A US lawsuit was filed against the German Deutsche Bank. In the case, the lawsuit is seeking $3.1 billion of investor's losses concerning the bank's failure to monitor 10 trust under a toxic residential mortgage.
According to the trustees, the Deutsche Bank National Trust Co. ignored the widespread deficiencies on how the underlying loans were managed and serviced, it also failed to necessitate the buyback of bad loans. In Manhattan, US district Judge Alison Nathan said that the Belgium Royal Park Investment may continue to track their claim as reported by Reuters.
The Royal Park in behalf of its investors are seeking a class action suit, they claimed that the Deutsche Bank broke its fiduciary duties. The bank feared that it might lose business or start a retribution over the German banks own loan problems. They alleged the bank of large economic loss and default rates. The Royal Park said that their own securities had become completely worthless from 2006 up to 2007.
According to Zero Hedge, back in April 2013, Deutsche Bank had the biggest derivative exposure in the world. Some said that people should not look on the derivative exposure but the net. On the other hand, experts saw that the net will immediately become gross when one of the counterparties in the collateral fail.
The bank cannot discount the fact that impaired assets had finally gone down through the income statement leading to a further loss. The bank had already loss 7 billion euros surpassing their depth during the Global Financial Crisis.
In the recent years, many investors have sued trustees as well as lenders and underwriters for losses on badly underwritten mortgages. It is the duty of the bond issuers to appoint trustees to ensure payments to funnel back to investors, they handle back-office work after securities are sold. Oksana Poltavets, Deutsche Bank spokeswoman is yet to issue a comment regarding the issue.
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