U.S. federal and state authorities are investigating Credit Suisse AG (CS) over mortgage-backed securities packaged and sold by the bank, people familiar with the probe said on Thursday.
Reuters reports that the Justice Department and the New York attorney general are among those probing Credit Suisse’s actions.
A spokesman for Credit Suisse, Switzerland’s second-largest bank, declined to comment. It is the second bank targeted by U.S. authorities probing how banks bundled mortgage loans into securities during the housing boom.
A former Credit Suisse Group AG executive is facing charges after being accused of inflating the value of mortgages linked to bonds backed by home loans
New York AG Eric Schneiderman filed a civil fraud case against JPMorgan Chase (JPM) on Monday over mortgage-backed securities originated and sold by Bear Stearns.
The details of the investigation of Credit Suisse are not known, Reuters says. However, lawsuits by pension funds, insurers and others against the bank claim it misrepresented the quality of mortgages underlying securities it created and sold. Loans were allegedly issued on the basis of inflated appraisals and overstated incomes.
