The Observer just wrapped up a post about the institutional-investor scramble to get a piece of Bank of America over allegedly faulty mortgage securities when we ran across the news that Citigroup and Wells Fargo are targets in similar lawsuits.
The investors, which also include the Federal Home Loan Banks of Chicago and Indianapolis, filed lawsuits against Citigroup starting in July, Citigroup said in the filing with the U.S. Securities and Exchange Commission.
Reuters also says that Charles Schwab is seeking payback on $1.38 billion in mortgage securities the investor bought from Citi. Cambridge Place, a hedge fund, is looking to get some money back for a $1.2 billion loss it took on subprime securities issued by Citi, Goldman Sachs, Morgan Stanley and JPMorgan Chase, among others. Wells Fargo appears to be facing similar legal troubles.
The largest four U.S. banks by assets — BofA, JPMorgan Chase, Citi and Wells Fargo — have now disclosed investor lawsuits related to potentially faulty mortgage securities. The legal heat is on.
mtaylor [at] observer.com | @mbrookstaylor
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