US sues ex-Deutsche Bank trader for duping sub-prime investors

New York: A former Deutsche Bank AG head of sub-prime trading defrauded investors in mortgage-backed securities sold before the financial crisis, the US said in a civil lawsuit filed Monday in Brooklyn.

Paul Mangione misled investors about the quality of loans underlying $1.4 billion (Dh5 billion) 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. “We will hold accountable those who seek to deceive the investing public through fraud and misrepresentation.”