New York’s attorney general is filing a civil lawsuit against Credit Suisse for misleading investors who lost billions of dollars due to mortgage-backed securities, reports reuters.com.
Read: SEC charges J.P. Morgan, Credit Suisse with misleading investors
The lawsuit is expected to be filed tomorrow. It alleges that Credit Suisse misrepresented the quality of loans packaged in securities, according to a source familiar with the matter, and investors lost more than $11.2 billion. Read more.
And in other Credit Suisse news, the Group says it’s overhauling its investment banking division and merging its private banking and wealth management arms to cut costs and satisfy regulators.
Switzerland’s second-largest bank, which has been shedding thousands of jobs to counter falling profits, announced the shakeups will take effect at the end of November.
Read: Credit Suisse cuts executive pay
Chief executive Brady Dougan says the bank “restructured our investment banking model resulting in a high returning, lower risk, client-oriented business. Our private banking model is highly scalable and suited for the new regulatory environment. And we have sharpened the focus of our asset management business.”
Last month, the bank said it would boost cost cutting as it posted a 63% fall in third-quarter profit following an accounting charge on its debt.