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The settlement, which was made last week, takes Credit Suisse a
step closer to wrapping up an expensive chapter linked to the
financial crisis a decade ago, although some civil claims remain
unresolved.
"Credit Suisse is pleased to have settled this legacy case," the
bank said in a statement, confirming the deal, though not what
it is paying in the pact with the New York State Attorney
General's office.
The source told Reuters on Monday the latest figure the Swiss
bank must pay related to U.S. mortgage-backed securities is in
the low, two-digit millions of dollars, confirming a weekend
report in Swiss newspaper Ostschweiz am Sonntag.
In what had been an $11 billion complaint filed in November
2012, then-New York Attorney General Eric Schneiderman accused
Credit Suisse of misrepresenting the quality of loans underlying
mortgage-backed securities it sold in 2006 and 2007.
The New York AG's office could not be reached for comment.
Credit Suisse shares were down 0.1 percent at 1145 GMT, while
the Stoxx Europe 600 Banking Index was down 0.5 percent.
Schneiderman had contended Credit Suisse's inappropriate
marketing of defective bonds resulted in heavy investor losses
when the global financial crisis struck.
In June 2018, however, New York State's highest court limited
the scope of the case, saying the claims were subject to a
three-year statute of limitations, not six years as Schneiderman
had wanted.
In a previous settlement of charges by the U.S. Department of
Justice, Credit Suisse agreed to pay $5.3 billion in fines and
consumer relief after the Zurich-based bank acknowledged home
loans it pooled into the securities did not meet underwriting
guidelines. The bank now says the total sum may come to half
that. [https://reut.rs/2VzMkxO]
Numerous other banks have paid billions to resolve federal and
state RMBS-related claims, including JP Morgan, Citi, Bank of
America, Morgan Stanley, Goldman Sachs and UBS.
Last May, Royal Bank of Scotland agreed to pay $4.9 billion to
settle a U.S. mortgages investigation. In March, it reached a
$500 million settlement with New York.
(Reporting by John Miller and Oliver Hirt; Editing by Kirsten
Donovan)
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