Credit Suisse wins London lawsuit over RMBS-linked notes
Credit Suisse on Friday won a lawsuit at London’s High Court over the sale of $100 million (CHF90.47 million) of notes linked to residential mortgage-backed securities.
Loreley Financing, a special purpose vehicle set up by German bank IKB, sued Credit Suisse over its 2007 purchase of the notes as part of a collateralised debt obligation transaction.
The Jersey-registered company argued at a trial starting in April that it bought the notes because of Credit Suisse’s “false and dishonest representations” about their value.
+ Read more: Credit Suisse’s legal problems regarding bond write-downs
Loreley also argued the allegedly false representations were part of a “systemic fraud” by the Swiss bank in relation to the securitisation of residential mortgage-backed securities (RMBS).
But Credit Suisse – now owned by UBS – denied that there was any fraud in relation to its RMBS business, describing Loreley’s case as “thoroughly implausible”.
Judge Sara Cockerill ruled in Credit Suisse’s favour on Friday, saying there was no evidence to support the case of systemic fraud beyond “isolated documents”.
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