New York: A former Deutsche Bank AG head of subprime trading defrauded investors in mortgage-backed securities sold before the financial crisis, the US said in a civil lawsuit filed last Monday in Brooklyn.
Paul Mangione misled investors about the quality of loans underlying $1.4bn in mortgage-backed securities, resulting in hundreds of millions of dollars in losses, the US said.
“The defendant fraudulently induced investors, including pension plans, religious organisations, financial institutions and government-sponsored entities, to name only a few, to invest nearly a billion and a half dollars in HE4 and HE5 RMBS, and caused them to suffer extraordinary losses as a result,” stated Acting US Attorney Bridget M. Rohde for the Eastern District of New York.
