Carlyle sued over MBS misrepresentation

Kuwaiti conglomerate National Industries Group is suing the Carlyle Group, a building sponsor at Extell Development’s Rushmore towers at 80 Riverside Boulevard, for allegedly misrepresenting the financial health of its affiliate group, Carlyle Capital Corp, which collapsed in March of last year. National Industries Group had invested $50 million in Carlyle Capital, a public debt fund, allegedly under the impression that the fund was going to be invested in triple-A mortgage-backed securities, as was allegedly advertised. The debt fund’s collapse, one of the earliest bucklings in the financial downturn, was seen as a major blow to the Carlyle Group’s reputation in the Middle East, the Financial Times reported, and a cautionary tale regarding the range of diversity within private equity portfolios. The Carlyle Capital Group reportedly culled $600 million in private investments and another $340 million when it was publicly listed.

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