Banks face law suit over £1.6bn sub-prime losses
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HSBC, Barclays and Royal Bank of Scotland and a number of Wall Street banks are being targeted by a US law suit which accuses them of misselling £1.6bn of sub-prime loans.
Boston-based fund, Cambridge Place Investment, is claiming the US arms of the banks sold mortgage-backed securites using “untrue statements” and by misvaluing the loans, The Daily Telegraph reports.
The other banks targeted by the suit include JP Morgan, Citigroup, Credit Suisse, Deutsche Bank, Merrill Lynch, UBS, Goldman Sachs and Morgan Stanley.
Cambridge Place claims the banks failed to do proper due diligence on the securities and that, as the banks had representatives working with the lenders and provided them with credit, they were “complicit in creating an environment of improper lending practices”.
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