For the second time in as many days, the Department of Justice announced that it reached a multi-billion dollar settlement with a foreign-based bank over its mortgage securitization practices leading up to the housing crisis.
On Tuesday, the DOJ announced that it reached a $7.2 billion settlement withDeutsche Bank in connection with the bank’s issuance and underwriting of residential mortgage-backed securities between 2005 and 2007.
Now, it’s Credit Suisse’s turn.
As with Deutsche Bank, Credit Suisse announced in late December that it reached a settlement in principle with the DOJ, but Wednesday, the DOJ made it official.
According to the DOJ, Credit Suisse will pay $5.28 billion in the settlement, which relates to the packaging, securitization, issuance, marketing and sale of residential mortgage-backed securities between 2005 and 2007.
Under the terms of the settlement, Credit Suisse will pay $2.48 billion as a civil penalty under the Financial Institutions Reform, Recovery and Enforcement Act.
Credit Suisse has placed five employees on leave while it carries out an internal investigation related to tax matters, the Swiss bank said on Sunday.
Swiss newspaper SonntagsZeitung reported earlier the bank’s action was in connection with a U.S. investigation into Credit Suisse’s Israeli unit over possible tax evasion.
“Credit Suisse is carrying out an internal investigation relating to tax matters,” the bank said in a statement. “The review is focusing on employee conduct.”
Citigroup Inc. bought a multibillion-dollar book of credit derivatives from Credit Suisse Group AG during the second quarter of this year, in another sign of European banks unloading risk.
Switzerland’s Credit Suisse disclosed the sale of a portfolio comprising around 54,000 credit derivative trades in its second quarter results on July 28. The book was sold to Citigroup, according to a person familiar with the matter. Bloomberg reported Citigroup’s purchase earlier on Friday.
A spokesperson for Citigroup Inc. declined to comment.
The move comes amid a broad shift in investment banking, with many European banks scaling back capital-intensive trading businesses and better capitalized U.S. lenders often stepping in to buy them.
J.P. Morgan Chase & Co. also showed interest in buying the Credit Suisse book, according to two people familiar with the matter.
For Credit Suisse, the sale was part of a broader reshaping of its business as the bank looks to dial back on volatile investment banking and boost wealth management.
ZURICH?U.S. authorities are investigating Credit Suisse Group AG’s operations in Israel, people familiar with the matter said, once again placing the Swiss bank under Justice Department scrutiny related to its handling of American clients.
The Justice Department recently notified Zurich-based Credit Suisse of the investigation, which is focused on determining whether employees in Israel helped dual Israeli and U.S. citizens conceal their U.S. status to evade American taxes, the people said.
Information about foreign banks’ clients who are identified as American must now be automatically transmitted to U.S. tax authorities, under the recently-implemented U.S. Foreign Account Tax Compliance Act.
Five major banks and four traders were sued on Wednesday in a private U.S. lawsuit claiming they conspired to rig prices worldwide in a more than $9 trillion (£6 trillion) market for bonds issued by government-linked organisations and agencies.
Bank of America Corp (>> Bank of America Corp), Credit Agricole SA (>> CREDIT AGRICOLE), Credit Suisse Group AG (>> Credit Suisse Group AG), Deutsche Bank AG (>> Deutsche Bank AG) and Nomura Holdings Inc (>> Nomura Holdings, Inc.) were accused of secretly agreeing to widen the “bid-ask” spreads they quoted customers of supranational, sub-sovereign and agency (SSA) bonds.
The lawsuit filed in Manhattan federal court by the Boston Retirement System said the collusion dates to at least 2005, was conducted through chatrooms and instant messaging, and caused investors to overpay for bonds they bought or accept low prices for bonds they sold.
Law360, New York (March 29, 2016, 10:25 PM ET) — Multiple Credit Suisse Group units on Tuesday asked a New York appeals court to find New York Attorney General Eric Schneiderman’s residential mortgage-backed securities lawsuit over $11.2 billion in investor losses to be time-barred, citing precedent from New York’s highest court.
Schneiderman sued the bank in 2012 under New York’s Martin Act, a broad anti-financial fraud statute, accusing Credit Suisse “deceived investors” about the quality of mortgages included in the securities and the care with which the bank evaluated them, both before and after investors purchased…
Suit by Alaska pension fund can proceed to trial, judge rules
Bank of America, Barclays accused of rigging ISDAfix rate
Bank of America Corp., Barclays Plc and a dozen more banks must face investor claims that they rigged a benchmark used in the sales of interest-rate derivatives and other financial instruments.
U.S. District Judge Jesse Furman in Manhattan Monday rebuffed the banks’ request to throw out antitrust lawsuits accusing the institutions of colluding to set ISDAfix, affecting trillions of dollars of financial instruments. The rate is used to set prices on interest-rate swap transactions, commercial real-estate mortgages and other securities.
An Alaska pension fund and other investors raised “plausible allegations that a conspiracy among the defendants existed,” Furman said in a 36-page ruling. He allowed antitrust and breach-of-contract contract claims to proceed to trial, while throwing out other allegations.
Starting in 2009, the banks used electronic chat rooms and other means of private communication to set ISDAfix, typically submitting identical rate quotes, investors said in their suit. They are seeking billions in losses tied to the alleged rate-fixing scheme.
John Yiannacopoulos, a Bank of America spokesman, had no immediate comment on Furman’s ruling. Kerrie Cohen, a Barclays spokeswoman, declined to comment.
Investors also named as defendants Deutsche Bank AG, BNP Paribas SA, HSBC Holdings Plc, Royal Bank of Scotland Group Plc, Credit Suisse Group AG, UBS AG, Goldman Sachs Group Inc., Nomura Holdings Inc., Wells Fargo & Co. and JPMorgan Chase & Co.
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Tagged Banks, BNP Paribas, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JP Morgan Chase, Normura Holdings, RBS, UBS, Wells Fargo
Bank will pay $29 million to failed credit unions
The National Credit Union Administration announced earlier this week that it reached a $29 million settlement with Credit Suisse over losses related to several corporate credit unions’ purchases of faulty residential mortgage-backed securities in the run-up to the financial crisis.
Credit Suisse becomes the latest to settle with the NCUA over the failure of Members United Corporate Federal Credit Union and Southwest Corporate Federal Credit Union.
In 2013, the NCUA filed suit against Royal Bank of Scotland, Morgan Stanley and eight other institutions over the sale of nearly $2.4 billion in mortgage-backed securities to U.S. Central Federal Credit Union, Western Corporate Federal Credit Union, Members United Corporate Federal Credit Union and Southwest Corporate Federal Credit Union.
In October 2015, Barclays and Wachovia, now a part of Wells Fargo, said they would pay a total of $378 million to NCUA as part of two separate settlements stemming from losses related to purchases of residential mortgage-backed securities.
In September 2015, RBS agreed to a $129.6 million settlement with the NCUA over similar claims. And in December 2015, Morgan Stanley agreed to pay $225 million to settle as well.
WASHINGTON (AP) — Two major global banks, Barclays and Credit Suisse, will pay a combined $154.3 million to settle state and federal investigations that they misled clients about the safety of trading on their “dark pool” financial exchanges, the New York Attorney General’s office expects to announce Monday.
The banks left their customers on these private exchanges vulnerable to “predatory, high-frequency traders” that could intercept their financial trades, despite assurances by Barclays and Credit Suisse to the contrary, according to a draft statement obtained by The Associated Press that announces the joint settlement with New York and the U.S. Securities and Exchange Commission.
“These cases mark the first major victory in the fight to combat fraud in dark pool trading,” said New York Attorney General Eric Schneiderman in the statement. “We will continue to take the fight to those who aim to rig the system and those who look the other way.”
Zurich-based Credit Suisse, a major firm on Wall Street, declined comment.