Credit Suisse Group AG (CS - Free Report) has applied for a dismissal of a lawsuit filed by New York Attorney General, Eric Schneiderman. The litigation accused the Zurich-based bank of misleading the investors regarding certain mortgage-backed securities that led to $11.2 billion in losses.
However, Credit Suisse declared that the Attorney General delayed in filing the complaint. Further, the bank alleged that the plaintiff did not precisely indicate its offense.
Earlier, in Nov 2012, the Attorney General accused the Swiss bank of misrepresentation of the quality of loans associated with the mortgage-backed securities, which were sponsored and underwritten by the bank in 2006 and 2007. However, Credit Suisse claimed that the charge was the same as other lawsuits filed previously.
Notably, in the same month, Credit Suisse made a settlement worth $120 million with the U.S. Securities and Exchange Commission (SEC) and the bank claimed that the present lawsuit repeated some of the claims addressed in that. Further, the bank claimed that the investors were well aware of the risky nature of the securities.
Credit Suisse also claimed that the complaint was debarred by a three-year statute of limitations and by the National Securities Markets Improvement Act of 1996, which prevents state securities laws. However, the Attorney General disputed that the statute spans for six years.
Schneiderman is co-chair of a state-federal task force including the SEC. The SEC is probing transgression and misrepresentations by many U.S. banking majors like JPMorgan Chase & Co. (JPM - Free Report) , Citigroup, Inc. (C - Free Report) and Wells Fargo & Company (WFC - Free Report) in the sale of mortgage-backed securities that led to the financial crisis.
Credit Suisse currently carries a Zacks Rank #5 (Strong Sell).