Exclusive: Credit Suisse probed by U.S. over mortgages - sources
By Karen Freifeld and Alison Frankel | October 5, 2012 6:42 AM EST
U.S. federal and state authorities are investigating Credit Suisse AG over mortgage-backed securities packaged and sold by the bank, people familiar with the probe said on Thursday.
A spokesman for Credit Suisse, Switzerland's second-largest bank, declined to comment.
Zurich-based Credit Suisse is the second bank known to be targeted by U.S. authorities probing how banks bundled mortgage loans into securities during the U.S. housing boom.
The JPMorgan complaint was the first action to come out of a working group created by President Barack Obama earlier this year to go after wrongdoing that led to the 2008 financial crisis. JPMorgan, which bought Bear Stearns for $10 a share in March 2008, said in a statement it would contest the allegations.
The nature of the investigation of Credit Suisse was not immediately known. However, private parties have filed lawsuits against the bank claiming that it misrepresented the quality of mortgages underlying securities it sold.
The U.S. Securities and Exchange Commission subpoenaed mortgage-related documents from Credit Suisse, bond insurer MBIA Inc disclosed in a court filing in May 2011.
The New York attorney general's office declined to comment. The Justice Department did not immediately return calls and emails seeking comment. An SEC spokesman declined comment.
The Residential Mortgage-Backed Securities Working Group was formed to probe the pooling and sale of risky mortgages in the run-up to the 2008 financial crisis.
Obama said he created the group to "hold accountable those who broke the law" and to "help turn the page on an era of recklessness".
(Reporting by Karen Freifeld and Alison Frankel; Editing by Eddie Evans, Bernard Orr)
Most Popular Slideshows
- Taylor Swift Named Forbes' Second Highest Paid Country Musician [PHOTOS]
- Forever Lost: Indescribable Anguish for Malaysia Airlines MH17 Families, Remains of Some Victims May Never Be Found (PHOTOS)
- Celebrities Who Got Pregnant Using IVF: Busting the Myths About IVF
- PageSix: Beyonce & Jay Z Union is Not About Love, All About Business & the Brand
Join the Conversation
- Tourre on stand says email in SEC case 'not accurate'
- Syrian authorities blocking access to needy in Homs - Red Cross
- Faith in European Union at low ebb, EU poll says
- Former UBS banker gets 18 months, $1 million fine, for muni bid-rigging scheme
- U.S. judge halts challenges to Detroit's bankruptcy bid
- Freshly Leaked Apple iPad Air 2 Cases Confirm Touch ID Sensor; Release Date, Limited Specs and Price Listed
- Moto X Android 4.4.4 KitKat Update Guide: Schedule and How to Install
- Top 4 Reasons Why iPhone 6 Will Hit Big Soon After its Sept 2014 Release Date
- Top Surprising Features Of iOS 8
- Twin Malaysia Airlines MH370, MH17 Aviation Disasters Create Phobia Among Travellers
- OnePlus One vs. Moto X+1 – Early Specifications, Release Date and Price Faceoff
- 2014 Ebola Outbreak: ‘Out of control… and Can Get Worse'; Asky Airline Stops Flying to Liberia, Sierra Leone; Liberia Closes Schools