Deutsche Hit With Fraud Claims Over $1B CLO Deal

Law360, New York (September 28, 2012, 4:10 PM EDT) -- International private equity firm Arco Capital Corp. Ltd. hit Deutsche Bank AG with securities fraud and breach of contract claims in New York federal court on Thursday over alleged misconduct related to a $1 billion collateralized loan obligation that cost noteholders millions of dollars.

In 2006, Deutsche Bank created a special purpose entity to issue a credit default swap with the bank related to a portfolio of loans worth about $500 million, but soon "upsized" the portfolio to $1 billion, allegedly filling it with poorly underwritten loans...
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