FINRA recently announced that it has fined Deutsche Bank Securities, Inc. $7.5m for “negligently misrepresenting” delinquency information on subprime mortgages underlying securities issued in 2006.
FINRA found that Deutsche misrepresented and underreported the share of delinquent mortgages in the prospectus supplements of six subprime residential mortgage-backed securities (RMBS) worth $2.2bn. Deutsche described in these supplements a method of calculating delinquencies that differed from the methods actually used at the firm.
For example, FINRA found that Deutsche reported 8.75% of the loans in one MBS deal was between 30 and 59 days delinquent, corresponding to $14m in delinquent loans. The actual delinquency numbers computed under the method disclosed by Deutsche showed a significantly larger share — 24.02% — of mortgages 30-59 days delinquent, corresponding to $38.5m loans.
Additionally, FINRA said that Deutsche failed to correct errors by a third-party vendor and servicers that underreported historical delinquency rates in connection with its offer and sale of 16 additional subprime RMBS deals issued in 2007.
If you have questions about subprime mortgage investments you made with Deutsche Bank, The White Law Group may be able to help. For a free consultation, call 312-238-9650,
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida. With over 30 years of securities law experience, including experience working at FINRA (f/k/a the NASD) and the SEC, The White Law Group has the expertise to help investors defrauded in securities, investment and financial business transactions.
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