Royal Bank of Scotland has won dismissal of a lawsuit filed by Seoul-based Woori Bank over losses from investments in collateralized debt obligations tied to the housing market.
Bloomberg reports that a federal judge in New York ruled today that the South Korean lender failed to present a strong enough case against RBS. Woori Bank had alleged that it was duped into investing $80m in CDOs that were exposed to risk from the subprime housing market, according to the order filed today by U.S. District Judge Harold Baer in Manhattan.
Woori lost most of the money in those investments, which were made from about 2006 through 2007, lawyers for the bank said in a complaint filed in May.
'The deals in this case are, like most deals of that time, somewhat suspect', Baer said in Friday’s order. 'Not all such deals are inherently fraudulent or misleading simply because they involved subprime mortgages and the sale of what are now worthless investments that were once pitched as safe'.
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