Bloomberg News reports that Credit Suisse was ordered to face a potential $10 billion lawsuit by New York’s attorney general accusing the bank of fraud in sales of mortgage-backed securities before the recession.
A New York State Supreme Court judge rejected the bank’s request to dismiss the lawsuit. Attorney General Eric Schneiderman’s suit was valid and he had demonstrated the bank may have engaged in misconduct, the judge said in Wednesday’s ruling.
The ruling may strengthen Schneiderman’s hand in punishing other banks in the future over liability for the financial crisis.
Schneiderman sued Credit Suisse in November 2012, claiming the bank misrepresented the risks associated with mortgage-backed securities. Last year, the bank argued in a court hearing in Manhattan that New York missed a three-year deadline for suing. The state countered that it had six years to file its complaint.
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