By John Letzing
ZURICH-- Credit Suisse Group AG has agreed to pay $885 million
to settle allegations by the U.S. Federal Housing Finance Agency
that the Swiss bank misrepresented mortgage-backed securities sold
in the lead-up to the financial crisis.
Zurich-based Credit Suisse said that because the settlement
agreement was reached before it filed financial results for last
year, it will take a related charge of 275 million francs ($312
million) for 2013. Accounting for the charge, the bank now is
reporting a net loss of eight million francs for the fourth quarter
of last year. Credit Suisse previously reported a profit of 267
million francs for the period.
The FHFA, the regulator for Fannie Mae and Freddie Mac, said in
a statement that the settlement with Credit Suisse resolves all
claims alleging the violation of securities laws in connection with
the sale of mortgage-backed securities to the government-controlled
mortgage finance companies.
The FHFA has sued a number of banks for allegedly
misrepresenting mortgage-backed securities sold in the years before
the financial crisis. Credit Suisse said Friday its settlement
covers claims relating to the sale of about $16.6 billion in
residential mortgage-backed securities between 2005 and 2007.
A number of other banks, including Credit Suisse rival UBS AG,
previously announced settlements with the FHFA. UBS said last July
that its settlement contributed to the bank taking a pretax charge
of about $744 million.
Write to John Letzing at john.letzing@wsj.com
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