The settlement announced on Friday would resolve claims in two
lawsuits filed in New York by the Federal Housing Finance Agency (FHFA),
the conservator since 2008 for the government-controlled mortgage
It is the ninth settlement that the FHFA has reached in litigation
that began in 2011, when it filed 18 lawsuits over some $200 billion
in mortgage-backed securities, an investment product at the center
of the recent global financial crisis.
The accord resolves claims pending in New York federal court against
Credit Suisse over $16.6 billion of securities sold to Fannie and
Freddie, and ends what the Swiss bank called the largest
mortgage-related investor litigation it still faced.
Credit Suisse will pay $234 million to Fannie Mae and $651 million
to Freddie Mac, the FHFA said.
So far, the FHFA has recovered more than $10.1 billion from banks
over similar securities.
This includes nearly $9.8 billion in settlements of litigation with
such banks as JPMorgan Chase & Co <JPM.N>, Citigroup Inc <C.N>,
Deutsche Bank AG <DBKGn.DE>, Morgan Stanley <MS.N> and Societe
The FHFA also reached a separate $335.2 million accord with Wells
Fargo & Co <WFC.N>, which it did not formally sue.
Many of the settlements were reached after a series of series of
court rulings that went against the banks.
Lawsuits remain pending against several other banks, including Bank
of America Corp <BAC.N>, Credit Suisse Group AG <CSGN.VX> and Royal
Bank of Scotland Group Plc <RBS.L>.
Credit Suisse said on Friday it will reduce previously reported
fourth-quarter and 2013 results by 275 million Swiss francs ($311.17
million) after taxes for the settlement, resulting in a
fourth-quarter net loss of 8 million Swiss francs.
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While Credit Suisse said the settlement resolves the biggest
mortgage case it faced, the bank still must deal with other mortgage
cases in the United States, including ones by the National Credit
Union Administration and attorneys general in New York and New
Credit Suisse is also one of 14 Swiss banks targeted by U.S.
prosecutors for helping wealthy Americans evade taxes. The bank has
said it is trying to settle that matter.
Last month, the Zurich-based bank agreed to pay $196.5 million and
admit wrongdoing to settle U.S. Securities and Exchange Commission
charges that it provided unregistered brokerage and investment
advisory services to U.S. clients.
The case is Federal Housing Finance Agency v. Credit Suisse Holdings
(USA) Inc. et al, U.S. District Court, Southern District of New
York, No. 11-06200.
(Reporting by Nate Raymond and Silke Koltrowitz;
editing by Elaine Hardcastle, Stephen Powell and Peter Galloway)
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