NY accuses Credit Suisse of mortgage fraud
ALBANY, N.Y. New York is suing Credit Suisse Securities and affiliates, claiming they misled investors about the care taken in evaluating their residential mortgage-backed securities.
The suit filed Tuesday in Manhattan under New York's Martin Act alleges Credit Suisse deceived investors before the 2008 market collapse.
Attorney General Eric Schneiderman says the securities sponsored and underwritten by Credit Suisse in 2006 and 2007 have lost about $11.2 billion.
"Our investigations and legal actions demonstrate that there must be one set of rules for all -- no matter how big or powerful the institution may be -- and that those rules will be enforced vigorously," Schneiderman said in a statement. "We need real accountability for the illegal and deceptive conduct in the creation of the housing bubble in order to bring justice for New York's homeowners and investors."
- JPMorgan Chase sued over Bear Stearns securities
- Wells Fargo sued for mortgage fraud
- U.S. sues Bank of America for mortgage fraud
Zurich-based Credit Suisse says Schneiderman "recycles baseless claims" from private lawsuits.
Schneiderman is co-chair of a task force established by President Barack Obama to investigate misconduct in the pooling and sales of those securities.
Last month, he filed a similar lawsuit against JPMorgan Chase & Co. (JPM), alleging fraud by Bear Stearns before its 2008 collapse and subsequent sale to the New York bank.
Preet Bharara, the top federal prosecutor in New York, in October sued Wells Fargo (WFC) on allegations of mortgage fraud, alleging that the bank's lending practices cost the government hundreds of millions of dollars in federal insurance payments. He also last month filed suit against Bank of America (BAC), claiming that the financial firm committed mortgage fraud against Fannie Mae and Freddie Mac in the years leading up to the 2008 financial crisis.