Credit Suisse Agrees to Pay $495M to Settle New Jersey Mortgage Bond Case

By Scott Kanowsky 

Investing.com -- Shares in Credit Suisse Group AG (SIX:CSGN) rose on Monday after the lender announced that it agreed on a $495 million settlement with authorities in the U.S. state of New Jersey in a case regarding debt instruments that were at the center of the financial crisis in 2007 and 2008.

In a statement, the Swiss bank said it will make a one-time payment to resolve claims first brought against it by the New Jersey attorney general in 2013.

The prosecutors initially called for more than $3 billion in damages when they filed the case over the sale of Credit Suisse's residential mortgage-backed securities (RMBS) dating back to before 2008.

"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.

It added that it is fully provisioned for the settlement, which it described as an "important step" in its efforts to resolve legacy litigation issues. The lender has put aside CHF 3.9 billion in provisions over the past two years to address its ongoing legal issues.

The Financial Times reports that Credit Suisse said it has five RMBS cases left to bring to a close