Bank Says Wachovia Misstated Value Of $1.5B RE-Backed CDO

Law360, New York (October 2, 2012, 5:25 PM EDT) -- The Luxembourg subsidiary of a German bank alleged Monday in New York federal court that Wachovia Capital Markets LLC fraudulently misstated the value of a $1.5 billion real estate-backed collateralized debt obligation issuance in 2006.

LBBW Luxemburg SA, owned by German lender Landesbank Baden-Wurttemberg, contends Wachovia misled investors about the strength of the CDO's capital structure after it could not sell the preference shares for the CDO at anywhere near the stated par liquidation value.

Wachovia, acquired by Wells Fargo Bank NA in 2008, bought $5.5...
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