CONTACT US

For any general inquiries, please fill in the following contact form:

Our websites never use cookies or other technologies such as pixel tags and web beacons. We only retain personal information when the contact section of our websites is filled. To proceed and get in touch with us through this format please read our Terms & Conditions, updated to be in line with the provisions of the GDPR, and tick this box to consent in us retaining the above information for contacting purposes only.

SUBMIT

Credit Suisse Must Face New York Mortgage Suit, Court Says

Credit Suisse Must Face New York Mortgage Suit, Court Says

By Chris Dolmetsch

- New York A.G. sued bank for fraud in sale of mortgage bonds

- Appeals court upholds ruling denying bid to dismiss case

Credit Suisse Group AG must face New York Attorney General Eric Schneiderman’s $10 billion lawsuit accusing the bank of fraud in the sale of mortgage-backed securities before the 2008 financial crisis, a state appeals court ruled Tuesday.

The Zurich-based bank lost its bid to dismiss the 2012 lawsuit, which accused Credit Suisse of misrepresenting the risks of investing in mortgage-backed securities. The appellate panel rejected Credit Suisse’s arguments, saying Schneiderman had shown the bank may have engaged in misconduct and that the claims were within the six-year statute of limitations. Two of the five judges disagreed, saying a three-year statute of limitations applied so the case should have been thrown out.

Andrew Wilson, a spokesman for Credit Suisse, declined to comment on the ruling. In December 2014, New York State Supreme Court Justice Marcy Friedman denied the bank’s first request to dismiss the lawsuit, which Credit Suisse appealed.

Credit Suisse is among European banks in settlement talks with the Justice Department and U.S. states over abuses in residential mortgage-backed securities, people familiar with the matter said in September. Tuesday’s decision by the appeals court may clear the path for the lender to resolve similar claims with U.S. authorities, Bloomberg Intelligence analyst Elliot Stein said.

Global Settlement

Credit Suisse is also scheduled to go to trial in March in a lawsuit by the National Credit Union Administration on behalf of failed credit unions that bought billions of dollars in mortgage-backed bonds, which could push the bank to reach a global settlement before then, Stein said.

He estimated that Credit Suisse would pay $2 billion to $4 billion, based on other settlements with the Justice Department’s task force on mortgage-backed securities.

Amy Spitalnick, a spokeswoman for Schneiderman, said, "We’re pleased with the appellate court’s decision, which recognizes that a six-year statute of limitations applies to our statutory fraud claims." Schneiderman serves as co-chair of the task force of state and federal agencies probing wrongdoing in the mortgage-bond market.

The majority of the appeals court concluded the lawsuit adequately alleges that Credit Suisse’s behavior had elements of common fraud, which carries a six-year statute of limitations. The dissenting judges, however, cited a broader definition of fraud that carries a three-year statute of limitations.

The case is People of the State of New York v. Credit Suisse Securities (USA) LLC, 451802-2012, New York State Supreme Court, New York County (Manhattan).

https://www.bloomberg.com/news/articles/2016-12-13/credit-suisse-must-face-new-york-mortgage-suit-court-says


MORE NEWS

Azerbaijani banker’s £1m diamond ring seized in ‘dirty money’ inquiry

Azerbaijani banker’s £1m diamond ring seized in ‘dirty money’ inquiry
Ring bought by Jahangir Hajiyev from Harrods department store confiscated by National Crime Agency.Police have seized a Cartier diamond ring...

Brexit deal: Theresa May suffers historic defeat in vote as Tories turn against her

Brexit deal: Theresa May suffers historic defeat in vote as Tories turn against her
Theresa May has pledged to face down a vote of no confidence in her government, after her Brexit deal was shot down by MPs in the ...

'We should deliver for the British people': Theresa May calls on rebel MPs to ...

'We should deliver for the British people': Theresa May calls on rebel MPs to back her vision for Brexit in key vote TODAY... or face handing the keys of Number 10 to Jeremy Corbyn
Theresa May has warned Tory rebels they risk a Jeremy Corbyn government and the break-up of the UK if they reject her Brexit deal in ...

Who's behind the blog

Who's behind the blog

SOCIAL MEDIA