Deutsche Bank vows fight against US lawsuit

3rd May 2011, Comments 0 comments

The biggest German bank, Deutsche Bank, rejected Tuesday a US Justice Department lawsuit for mortage fraud as unfounded and pledged to mount a vigorous defence.

"The suit is unfounded and we intend to defend ourselves vigorously against this action," a bank spokesman told AFP.

He declined to comment further.

According to a statement issued by US federal prosecutor Preet Bharara, US authorities have filed a lawsuit against Deutsche Bank for having obtained government insurance for substandard mortgages during the US housing boom.

Deutsche Bank and subsidiary MortgageIT "repeatedly lied to be included in a government program to select mortgages for insurance by the government," said the Justice Department complaint, filed in New York federal district court.

"While Deutsche Bank and MortgageIT profited from the resale of these government-insured mortgages, thousands of American homeowners have faced default and eviction, and the government has paid hundreds of millions of dollars in insurance claims, with hundreds of millions of dollars more expected in the future," it said.

In late trading on the Frankfurt stock exchange, shares in Deutsche Bank showed a loss of 2.21 percent at 43.22 euros, while the DAX index on which they are listed was 0.49 percent lower overall.

© 2011 AFP

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