0
0
Credit Suisse was accused on Thursday of having “learnt nothing” from the 2008 financial crisis on the first day of a trial at London’s High Court over residential mortgage-backed securities.
Loreley Financing, a special purpose vehicle set up by German bank IKB, is suing Credit Suisse over its 2007 purchase of $100 million of notes as part of a collateralised debt obligation transaction.
The Jersey-registered company said in court filings that it bought the notes because of Credit Suisse’s “false and dishonest representations” about their value.
Loreley also argues the allegedly false representations were part of a “systemic fraud” by the Swiss bank in relation to the securitisation of residential mortgage-backed securities (RMBS).
Credit Suisse denies that there was any fraud in relation to its RMBS business, saying in written arguments that Loreley’s case is “thoroughly implausible”.
Loreley’s lawsuit, which was filed in 2018, long pre-dates Credit Suisse’s takeover by its rival UBS last month.
Opening the case on Thursday, Loreley’s lawyer Tim Lord repeatedly referred to Credit Suisse’s $5.28 billion settlement with the U.S. Department of Justice, which was agreed in 2016 to settle claims it misled RMBS investors.
Lord said Credit Suisse’s defence to the lawsuit suggests the bank considers its conduct as set out in a statement of facts agreed with the DOJ was “acceptable banking practice”.
However, Credit Suisse argued in court filings that the settlement with the DOJ “makes no reference to dishonesty, fraud, knowing misrepresentation or anything of that kind”.
SOURCE:REUTERS
