP (“Plaintiff”) to remand its claims against Countrywide and others to state court. Judge Pfaelzer concluded that the case was sufficiently related to a bankruptcy case to confer federal jurisdiction in light of contractual indemnification obligations of a bankrupt originator, American Home Mortgage Corp., to Countrywide. The Court also concluded that there were no equitable grounds meriting remand. Decision.