[Summary: Credit Suisse agrees to pay $495 million to settle a lawsuit filed against it in the US. Suit relates to the bank’s residential mortgage-backed security (RMBS) business before 2008. In 2013 case, New Jersey Attorney General claimed damages of more than $3 billion. Credit Suisse’s recovery attempts have been hindered by a number of legal scandals. The bank was convicted in June of failing to stop a Bulgarian cocaine trafficking gang. In October last year, Credit Suisse confessed to deceiving investors on an $850 million loan to Mozambique.]
Credit Suisse has agreed to pay $495 million to settle a lawsuit filed against it in the United States. This is the latest agreement resulting from prior mistakes that have damaged the reputation of the Swiss bank.
Concerning charges made by the New Jersey Attorney General concerning the bank’s residential mortgage-backed security (RMBS) business before 2008, Credit Suisse stated that it will make the settlement payment.
In relation to the offer and sale of RMBS, the attorney general’s office said that Credit Suisse “misled investors and engaged in fraud or deceit.”
In a 2013 case, the attorney general’s office claimed damages of more than $3 billion.
The bank said in a statement that it has reached an agreement that allows it to resolve the only remaining RMBS matter involving claims by a regulator and the largest of its remaining exposures on its legacy RMBS docket.
“The settlement, for which Credit Suisse is fully provisioned, marks another important step in the bank’s efforts to pro-actively resolve litigation and legacy issues.”
Axel Lehmann, chairman of Credit Suisse, pledged to reform the institution this week following a “terrible” 2021 in which it lost billions of dollars.
The second-largest bank in Switzerland is working to rebuild its public image after falling victim to a string of scandals, including losing more than $5 billion due to the collapse of investment firm Archegos last year, which compelled it to suspend client funds linked to failed financier Greensill Capital.
The bank, which is among the biggest in Europe and one of Switzerland’s most important banks globally, has been forced to raise capital, stop share buybacks, and reduce its dividend, but its recovery attempts have been hindered by a number of legal scandals.
A bank was convicted in June of failing to stop a Bulgarian cocaine trafficking gang from laundering money.
A Bermuda court ruled in March that Credit Suisse’s regional life insurance unit owed former Georgian Prime Minister Bidzina Ivanishvili and her family more than $500 million in damages.
In October last year, Credit Suisse confessed to deceiving investors on an $850 million loan to Mozambique meant to fund a tuna fishing fleet. As a part of the settlement, Credit Suisse will pay U.S. and British regulators $475 million.
Eight years after the Swiss bank paid a $2.6 billion tax evasion settlement, the U.S. Justice Department is still investigating whether Credit Suisse continued aiding American clients in hiding money from law enforcement.
On October 27, Credit Suisse, whose stock price has been more than cut in half over the past year, will reveal the findings of a much anticipated strategic review.