The price the nation’s largest banks have had to pay for their involvement in the financial crisis has grown into quite a bill. By initiating a lawsuit against Credit Suisse (NYSE:CS) on Tuesday, New York Attorney General Eric Schneiderman added another charge to the list.
Schneiderman’s probe is part of a series of complaints brought by the Residential Mortgage-Backed Securities Working Group, a state-federal task force created by President Obama earlier this year to investigate the banks that were responsible for the crisis through their sales of residential mortgage-backed securities. The suit filed by Schneiderman alleges that Credit Suisse misled investors who purchased mortgage-backed securities from the bank between 2006 and 2007. In particular, Schneiderman said that the bank failed to adequately evaluate loans and ignored defects that its limited review did uncover.
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“This lawsuit against Credit Suisse marks another significant step in our efforts to hold financial institutions accountable for the misconduct that led to the worst financial crisis in nearly a century,” Schneiderman said in a press release. “Our investigations and legal actions demonstrate that there must be one set of rules for all – no matter how big or powerful the institution may be – and that those rules will be enforced vigorously.”
According to his statement, investors incurred losses of up to $11 billion from mortgage securities sponsored and underwritten by the Switzerland-based bank.