Insurer Hits Credit Suisse With $250M MBS Fraud Suit

Law360, New York (April 3, 2013, 3:24 PM EDT) -- Financial Guaranty Insurance Co. on Tuesday slapped Credit Suisse Securities LLC and an affiliate with a fraud suit in New York state court over $250 million in mortgage-backed securities it agreed to insure, alleging that the financial services giant misrepresented the quality of the loans.

Credit Suisse tricked the insurer into issuing a policy in 2006 guaranteeing payments on the securities by promising that the loans were issued to borrowers with a low risk of default, but the company actually securitized loans it knew were defective...
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