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Credit Suisse Sued by Sealink Over Mortgage Securities

Credit Suisse Group AG (CSGN) was sued in New York state court by Sealink Funding Ltd. over its investment in $180 million worth of residential mortgage-backed securities.

Sealink accuses Zurich-based Credit Suisse of making material misrepresentations and omissions regarding the characteristics of mortgage loans that were pooled together into the securities, according to documents filed in New York state Supreme Court in Manhattan today.

Credit Suisse, Switzerland’s second-biggest bank, didn’t immediately respond to a phone message left on its media hotline in New York seeking comment on the lawsuit.

Sealink was created to manage Landesbank Sachsen AG’s riskiest assets after the German lender almost collapsed. It has filed lawsuits over investments in mortgage bonds against banks including Goldman Sachs Group Inc., Deutsche Bank AG, Bank of America Corp. and JPMorgan Chase & Co.

Pools of home loans securitized into bonds were a central part of the housing bubble that helped send the U.S. into the biggest recession since the 1930s. The housing market collapsed, and the crisis swept up lenders and investment banks as the market for the securities evaporated.

The case is Sealink Funding Ltd. v. Credit Suisse Holdings (USA) Inc., 652962/2012, New York State Supreme Court, New York County (Manhattan).

To contact the reporter on this story: Chris Dolmetsch in New York at cdolmetsch@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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