As expected, Allstate has filed against Citigroup and Deutsche Bank AG Allstate is suing over accusations that the banks covered up risks on more than $385 million in mortgage securities purchased by the insurance company.
Already involved in two comparable lawsuits against Bank of America Corp. and JP Morgan Chase & Co., Allstate is currently seeking $1.8 billion in damages from those companies on similar grounds.
A trend is definitely developing among businesses impacted by the alleged securities fraud, as more corporations take their grievances to court. Brokerage house Charles Schwab Corp. is part of those taking legal avenues to recoup their losses, recently filing against lenders they believe lied about the relative safety of the mortgage debt they acquired.
Allstate, the largest publicly traded home and auto insurer in the United States, has stated that the banks promised ""highly rated, safe securities,"" while they were actually offering them ""toxic"" loan pools with a very high default rate.
Ending 2010 with $79.6 billion in fixed-income investments and $6.68 billion in mortgage loan holdings, Allstate seeks to recover lost principal and interest from the banks, in addition to other damages.
Interested in more information? The Deutsche Bank case is filed as: Allstate Insurance Co. et al v. Ace Securities Corp. et al, New York State Supreme Court , New York County, No. 650431/2011. Find the Citigroup case listed as: Allstate Insurance Co. et al v. CitiMortgage Inc. et al, filed in the same court mentioned above, No. 650432/2011.