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20th-Jan-2017

US announces $5.3b settlement with Credit Suisse

By AFP, Washington


US authorities on Wednesday announced a $5.28 billion settlement with the European banking giant Credit Suisse, adding to the list of loose ends being wrapped up as Washington prepares to install a new president.
Wednesday's settlement with Credit Suisse confirms the announcement the bank made last month that it had reached an agreement with Washington over its role in the sale of the kind of toxic securities that led to the global financial crisis of 2008.
The US Justice Department had announced a similar deal with the German lender Deutsche Bank on Tuesday.
Federal prosecutors say Credit Suisse has admitted that between 2005 and 2007 it knowingly deceived investors in the sale of complex securities derived from residential mortgages.
The system-wide failure of such securities in 2008 caused a cascading wave of bankruptcies and crises that touched off the Great Recession, which cost tens of millions of jobs around the world.
According to the Justice Department, Credit Suisse employees knowingly packaged poor quality loans for sale, referring to them in some instances as "utter, complete garbage" and "complete crap."