European Bank LBBW Sues Wells Fargo Over Alleged $1.5 Billion Securities Fraud
NEW YORK, Oct. 1, 2012 /PRNewswire/ -- European bank LBBW Luxemburg S.A. has filed a lawsuit in New York federal court over an alleged $1.5 billion securities fraud scheme that ensnared both the bank and the Zuni Indian Tribe.
Attorneys John Zavitsanos, Sean Gorman, and David Warden of the Houston-based litigation boutique Ahmad, Zavitsanos, Anaipakos, Alavi & Mensing P.C. represent LBBW in its lawsuit against Charlotte, N.C.-based Wells Fargo Securities LLC (formerly Wachovia Capital Markets) and New Jersey-based Fortis Securities.
The lawsuit stems from a 2006 deal where Wells Fargo sold LBBW $40 million of what it claimed were highly-rated securities. LBBW, a subsidiary of the German bank Landesbank Baden-Wurttemberg, alleges in the lawsuit that nearly $1.5 billion of the securities were sold to LBBW and other customers even though Wells Fargo had determined that the securities were not worth the purchase price and were riskier than promised. The securities were collateralized by residential mortgages, and defaulted within a year.
According to LBBW's attorneys, the alleged fraud was masked by the beginning of the economic crisis in 2007, and was discovered only after the Securities and Exchange Commission instigated administrative proceedings related to a $5.5 million investment made by the Zuni Indian Tribe's employee pension fund.
"Wachovia tried to squeeze every penny out of a deal they knew was bad," says Mr. Warden. "Their greed was the very act that allowed investors to realize the misrepresentations Wachovia made to close a deal that had already gone sour."
The lawsuit, LBBW Luxemburg S.A. v. Wells Fargo Securities LLC, et al., No. 12-CV-7311, was filed Sept. 28, 2012, in the U.S. District Court for the Southern District of New York. The complaint alleges common law fraud, constructive fraud, breach of contract, breach of fiduciary duty and negligent misrepresentation.
Ahmad, Zavitsanos, Anaipakos, Alavi & Mensing P.C., or AZA, is a Houston-based law firm that is home to true courtroom lawyers with a formidable track record in complex commercial litigation, including energy, intellectual property, securities fraud, construction and business dispute cases. AZA is one of only 32 firms in the U.S. to be recognized as "awesome opponents" in a nationwide poll of corporate general counsel who were asked to name the law firms they hope their companies never have to face in court. In fact, AZA has been hired on many occasions by the same companies the firm has prevailed against at trial. Read more at http://www.azalaw.com.
For more information on the lawsuit, please contact Alan Bentrup at 800-559-4534 or firstname.lastname@example.org.
SOURCE Ahmad, Zavitsanos, Anaipakos, Alavi & Mensing P.C.