Former Deutsche Subprime Securities Head Charged
Federal prosecutors announced fraud charges late Monday against the former head of Deutsche Bank's subprime trading unit, accusing him of knowingly selling $1.4 billion worth of real estate-backed securities backed by problematic loans.
September 11, 2017 at 02:02 PM
5 minute read
Federal prosecutors announced fraud charges late Monday against the former head of Deutsche Bank's subprime trading unit, accusing him of knowingly selling $1.4 billion worth of real estate-backed securities backed by problematic loans.
According to prosecutors, Paul Mangione knew that key aspects of the home loans packaged as securities, including their compliance with lending standards, the borrowers' ability to pay, as well as their fraud and appraisal accuracy, were misrepresentations. The charges were filed in the U.S. District Court for the Eastern District of New York.
“By allegedly misleading investors about the riskiness of these securities, Mr. Mangione prioritized his and his employer's bottom line over principles of honesty and fair dealing,” said Acting Assistant Attorney General Chad Readler of the U.S. Justice Department's civil division, which brought the charges. “The Department of Justice will continue to pursue those who engage in fraud as a way to conduct business.”
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