By THOMAS HARTLEY
Business First of Buffalo

A state Supreme Court justice in Buffalo has dismissed several defendants from a lawsuit brought by M&T Bank Corp. against Deutsche Bank AG and others.

The 2008 legal action seeks to recover more than $82 million M&T said was lost by investing in collateralized debt obligations.

The Buffalo bank accused the defendants of fraudulently representing that "Gemstone" securities it bought in February 2007 were "safe, secure and nearly risk-free," when in fact that was not the case.

M&T accused the German bank and HBK Investments LP, which it said marketed the Gemstone notes, of having "dramatically reduced the underwriting standards and due diligence performed in selecting and assembling the collateral underlying the notes they marketed."

Tuesday, Hon. John Curran dismissed for various reasons Deutsche Bank AG, Deutsche Bank Trust Co. Americas, and the two Gemstone entities from the case.

Remaining are Deutsche Bank Securities Inc. and HBK Investments, HBK Partners and HBK Management.

Curran's memorandum represents an interim step in the early stages of the case. No trial date has been set.