By Karen Freifeld
NEW YORK, Nov 19 (Reuters) - The New York attorney-general
is preparing to file a civil lawsuit against Credit Suisse for
misleading investors who lost billions of dollars on
mortgage-backed securities, according to a source familiar with
The lawsuit, which is expected to be filed on Wednesday,
will allege that Credit Suisse misrepresented the quality of
loans packaged in securities, according to the source.
Investors lost more than $11.2 billion, the source added.
Credit Suisse did not immediately respond to a request for
comment after business hours.
James Freedland, a spokesman for the Attorney-General Eric
Schneiderman, declined to comment.
Last month, Schneiderman filed a similar lawsuit against
JPMorgan Chase & Co over mortgage-backed securities packaged and
sold by Bear Stearns, the investment bank JPMorgan bought for
$10 a share in March 2008. That lawsuit claimed that investors
lost more than $22.5 billion on more than 100 securities.
Schneiderman's lawsuit was brought under the Martin Act, New
York's powerful securities fraud statute, which does not require
proof of intent to deceive.
It was the first action to come out of the working group
created by President Barack Obama to go after wrongdoing that
led to the financial crisis. Schneiderman is a co-chair of that
(Additional reporting by Andrew Longstreth)
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