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Schneiderman Goes Martin Act On Credit Suisse
Posted By Joseph Spector On November 20, 2012 @ 3:02 pm In Other | Comments Disabled
Attorney General Eric Schneiderman filed a Martin Act complaint today suing Credit Suisse Securities for fraudulent residential mortgage-backed securities.
Schneiderman’s lawsuit is charging Credit Suisse with misrepresenting the loan quality review process, which deceived investors about the loan packages prior to 2008, Gannett’s Haley Viccaro reports. Credit Suisse did not evaluate or monitor the loans and left defects in the packages, Schneiderman alleged.
“This lawsuit against Credit Suisse marks another significant step in our efforts to hold financial institutions accountable for the misconduct that led to the worst financial crisis in nearly a century,” Schneiderman said in a statement.
Many of the loans in the mortgage-backed securities were provided for borrowers that were unable to repay them and likely to default. Credit Suisse misrepresented the loans in the residential mortgage-backed securities and did not follow guidelines, Schneiderman said.
The total losses for the securities by Credit Suisse in 2006 and 2007 was over $11.2 billion, which is about 12 percent of the total initial balances of $93.8 billion.
“We are a long way from wrapping this up,” Schneiderman said of investigation into mortgage fraud on a conference call with reporters.
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