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
- Typhoon Rammasun Claims 18 Lives in China, Incurs $4.32B Losses (PHOTOS)
- Malaysia Airlines MH17: Vital Black Boxes Finally Land in Hands of Malaysian Authorities, Rebels Announce Ceasefire (PHOTOS/VIDEOS)
- Kate Middleton's Pregnancy Hearsays: Possible Evidence Revealed [PHOTOS]
- Selena Gomez Turns 22 Today, Celebrates Early without Justin Bieber: Top 12 Interesting Facts About the Singer [SEE PHOTOS]
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
- Fresh Leak Hints iPhone 6 Price and Release Date; 4.7-Inches iPhone 6 Sapphire Display Scratched in Test; New Spigen Cases Out
- iPhone 6 2014 Release Date Very Soon as Apple Orders 120M New iPhones from Foxconn – Report
- Google Nexus 6 on Release Date Will Sport 2K Display Panel & Lower Price Tag – Report
- Motorola Moto G Vs. Xiaomi Mi3 – Low in Price, High -level Features
- FCC Approves Sony Xperia Z3 for U.S. Market
- Killer Xiaomi Mi4 at $369 Likely to Come With 5.0-Inch Display, Snapdragon 801 Processor, 3GB RAM and More
- Sony PlayStation 4 Outsells a Resurgent Xbox One in June