New York, NYMassachusetts Mutual Life Insurance Co. has filed a UBS lawsuit accusing the bank and three others of hiding risks on millions of dollars worth of mortgage-related debt it purchased, Reuters reports.
According to the news provider, the lawsuit, which was filed in federal court in Boston, Massachusetts, names Goldman Sachs Group, JPMorgan Chase & Co. and Barclays as defendants, along with UBS AG.
The suit accuses the banks of misleading MassMutual about the potential risks of underwritten certificates between 2005 and 2007 that had allegedly been backed up by loans given by American Home Mortgage Investment Corp.
The news source reports that American Home Mortgage Investment Corp. lent to people who were not able to fully prove their income and assets. The company filed for bankruptcy in August 2007.
MassMutual claims that the certificates it purchased from the bank are "junk," with their market value having dropped 77 percent, according to the news source.
Representatives for the banks reportedly declined to comment on the matter.
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