RICHMOND, Va. (AP/WAVY) — Virginia Attorney General Mark Herring is suing some of the world’s largest banks for $1.15 billion in damages related to the housing market crash.
Herring said at a news conference Tuesday that the banks misled the Virginia Retirement System about the quality of certain loans while selling mortgage-backed securities.
He said the VRS was forced to sell those securities because of the junk mortgages at a loss of $383 million. Herring is suing for three times the actual damages.
The lawsuit was unsealed Tuesday in Richmond Circuit Court. Herring said it is the largest financial fraud lawsuit ever filed by Virginia.
The Democratic attorney general said nearly 40 percent of the 785,000 mortgages backing 220 securities purchased by VRS were of significantly higher risk than the banks had represented.
The named banks are:
- Barclays Capital Inc.
- Citigroup Global Markets Inc.
- Countrywide Securities Corporation
- Credit Suisse Securities (USA) LLC
- Deutsche Bank Securities Inc.
- Goldman, Sachs & Co.
- RBS Securities, Inc.
- HSBC Securities (USA) Inc.
- Morgan Stanley & Co. LLC
- UBS Securities LLC
- WAMU Capital Corp.
- J.P. Morgan Securities LLC (and as current owner of Bear, Stearns & Co.)
- Merrill Lynch, Pierce, Fenner & Smith Incorporated(and as current owner of Banc of America Securities LLC)