NEW YORK (Reuters) - A U.S. judge on Monday said Deutsche Bank AG DBKGn.DE must face part of a lawsuit claiming it deceived investors who bought more than $5.4 billion of preferred securities by concealing its exposure to the fast-deteriorating subprime mortgage market.

A logo of a branch of Germany's Deutsche Bank is seen in Cologne, Germany, July 18, 2016. REUTERS/Wolfgang Rattay

U.S. District Judge Deborah Batts in Manhattan rejected the German bank’s bid to dismiss claims with respect to roughly $2.55 billion of securities sold in November 2007 and February 2008, court papers show.

She also dismissed claims with respect to $2.9 billion of securities sold in May 2007, July 2007 and May 2008.

Deutsche Bank spokeswoman Amanda Williams declined to comment. Eric Niehaus, a lawyer for the plaintiffs, did not immediately respond to requests for comment.

The lawsuit, led by industrial metals company Belmont Holdings Corp and two individuals, is one of many seeking to hold banks responsible for concealing risks prior to the U.S. housing and financial crises.

Investors said Deutsche Bank should have warned them in offering materials how it had taken on significant exposure to subprime markets through residential mortgage-backed securities and collateralized debt obligations.

They said this could have stopped them from buying the bank’s preferred securities before their value tumbled by nearly two-thirds, causing billions of dollars of losses.

Batts had dismissed the lawsuit in 2012, and the federal appeals court in Manhattan upheld that dismissal in 2014.

But the plaintiffs got new life in March 2015 when the U.S. Supreme Court said issuers could be liable when an offering statement omits material facts that “conflict with what a reasonable investor would take from the statement itself.”

The appeals court directed Batts to review the case again in light of the Supreme Court decision, which involved pharmacy services company Omnicare Inc.

In Monday’s 100-page decision, Batts said the plaintiffs plausibly alleged that Deutsche Bank knew but concealed how by the autumn of 2007 that it was amassing big subprime losses, including $4.5 billion on mortgage-backed securities that year alone.

The judge rejected claims tied to the May 2008 offering because the bank had by then improved its disclosures.

The case is In re: Deutsche Bank AG Securities Litigation, U.S. District Court, Southern District of New York, No. 09-01714.

(This version of the story corrects figure to “roughly $2.55 billion,” not “$1.9 billion” in second paragraph. In 3rd paragraph, corrects figure to “$2.9 billion,” not “more than $3.5 billion”)