NEW YORK -- A federal bankruptcy judge has thrown out the Federal Deposit Insurance Corp.'s claim that Thomson McKinnon Securities Inc. defrauded a New Jersey thrift in the sale of $31 million in mortgages, lawyers in the case said.
The FDIC has alleged that Thomson McKinnon, which filed for bankruptcy protection in 1990 and is no longer operating, defrauded Lincoln Federal Savings and Loan Association of Westfield, N.J., because it had not reviewed the soundness of the mortgage sale that it arranged. Lincoln Federal is also defunct.
Louis Miron, one of the lawyers representing Thomson McKinnon, said U.S. District Judge Howard Schwartzberg in White Plains, N.Y., dismissed the claim last week.
Seen Acting as Matchmaker
He said the judge found that Thomson McKinnon was not acting as a securities dealer, which would have had a duty of making sure the mortgage sales were safe.
Instead, the judge found that Thomson McKinnon was carrying out a mortgage broker's "task of matchmaker" by bringing the parties together to negotiate a deal.
Thomson McKinnon had brokered the 1983 and 1984 transactions in which Lincoln had purchased 1,116 residential mortgages from CES Capital Corp., a Texas corporation that originated serviced, and sold home mortgages.