Credit Suisse has been ordered to stand for a $10 billion lawsuit filed by New York’s attorney general. The lawsuit accuses the bank of committing fraud in its sale of mortgage-backed securities in the years leading up to the 2008 financial crisis.
The New York State attorney general had been fighting the bank’s attempt to have the case dismissed. Credit Suisse’s attempts to shirk its responsibility were for naught, however, as the New York State Supreme Court (New York’s appellate-level court) denied the bank’s motion to dismiss the case.
Commentators expect that the NY Supreme Court’s decision to to deny Credit Suisse’s dismissal request will provide the NY attorney general’s office greater leverage in negotiating and prosecuting with other banks responsible for corrupt and damaging behavior leading to the Great Recession.
Around the globe, banks are being prosecuted for their reckless and deceptive behaviors leading into the 2008 financial crisis. These lawsuits and legislative efforts have resulted in large-scale efforts to bring greater accountability to the banks for the damages they cause to consumers.
Many fear that fines and large settlements with banks are not enough to deter the banks from continuing to engage in reckless and greedy behaviors that often pit them against their customers. Often, the fines levied against the banks and settlements they enter into as a result of litigation are merely seen as costs of doing business by the banks and their shareholders.
While the settlements are something, more needs to be done to pursue personal liability on the part of the traders and bankers behind the dangerous tactics that have hurt so many, so dearly.
|Joshua is a writer and researcher with Ring of Fire. You can follow him on Twitter @Joshual33.