Credit Suisse Finalizes $5.3 Billion Deal With U.S. Over Pre-Crisis Mortgage Securities
January 18 2017 - 1:22PM
Dow Jones News
By Aruna Viswanatha
Credit Suisse Group AG finalized a $5.3 billion agreement to
resolve claims that it misled mortgage bond investors before the
2008 financial crisis, as the Obama administration wraps up a
number of crisis-era settlements in its final days.
The Swiss bank had reached the outlines of the accord in
December. In the settlement released on Wednesday, Credit Suisse
admitted in a 19-page "statement of facts" that it "repeatedly"
received information that the loans it was packaging into
securities didn't meet the standards it told investors they
met.
Top global banks have paid billions of dollars to resolve
similar allegations that they misled investors and helped fuel a
housing bubble in the mid-2000s and exacerbated the subsequent
collapse. Deutsche Bank AG completed a similar $7.2 billion accord
on Tuesday. Late last week, Moody's Corp. also agreed to pay $864
million to resolve claims related to bond grades on such
securities.
"Today's settlement underscores that the Department of Justice
will hold accountable the institutions responsible for the
financial crisis of 2008," Attorney General Loretta Lynch said.
The deal includes a $2.48 billion civil penalty, paid to the
U.S. Treasury, and $2.8 billion in help to struggling
borrowers.
Write to Aruna Viswanatha at Aruna.Viswanatha@wsj.com
(END) Dow Jones Newswires
January 18, 2017 13:07 ET (18:07 GMT)
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