you're reading...
Australian issues, Economics, Governance, Justice & NESARA legal issues, Media, Relations

Wells Fargo Sued By German Agency For $160 Million In CDO Losses

NEW YORK (Reuters) – Wells Fargo Bank, N.A. was sued Wednesday by a German government agency that accused it of mismanaging a collateralized debt obligation, resulting in more than $160 million in losses.

Wells Fargo and Collineo Asset Management GMBH, a German financial services company, allowed investments of overly risky assets not permitted under the contracts governing House of Europe Funding I Ltd, a Cayman Islands CDO issuer, according to the lawsuit filed in Manhattan federal court.

The German agency, Erste Abwicklungsanstalt, and the CDO itself both sued Wells as trustee and Collineo as asset manager for allowing the ineligible purchases.

House of Europe Funding I’s investments in other CDOs far exceeded the limit of 15 percent of the portfolio, the lawsuit said.

Since April 2006, House of Europe Funding I purchased over $171 million of CDO securities in at least six separate transactions, all in breach of contract, according to the complaint.

Over 80 percent of the improper assets defaulted and are worth almost nothing, the complaint says.

Oscar Suris, a spokesman for Wells Fargo, declined to comment. A Collineo spokesperson could not immediately be reached after hours.

The case is House of Europe Funding I Ltd. v Wells Fargo Bank, N.A., U.S. District Court, Southern DIstrict of New York, 13-cv-519.

(Reporting by Karen Freifeld; Editing by Richard Chang)Reuters | By Karen Freifeld
Posted: 01/23/2013 8:41 pm EST



No comments yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

NAMASTE for your support.

Enter your email address to follow this blog and receive notifications of new posts by email.

Join 94 other followers


Error: Twitter did not respond. Please wait a few minutes and refresh this page.


%d bloggers like this: