It is worth noting that Schneiderman’s predecessor as attorney general, now-Gov. Andrew Cuomo probed eight banks, including Credit Suisse, on whether they duped the credit agencies :
The New York attorney general has started an investigation of eight banks to determine whether they provided misleading information to rating agencies in order to inflate the grades of certain mortgage securities, according to two people with knowledge of the investigation.
The investigation parallels federal inquiries into the business practices of a broad range of financial companies in the years before the collapse of the housing market.
Where those investigations have focused on interactions between the banks and their clients who bought mortgage securities, this one expands the scope of scrutiny to the interplay between banks and the agencies that rate their securities.
The agencies themselves have been widely criticized for overstating the quality of many mortgage securities that ended up losing money once the housing market collapsed. The inquiry by the attorney general of New York, Andrew M. Cuomo, suggests that he thinks the agencies may have been duped by one or more of the targets of his investigation.
Credit Suisse had been recently sued by Schneiderman and accused bank of duping investors in RMBS according to the court filing. However, Cuomo didn’t direct lawsuits against the banks using the Martin Act:
Schneiderman’s predecessor as attorney general, now-Gov. Andrew Cuomo, did not file direct suits against the banks using the Martin Act, as Schneiderman has now done twice. The current AG was asked about this lapse of time.
“From our point of view, we started the investigation a few months after I took office, and first subpoenaed Credit Suisse last June. From my point of view, we proceeded as quickly as we possibly could,” Schneiderman said. “In the scheme of things, our office has moved very, very quickly and put a lot of resources into this and we continue to pursue this in cooperation with our colleagues.”