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Roche sues Credit Suisse over bad securities

Drugmaker Roche has filed a lawsuit against Credit Suisse after two former directors of the bank sold the company $545 million (SFr553 million) in risky securities.

The lawsuit is one of several cases in the United States centring on the sale of securities backed by collateralised debt obligations or Auction Rate Securities, whose value collapsed during the credit crisis.

A Roche spokesman confirmed the ongoing litigation, first reported in French-language newspaper Le Temps. A spokesman from Credit Suisse said the bank would defend itself vigorously against the allegations.

The lawsuit named former Credit Suisse brokers Eric Butler and Julian Tzolov, who were accused earlier this year of buying securities backed by subprime mortgages and other risky debt in order to earn higher commissions while passing the products on to clients as low-risk securities backed by US-supported student loans.

Butler was convicted of fraud in August. Tzolov pled guilty to fraud charges and bail jumping one month earlier.

A US arbitrator in February ordered Credit Suisse to pay $406 million to a microchip-maker in a similar case.

Credit Suisse told Reuters on Tuesday the bank had lodged an appeal against that ruling. and agencies


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