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Wells Fargo, HSBC Among Banks Sued Over Subprime Securities


bloomberg.com | December 26, 2014

By Bob Van Voris

Wells Fargo & Co. (WFC), HSBC Holdings Plc (HSBA), Bank of New York Mellon Corp. (BK) and Deutsche Bank AG (DBK) were sued by an Irish securities firm that claims the banks failed to protect investors in their role as trustees of securities backed by home loans that defaulted after the 2008 credit crisis.

Phoenix Light SF Ltd. accused the banks, in complaints filed yesterday in Manhattan federal court, of failing to safeguard the interests of investors as required by their contracts. The securities were sold from 2005 to 2007.

Phoenix Light and related investors sued Deutsche Bank over 21 securitization trusts on which they claimed $183 million in losses. BNY Mellon was sued over 27 offerings for claimed damages of $269 million. Wells Fargo was sued for $237 million in losses on 12 securitizations and HSBC for $170 million on 11 securitizations.

The suits are part of a move by investors to target trustees of mortgage securities over their role in the crisis. Trustees have been sued by the National Credit Union Administration and by other investors, including hedge funds.

Kevin Friedlander, a spokesman for San Francisco-based Wells Fargo, declined to comment on the allegations. Neil Brazil, a spokesman for London-based HSBC, had no immediate comment. Kevin Heine, a spokesman for New York-based BNY Mellon, didn’t immediately respond to a voice-mail message seeking comment.

Ari Cohen, a Deutsche Bank spokesman, said the claims were without merit and the bank would defend against them.

The cases are Phoenix Light SF Ltd. v. HSBC Bank USA, 14-cv-10101; Phoenix Light SF Ltd. v. Wells Fargo Bank N.A., 14-cv-10102; Phoenix Light SF Ltd. v. Deutsche Bank National Trust Co., 14-cv-10103; Phoenix Light SF Ltd. v. Bank of New York Mellon Corp., 14-cv-10104; U.S. District Court, Southern District of New York (Manhattan).


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CFLA was founded by the Nation's Leading Foreclosure Defense Attorneys back in 2007 to serve the Foreclosure Defense Industry and fight pervasive Bank Fraud. Since opening our virtual doors, CFLA has rapidly expanded to become the premier online legal destination for small businesses and consumers. But as the company continues to grow, we're careful to hold true to our original vision. For us, putting the law within reach of millions of people is more than just a novel idea—it's the founding principle, just ask Andrew P. Lehman, J.D.. With convenient locations in Houston and Los Angeles, you can contact Our National Account Specialist and General Manager / Member Damion W. Emholtz at 888-758-2352 for a free Mortgage Fraud Analysis or to obtain samples of work product, including cutting edge Bloomberg Securitization Audits, Litigation Support, Quiet Title Packages, and for more information about our Nationally Accredited and U.S. Department of Education Approved "Mortgage Securitization Analyst Training Certification" Classes (3 days) 24 hours for approved CLE & MCLE Credit (Now Available Online).

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