Credit Suisse (CS) may be facing a probe by the Department of Justice over the company's sale of securities backed by residential mortgages, Reuters reported Friday, citing people familiar with the matter.
An investigation into the Zurich-based bank by the U.S. Attorney's Office in New Jersey is one of several investigations of banks underway by U.S. attorneys in several districts, according to the news service.
Attorney General Eric Holder said early last year that DOJ had issued subpoenas to 11 financial institutions in connection with their handling of residential mortgage-backed securities in the run-up to the financial crisis.
Credit Suisse already faces a series of lawsuits that stem from its underwriting of the securities. In November, New York Attorney General Eric Schneiderman sued the company, alleging it caused billions of dollars in losses suffered by investors as a result of its wrongdoing.
Schneiderman and Holder co-chair a federal-state working group that was formed last year to probe possible misconduct in the mortgage market. A source close to the working group told American Banker that the group is facilitating action by both state and federal officials.
Credit Suisse also is one of 17 banks being sued by the Federal Housing Finance Agency for alleged wrongdoing in the underwriting of mortgage-backed securities purchased by Fannie Mae and Freddie Mac.
The National Credit Union Administration sued Credit Suisse in October, charging the company with misleading three corporate credit unions about the riskiness of mortgages that backed securities Credit Suisse bundled and sold to them.
Matthew Reilly, a spokesman for the U.S. Attorney's office in New Jersey, declined to comment on a possible probe.
Credit Suisse spokesman Jack Grone also declined to comment.
A Department of Justice spokeswoman did not respond to a request for comment.
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