Credit Suisse Reaches Mortgage Case Settlement with Ambac
Credit Suisse Group AG has reached settlement of a lawsuit filed by bond insurer Ambac Financial Group over misrepresentations on mortgage-backed securities that the later insurance in 2007, according to a source close to the deal.
In 2010, Ambac brought the lawsuit against Credit Suisse Securities along with affiliate DLJ Mortgage Capital for misleading the insurer on a pool of over 2,000 home equity credit lines with a principal balance of about 170 million dollars.
Credit Suisse has been being investigated by the government over issues related to mortgage-backed securities. The U.S. Attorney's Office in New Jersey is investigating the bank over mortgage-backed securities that Credit Suisse packaged and sold, according to a report from Reuters.
A case was also filed by New York Attorney General Eric Schneiderman against Credit Suisse as he accused the bank of misleading its investors who lost billions in mortgage-backed securities.
Terms and conditions agreed under the settlement were not disclosed to the public.