Sept. 26 (Bloomberg) -- Credit Suisse Group AG was sued in New York over $359 million worth of residential mortgage-backed securities by an entity that manages distressed debt.
Royal Park Investments SA/NV filed the suit in state Supreme Court in Manhattan yesterday, accusing Switzerland’s second-largest bank of making false and misleading statements in documents and information used to market the securities, which were sold from 2005 to 2007, according to a complaint.
“The offering documents further failed to disclose that, at the same time defendants were offering the certificates for sale to plaintiff, they were privately betting that similar certificates would soon default at significant rates,” Royal Park said in the suit. “Defendants used these offering documents to defraud plaintiff and its assignors into purchasing supposedly ‘investment grade’ certificates at falsely inflated prices.”
Royal Park Investments was set up in May 2009 by Belgian bank Fortis, the Belgian government and French bank BNP Paribas SA to manage a pool of distressed debt securities. Zurich-based Credit Suisse and Texas-based Lone Star Funds agreed to pay 6.7 billion euros ($8.7 billion) for Royal Park’s assets in April.
Royal Park has filed similar suits against other banks in the same court over residential mortgage-backed securities over the past two years, including Bank of America Corp. and Deutsche Bank AG.
Drew Benson, a spokesman for Credit Suisse in New York, declined to comment on the lawsuit.
The case is Royal Park Investments SA/NV v. Credit Suisse AG, 653335/2013, New York State Supreme Court,
To contact the reporter on this story: Chris Dolmetsch in New York State Supreme Court in Manhattan at
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