Exclusive: Credit Suisse probed over mortgages - sources
By Karen Freifeld and Alison Frankel
NEW YORK (Reuters) - U.S. federal and state authorities are investigating Credit Suisse AG over mortgage-backed securities packaged and sold by the bank, people familiar with the probe said on Thursday.
The Justice Department and the New York Attorney General are among those probing Credit Suisse's actions, according to the sources, who spoke on condition of anonymity.
A spokesman for Credit Suisse, Switzerland's second-largest bank, declined to comment.
Zurich-based Credit Suisse is the second bank known to be targeted by U.S. authorities probing how banks bundled mortgage loans into securities during the U.S. housing boom.
New York Attorney General Eric Schneiderman filed a civil fraud case against JPMorgan Chase & Co on Monday over mortgage-backed securities originated and sold by Bear Stearns.
The lawsuit accuses Bear Stearns of a "systematic abandonment of underwriting guidelines" and says that defects among loans sold to investors were largely ignored.
Creating and packaging defective loans for sale to investors helped cause the housing bubble and subsequent collapse.
The JPMorgan complaint was the first action to come out of a working group created by President Barack Obama earlier this year to go after wrongdoing that led to the 2008 financial crisis. JPMorgan, which bought Bear Stearns for $10 a share in March 2008, said in a statement it would contest the allegations. Continued...