Dublin, Ireland-based investment fund Phoenix Light SF Ltd. has reportedly filed a lawsuit against Zurich, Switzerland-based Credit Suisse Group AG over alleged misrepresentations in the offering of $362 million worth of mortgage-backed securities (MBS).
According to a Bloomberg News report, the alleged faulty MBS originated from five other investors that have since collapsed or nearly collapsed. Phoenix took over claims to the securities and then sold them to Credit Suisse from 2005 to 2007.
The suit filed in New York state court in Manhattan alleges that Credit Suisse Group made misrepresentations and omissions about the credit quality of the loans underlying the securities, according to the report. Offering documents also allegedly failed to disclose that Credit Suisse was privately betting that the securities would default.
The certificates "are now all rated at junk status or below and are essentially worthless investments, while defendants, on the other hand, have profited handsomely from their roles in structuring, marketing and selling the certificates," Phoenix says in its complaint.
For more, check out the Bloomberg News report.