Credit Suisse Group AG has been sued by a large Dutch pension fund that claimed the Swiss bank misled it about the quality of residential mortgage-backed securities it bought, resulting in "substantial" losses.
Stichting Pensioenfonds ABP, which said it invests 250 billion euros ($324 billion) and is one of the world's three largest pension funds, said it bought the securities between 2005 and 2007.
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It said Credit Suisse made "multiple and material misrepresentations" in its offering documents, having known that the securities were riskier than advertised and that many of the underlying loans were improperly underwritten.
ABP said the default rates have reached double digits on loans underlying nearly all of the securities it bought. Many of the once "triple-A" rated securities now carry junk grades, and are worth as little as 33 cents on the dollar, it said.
The defendants include several Credit Suisse affiliates and executives, and "made the misleading statements with an intent to defraud ABP," the 135-page complaint filed Thursday in the New York State Supreme Court in Manhattan said.
ABP wants to rescind its purchases and recoup its losses.
Credit Suisse spokesman Steven Vames had no immediate comment. The amount of losses that ABP suffered was not immediately clear, and a lawyer for the company did not immediately return a call seeking comment.
Banks such as Credit Suisse face many lawsuits accusing them of selling defective mortgage-related securities. Losses on such securities were a cause of the 2008 financial crisis.
The case is Stichting Pensioenfonds ABP v. Credit Suisse Group AG et al, New York State Supreme Court, New York County, No. 653665/2011.