New York A.G. Schneiderman Sues Credit Suisse For Fraudulent Residential Mortgage-Backed Securities

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New York A.G. Schneiderman Sues Credit Suisse For Fraudulent Residential Mortgage-Backed Securities

New York A.G. Schneiderman Sues Credit Suisse For Fraudulent Residential Mortgage-Backed Securities

Lawsuit Charges Credit Suisse Misrepresented Loan Quality Review Process, Deceived Investors & Contributed To Mortgage Crisis

Continued Legal Action by State-Federal Residential Mortgage-Backed Securities Working Group

Schneiderman: Credit Suisse RMBS Trusts Incurred Billions In Losses And Will Be Held Accountable

NEW YORK – Attorney General Eric T. Schneiderman today filed a Martin Act complaint against Credit Suisse Securities (USA) LLC and its affiliates for making fraudulent misrepresentations and omissions to promote the sale of residential mortgage­-backed securities (RMBS) to investors. According to Attorney General Schneiderman’s lawsuit, Credit Suisse deceived investors as to the care with which they evaluated the quality of mortgage loans packaged into residential mortgage-backed securities prior to 2008. RMBS sponsored and underwritten by Credit Suisse in 2006 and 2007 have suffered losses of approximately $11.2 billion.

Attorney General Schneiderman’s complaint is the most recent enforcement action by the Residential Mortgage-Backed Securities Working Group, a state-federal task force created by President Obama earlier this year to investigate those responsible for misconduct contributing to the financial crisis through the pooling and sale of residential mortgage-backed securities. In October, Attorney General Schneiderman filed a Martin Act lawsuit against J.P. Morgan Securities LLC (formerly known as Bear, Stearns & Co. Inc.), JP Morgan Chase Bank, N.A., and EMC Mortgage LLC (formerly known as EMC Mortgage Corporation) for making fraudulent misrepresentations and omissions to promote the sale of residential mortgage-backed securities (RMBS) to investors.

“This lawsuit against Credit Suisse marks another significant step in our efforts to hold financial institutions accountable for the misconduct that led to the worst financial crisis in nearly a century,” said Attorney General Schneiderman. “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. 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.”

[NY AG OFFICE]

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