Schwab sues banks over $1.38 billion in RMBS issuance

Charles Schwab Corp. is suing units of 11 big banks that sold or issued certificates in securitization trusts backed by residential mortgage loans to its bank. The banks named in the complaint filed on July 15 include BNP Paribas, Bank of America, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, Royal Bank of Scotland and Morgan Stanley. In a complaint filed with the Superior Court of California, County of San Francisco, Schwab said it paid the defendants $1.38 billion for 37 certificates in 36 securitization trusts backed by residential mortgage loans. Schwab alleges the defendants made “numerous statements to Schwab about the certificates and the credit quality of the mortgage loans that backed them” and “many of those statements were untrue as to material facts.”

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