Credit Suisse sued over risky US investments
Swiss bank Credit Suisse is one of 17 financial firms being sued for violating United States laws in the sale of residential mortgage-backed securities.
Lawsuits were filed on Friday by the US Federal Housing Finance Agency against the firms for selling Fannie Mae and Freddie Mac billions of dollars of mortgage-backed securities that turned toxic when the housing market collapsed.
Among those targeted by the lawsuits were America’s biggest banks and several European banks.
Credit Suisse was being sued for $14.1 billion (SFr11.1 billion). The total price tag for the securities sold to Fannie and Freddie by the firms named in the lawsuits was $196 billion.
Residential mortgage-backed securities bundled pools of mortgages into complex investments. They collapsed after the property bust and helped fuel the financial crisis
in late 2008.
The Federal Housing Finance Agency filed a similar lawsuit in July against Switzerland’s other big bank UBS, seeking to recoup more than $900 million in losses from mortgage-backed securities.
The US agency oversees Fannie and Freddie, the two agencies that buy mortgages loans and mortgage securities issued by the lenders.
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