Deutsche Bank AG lost a bid Wednesday to end a shareholder lawsuit accusing it of misrepresenting the risk of packaging home loans into complex financial products.

U.S. District Judge Katherine Forrest in Manhattan denied a motion by Deutsche to dismiss the lawsuit, which seeks class-action status for its investors accusing it of a scheme to maximize profits at their expense.

"Plaintiffs have certainly set forth sufficient plausible allegations to support a claim for a fraudulent scheme against Deutsche Bank," Forrest wrote.

Representatives for Deutsche and the plaintiffs did not immediately respond to a request for a comment.

Filed in 2011, the lawsuit accused Deutsche of issuing false and misleading statements about its business and financial results.

The lawsuit said Deutsche Bank had put together and sold mortgage-backed securities that the bank knew were not good quality, misrepresented its risk management practices and hid its failure to write down impaired securities.

After Deutsche announced billions of dollars in losses starting in 2008, its stock fell from a high of $159.59 in May 2007 to $21.27 in January 2009, the complaint said.

The U.S.-traded shares were down 3.1 percent at $39.01 in afternoon New York Stock Exchange trading on Wednesday.