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The Zurich-based bank said a New York State
Supreme Court justice had last week rejected its request to
dismiss the case, in which New York Attorney General Eric
Schneiderman accuses the bank of misrepresenting the quality of
loans underlying residential mortgage-backed securities
sponsored and underwritten by Credit Suisse in 2006 and 2007.
Investors suffered $11.2 billion in losses on the securities,
according to Schneiderman's lawsuit, which stems from a joint
federal-state working group created by President Barack Obama to
go after wrongdoing that led to the 2008 financial crisis.
"We will appeal this particular decision and continue to defend
ourselves in this case," a spokeswoman for Credit Suisse in
Zurich said on Monday.
The U.S. government's examination of financial crisis-era
mortgage abuses is now Credit Suisse's biggest legal worry,
after it in May set aside a years-long U.S. probe into its
dealings with Americans evading taxes by pleading guilty to a
criminal charge and agreeing to pay more than $2.5 billion in
penalties.
U.S.-based rivals including Bank of America Corp <BAC.N>,
JPMorgan Chase & Co <JPM.N> and Citigroup Inc <C.N> have in
recent months reached settlements with the U.S. government over
charges they misled investors into buying troubled
mortgage-backed securities.
In October, Credit Suisse said it added a net 390 million Swiss
francs ($395 million) to its litigation provisions in the third
quarter, without saying what the provision was for.
(Reporting by Katharina Bart; Editing by David Holmes)
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