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Investment firm sues Fifth Third Bank and securities brokers

Updated: August 8, 2012 6:10AM

An investment firm is suing Fifth Third Bank and a group of insurance-backed securities brokers for allegedly defrauding them out of more than $80 million dollars.

Nina Investments claims it invested more than $80 million with the brokers between 2005 and 2006 after they were told it would get huge returns on both insurance-backed securities and a premium finance product called “Ultra,” according to the suit filed in Cook County Circuit Court Thursday.

A spokesman for Fifth Third Bank said Friday the bank does not comment on pending litigation.

Nina’s investment went towards paying off debt accrued by defendants Matthew Ross, Ira Brody and Edward Netherland “while living lavish lifestyles,” the suit claims.

The suit said Nina was told about the substantial income from insurance-backed securities by Netherland and Brody’s investment firm Concord. After an initial $6.5 million investment, Nina was persuaded to add another $75 million to purchase “Ultra” and gain as much as $30 million to $90 million in fees and commissions over three years.

Fifth Third Bank was complicit in the fraud, according to the suit, and continued to extend Netherland, Ross — a Fifth Third executive — and Brody lines of credit even after they went deep into debt multiple times. The bank “well understood” that Ultra could never garner the returns Concord promised Nina, according to the suit.

In 2009, Fifth Third explained away Ultra’s losses by claiming another product, “Ultra Plus”, would earn enough to put Concord back in the black.

Q Capital, a valuation firm, is also named in the suit for creating inflated values for Ultra and Ultra Plus. The firm could not be reached for comment.

The suit claims that as a result of Fifth Third’s efforts to cover up Concord’s losses, Nina was unaware of the missing millions until 2010.

The three-count suit seeks at least $80 million in compensatory damages and another $80 million in punitive damages for each count, as well as other fees.

Contributing: Sandra Guy

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