A federal appeals court on Friday ruled that Royal Bank of Scotland Group Plc, Deutsche Bank AG and Wells Fargo & Co. must face claims from a pension fund over $1.3 billion in mortgage bonds and potentially billions more, Bloomberg News reported on Friday. The appeals court reversed a lower-court ruling that dismissed the case against the banks and NovaStar Mortgage Inc. over loans bundled into securities before the financial crisis. The claims by the New Jersey Carpenters Health Fund "permit us to draw the reasonable inference" that the banks are liable under federal securities laws, the appeals court said in its decision. The New Jersey fund filed a class-action complaint over $1.3 billion in bonds sold to investors in 2007, according to court papers. The fund claimed that the securities were riskier than promised and that offering documents contained material misstatements and omissions about the loans backing them.
