Kensington founder’s firm sues US banks for sub-prime mis-selling
Share
Cambridge Place Investment Management, the US firm founded by ex-Kensington chairman Martin Finegold is suing the American arms of Barclays, HSBC and RBS for mis-selling mortgage-backed securities.
Martin Finegold, who has been dubbed “Mr sub-prime” is the ex-chairman of specialist lender Kensington and former chief executive of Trigold.
Finegold and Robert Kramer founded Cambridge Place in 2002.
A spokesman for the firm says it is not Finegold that has filed the suit but his partner Kramer.
The firm filed the lawsuit on Friday, which also alleges JP Morgan, Citigroup, Credit Suisse, Deutsche Bank, Merrill Lynch, UBS, Goldman Sachs and Morgan Stanley for mis-selling securities.
A spokesman for the firm says the UK operation is not involved in the case and all the securities were bought by the American arm of the business.
It estimates Cambridge lost around £1.6bn from the deals, but if the case is successful it will mean the £2.4bn securities are returned to the original lenders.
A spokesman for the firm says it has 63 confidential witnesses from the various banks that can that testify that the loans were packaged and mis-sold.
The Daily Telegraph reports that Cambridge Place also blames the “mortgage originators” - the sub-prime lenders responsible for assessing borrowers - for bending the truth about the worth of the loans.
It accuses HSBC of mis-selling $64m of securities in 2005 and 2006, with 40% now in delinquency.
RBS is targeted through its Greenwich Capital arm, accused of mis-selling $260m between 2005 and 2007. Around 35% are now in delinquency.
If you enjoyed this article, sign up here to receive daily email updates from Mortgage Strategy and Follow @mortgagestrat
