A $165 million cash settlement has been reached in a class-action lawsuit that alleged investors were misled about the safety of mortgage-backed securities comprised of loans originated by now-defunct subprime lender NovaStar Mortgage Inc.

The settlement with Deutsche Bank, NovaStar, Royal Bank of Scotland and Wells Fargo is pending approval by the U.S. District Court in the Southern District of New York, according to Cohen Milstein Sellers & Toll, the law firm representing the plaintiff class, which includes multiple worker pension funds.

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