Lawsuit Against Largest Wall Street Banks Alleges Collusive And Predatory Practices
The Thornburg Mortgage, Inc. trustee who is handling the bankruptcy liquidation has filed a $2.2 billion suit against many of Wall Street’s biggest banks, including JP Morgan Chase & Company, Citigroup, Inc. and Goldman Sachs Group, Inc., alleging that their “collusive” and “predatory” practices eventually ended up causing Thornburg’s failure. The trustee, Joel I. Sher, who is representing the liquidation of once the second largest independent mortgage company in the U.S., filed the suits in U.S. Bankruptcy Court in Baltimore. In addition to JP Morgan, Citigroup and Goldman Sachs, the trustee also sued Bank of America and Countrywide Home Loans, as well as subsidiaries of Barclays PLC, Credit Suisse Group, Royal Bank of Scotland Group PLC and UBS.
The allegations are that Thornburg was undone by a series of unlawful acts committed by the banks during the mortgage crisis in 2007 and 2008 to take control of Thornburg and drive it into bankruptcy. Thornburg, which was based out of Santa Fe, New Mexico, filed for Chapter 11 protection in May 2009, listing assets of $24.4 billion and debts of $24.7 billion. Some $19.7 billion of the assets were held in securitization trusts.