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Credit Suisse pays $495 million to settle its legacy case

ZURICH Credit Suisse has reached an agreement to settle for $495million in settlement of the case by the United States, the latest payment relates to past mistakes that have damaged the Swiss bank’s image.

Credit Suisse said it would pay out the money to settle claims filed by Attorney General New Jersey Attorney General related to the bank’s residential mortgage-backed securities (RMBS) business prior to 2008.

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The attorney general’s office claimed the fact that Credit Suisse had “misled investors and engaged in fraud or deceit in connection with the offer and sale of RMBS.”

The office of the attorney general had filed a claim for the sum of $3 billion as damages from a lawsuit that was filed in 2013.

“Credit Suisse is pleased to have reached an agreement that allows the bank to resolve the only remaining RMBS matter involving claims by a regulator and the largest of its remaining exposures on its legacy RMBS docket,” the bank said in its statement.

“The settlement, for which Credit Suisse is fully provisioned, marks another important step in the bank’s efforts to pro-actively resolve litigation and legacy issues.”

The chairman of Credit Suisse Axel Lehmann last week pledged to revamp the bank following the “horrible” 2021 in which it suffered billions of dollars in losses.

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The second-largest bank in Switzerland is trying to come back from a string of scandals, which included losing over $5 billion in the collapse of investment company Archegos last year. During that time, it also had to halt client funds tied to the an insolvent financier Greensill Capital.

The bank, which is among the biggest in Europe and among the most important banks in the world system required in recent times to boost capital levels, stop share buybacks , and reduce the dividend, but its efforts to rebuild have been hindered by a series criminal scandals.

In June the bank was found guilty of failing to stop money laundering carried out by the Bulgarian cocaine trafficking group.

A Bermuda court in March ruled that the former Georgian Premier Bidzina Ivanishvili as well as his family were entitled to damages in excess of one billion dollars. the Credit Suisse’s local life insurance division.

In October of last year, Credit Suisse pleaded guilty to defrauding investors in connection with the loan of $850 million to Mozambique intended to finance an entire tuna fishing fleet. The company will pay U.S. and British regulators $475 million to settle the matter.

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It is also investigating whether the U.S. Justice Department is conducting an investigation to determine if Credit Suisse continued helping U.S. clients conceal assets from the authorities, 8 years ago, after the Swiss bank settled the $2.6-billion tax settlement for tax evasion.

Credit Suisse, whose share price has more than doubled over the past year will announce the details of a highly sought-after strategic review along with third-quarter results on October. 27.

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