(Reuters) — Credit Suisse has agreed to pay $495 million to settle a case related to U.S. mortgage-related investments, the latest payout related to past mistakes that have battered the Swiss bank’s reputation.
The lender has paid out billions of dollars to settle lawsuits linked to its mortgage-backed securities business before the 2008 financial crisis.
The decline in mortgage payments reduced the value of assets, leading to huge losses for investors.
Switzerland’s second-largest bank is trying to move on from these old issues, which have dogged its performance and cost it billions of dollars.
The bank is also trying to recover from other mistakes, including losing more than $5 billion from the collapse of investment firm Archegos last year, when it also had to freeze client funds linked to the late financier Greensill Capital.
The latest securities-backed mortgage case, brought by the New Jersey Attorney General, alleged that Credit Suisse had “misled investors and engaged in fraud or deceit in connection with the offering and sale of the RMBS.”
;The attorney general’s office had sought more than $3 billion in damages in a case filed in 2013.
“Credit Suisse is pleased to have reached an agreement that allows the bank to resolve the only remaining RMBS matter involving claims from a regulatory authority,” the bank said in a statement.
“The settlement, for which Credit Suisse is fully committed, marks another important step in the bank’s efforts to proactively resolve litigation and legacy issues.”
The New Jersey case was the largest of its remaining exposure to its legacy RMBS business, Credit Suisse said, with five remaining cases in various stages of litigation.
These are expected to be resolved within the next six months, a person familiar with the matter told Reuters. The total cost is likely to be much less than $100 million, the source added.
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