Friday, 1 July 2016
Last updated 18 hours ago
Jul 13 2010 | 12:09pm ET
Cambridge Place Investment Management has sued dozens of banks and brokerages, including some of Wall Street’s biggest names, alleging they misled the hedge fund about its investments in subprime mortgage-linked securities.
Cambridge Place, which is in the process of liquidating a trio of funds that invested in the subprime market, accused Bank of America, Citigroup, Goldman Sachs and Morgan Stanley, among others, of selling it $2.4 billion in securities including mortgages from a “small group of now notorious subprime mortgage originators.” The Concord, Mass.-based firm said it lost half of its investment, alleging that the banks employed faulty appraisals and bogus loan applications to assure investors, facilitating an “environment of improper lending practices.”
“The Wall Street banks conducted inadequate due diligence and failed to satisfy their own responsibilities,” the hedge fund said in its lawsuit, filed in Massachusetts state courts on July 9.
Among the other banks listed as defendants are Barclays, Credit Suisse Group, Deutsche Bank, HSBC, Merrill Lynch and UBS.