Credit Suisse defrauded investors of more than $1bn by misrepresenting the risks of its residential mortgage-backed securities, acting New Jersey Attorney General John J. Hoffman said in an interview.
Bloomberg reports that Hoffman’s office sued Credit Suisse over claims it misled investors about the risk involved in more than $10bn in securities issued in 2006 and 2007, before the housing market collapsed. The lawsuit follows one by New York Attorney General Eric Schneiderman, who claimed last year that the bank misled investors about its review of mortgages underlying securities.
'Credit Suisse was greedy and irresponsible,' Hoffman said Wednesday. 'The losses are in excess of $1bn and likely in the billions'.
Credit Suisse faces other state and federal investigations that could lead to a consolidation of claims filed by governments, Hoffman said.
'This complaint is without merit', Drew Benson, a Credit Suisse spokesman, said in an e-mail. 'It recycles baseless claims and uses inaccurate and exaggerated figures. We look forward to presenting our defence in court'.
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