Goldman Sachs, Citigroup, Morgan Stanley and dozens more banks and brokerages have been sued by a Boston area-based fund seeking reimbursement for losses related to subprime loans, media reports said.

Cambridge Place Investment Management, which has been set up by former Goldman Sachs Group bankers Martin Finegold and Robert Kramer, lost more than $1.2 billion as a result of the banks’ untrue statements, according to a copy of the complaint filed on 9 July in a state court in Massachusetts, according to Bloomberg.

Cambridge Place Investment Management could not be reached by this publication at the time of going to press.

The story also adds to examples of litigation that has been prompted by the financial crisis. In the US, for example, the sale of auction rate securities, a form of debt instrument that was hit by the credit crunch. Earlier this year, Goldman Sachs was accused of dishonestly playing both sides of the market through its involvement in the sale of collateralized debt obligations.

In the Cambridge Place Investment Management suit, the document stated that the banks sold securities backed by mortgages that came from a “small group of now notorious subprime mortgage originators,” used faulty appraisals, accepted misleading information in loan applications, and violated their own standards for underwriting. The banks offered or sold $2.4 billion of residential mortgage- backed securities using untrue statements, according to the lawsuit, as quoted by news reports.

The suit also names Bank of America, Merrill Lynch, UBS, JP Morgan, Barclays, Credit Suisse, Deutsche Bank, HSBC and other banks.

A report by Bloomberg said that representatives from Citigroup, Goldman Sachs, JPMorgan, Barclays, Bank of America and Morgan Stanley and Deutsche Bank declined to comment. Representatives from the others couldn’t be reached after business hours.