Wells Fargo Faces $163M CDO Fraud Suit

Law360, New York (November 2, 2011, 1:59 PM EDT) -- Loreley Financing Ltd. on Tuesday sued Wells Fargo & Co.'s securities and capital markets division over $163.3 million in collateralized debt obligations in the mortgage investment group's latest sting on New York's banking giants for allegedly knowingly selling doomed securities.

Loreley, a group of investment entities based on the Channel Island of Jersey, filed a summons in New York court claiming Wells Fargo Securities LLC knew the mortgage-backed securities packaged in the CDOs it sold were destined to default, but sold them anyway.

The bank materially...
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