According to the Appellate Division, First Department in New York, the state’s attorney general can move forward with his $11B investor fraud case against Credit Suisse (CS). The state appeals court decided that in this residential mortgage-backed securities lawsuit, a six-year statute of limitations and not a three-year one was applicable.
The civil case was brought in Manhattan Supreme Court four years ago. It accuses the several of the bank’s units of wrongly persuading investors to buy toxic residential mortgage-backed-securities in 2006 and 2007. The complaint states that 24% of Credit Suisse’s loans that were tied to RMBS from those two years were liquidated. Investors went on to sustain $11.2B in losses.
In a 3-2 ruling, the justice’s panel said that NY AG Eric Schneiderman’s fraud claims are ones that may have been brought prior to the writing of the statute. As a result, wrote the justices, the lengthier statute of limitations is to what this case is subject.
The court’s majority ruling upheld a decision made by Manhattan Supreme Court Justice Marcy Friedman two years ago when she rejected the Swiss bank’s motion to dismiss the case on the grounds of the staute of limitations issue. The majority of the court also determined that the complaint adequately alleges that the bank’s behavior included elements of common fraud to which the six-year statute of limitations is applicable.
Meantime, Credit Suisse is still contending with another mortgage fraud lawsuit, this one brought by the National Credit Union Administration for credit unions that bought billions of dollars in bond-backed mortgages. These unions went on to fail. Already has made NCUA tens of millions of dollars to settle similar claims.
Even though it’s been several years since the financial crisis of 2008, there are still civil and regular cases pending against Wall Street banks and other financial institutions that have yet to be resolved. The banks are being pursued for their alleged involvement in selling toxic mortgage-backed securities and residential mortgage-backed securities to many investors who proceeded to suffer losses.
If you believe you are an investor who has sustained investment losses due to the negligence of a financial representative or his/her firm, contact our MBS fraud law firm today. The SSEK Partners Group represents investors throughout the US.
Credit Suisse Must Face New York Mortgage Suit, Says Court, Bloomberg, December 13, 2016
Schneiderman Gets Green Light for Fraud Lawsuit Against Credit Suisse, New York Law Journal, December 13, 2016