Deutsche Bank, Others Sued Over $500M In 'Crap' CDOs

Law360, New York (October 6, 2011, 2:54 PM EDT) -- Deutsche Bank AG and Merrill Lynch & Co. were sued in New York state court on Wednesday, accused of duping investment firm Loreley Financing Ltd. into buying $440 million and $92 million worth of collateralized debt obligations, respectively, that bankers allegedly called "crap" and "pigs" behind closed doors.

Loreley, which comprises a group of special purpose long-term investing entities, and its subsidiaries claim Deutsche Bank knew the subprime mortgage-backed securities packaged in the CDOs it sold were destined to default and tank. But it sold them...
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