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Credit Suisse pays $495 million to settle legacy case

Credit Suisse facade
The Swiss bank said it had reached a final settlement with the New Jersey Attorney General © Keystone / Michael Buholzer

Credit Suisse has agreed to pay $495 million (CHF496 million) to settle a case brought against it in the United States, the latest pay-out related to past blunders that have battered the Swiss bank’s reputation.

Credit Suisse said it would make the pay-out to settle claims brought by the New Jersey Attorney General related to the bank’s residential mortgage-backed security (RMBS) business before 2008.

The attorney general’s office alleged that Credit Suisse had “misled investors and engaged in fraud or deceit in connection with the offer and sale of RMBS”.

“Credit Suisse is pleased to have reached an agreement that allows the bank to resolve the only remaining RMBS matter involving claims by a regulator and the largest of its remaining exposures on its legacy RMBS docket,” the bank said in a statementExternal link.

“The settlement, for which Credit Suisse is fully provisioned, marks another important step in the bank’s efforts to pro-actively resolve litigation and legacy issues.”

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String of scandals

Last month it was reported that the embattled Swiss bank was planning to cut around 10% of its workforce as part of a major cost cutting drive.

The scale of the potential job cuts came in the wake of a string of scandals and mounting legal fees. In June, Credit Suisse was convicted of failing to prevent money laundering by a Bulgarian cocaine trafficking gang in Switzerland’s first criminal trial of one of its major banks. The bank is appealing the verdict.

The bank is also still dealing with the impact of losses associated with the collapsed Archegos hedge fund and Greensill financial group.

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