Round and round

5 May 2010 By Rolfe Winkler

The German bank allegedly duped on the Abacus deal must itself now defend against charges of dumping securities onto unsuspecting customers. The facts of the cases are different, but the IKB link illustrates the passtheparcel game that characterized the end of the boom.

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Context News

A federal judge has rejected a request by German bank IKB Deutsche Industriebank AG to throw out U.S. investor lawsuits accusing it of fraudulently creating a risky debt vehicle it knew was likely to default.

The classaction lawsuits contended that IKB sponsored the creation of a structured investment vehicle, Rhinebridge, in June 2007 to dump investment losses onto unsuspecting investors and save itself from possible bankruptcy.

U.S. District Judge Shira Scheindlin in Manhattan declined late Tuesday to dismiss the bank and former Chief Executive Stefan Ortseifen as defendants.

A week earlier, she had rejected requests by rating agencies Moody's Investors Service and Standard & Poor's to dismiss them as defendants.

Context News

U.S. District Judge Shira Scheindlin in Manhattan declined late Tuesday to dismiss the bank and former Chief Executive Stefan Ortseifen as defendants.

A week earlier, she had rejected requests by rating agencies Moody's Investors Service and Standard & Poor's to dismiss them as defendants.

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