HSH Nordbank AG, et al. v. Barclays Bank PLC, et al.

A residential mortgage-backed securities ("RMBS") case which involves Barclays Bank PLC and other affiliates’ alleged knowledge and fraudulent misrepresentation concerning widespread failure to properly and timely assign mortgages and promissory notes to the RMBS trusts in which HSH Nordbank AG invested.

On April 2, 2012, Labaton Sucharow filed a Consolidated Complaint against Barclays Bank PLC and various affiliates (collectively, "Barclays") on behalf of investors in certain residential mortgage-backed securities ("RMBS") issued and sold by Barclays in HSH Nordbank AG, et al. v. Barclays Bank PLC, et al., Index No. 652678/2011 (Sup. Ct. New York Co.) (Schweitzer, J.).

Plaintiffs HSH Nordbank AG, HSH Nordbank AG, Luxembourg Branch, HSH Nordbank Securities S.A., and Carrera Capital Finance Limited (collectively, "plaintiffs") allege that these securities were not, in fact, "mortgage-backed" because the mortgages that were supposed to have been assigned to the RMBS trusts for the benefit of investors were never properly assigned. Plaintiffs allege that Barclays knew that these mortgages were not assigned, and yet fraudulently misrepresented to investors that they were assigned, or alternatively, that there was a material mutual mistake warranting rescission.

Additionally, based on extensive investigation into a large sample of theunderlying loans, plaintiffs have discovered that the credit quality of those loans was far worse than what Barclays represented in the offering materials. Specifically, the Consolidated Complaint alleges that the reported loan to value ratios, owner occupancy rates, and adherance to underwriting guidelines were knowingly overstated, and that Barclays hid the results of its own due diligence, which revealed the inferior quality of the loan pools.

Plaintiffs are seeking rescission of the $46 Million purchase price they paid for the securities, plus punitive damages. A copy of the Consolidated Complaint may be viewed by clicking the link to the right.