Allstate, which has already sued several banks, alleging that the banks sold Allstate mortgage-backed
insecurities which the banks knew to be hinky, has allded Credit Suisse to its list of targets.
Credit Suisse is the latest target of Allstate’s litigation over mortgage-backed securities. The company last month sued JPMorgan Chase & Co. over $700 million of the securities the bank sold the insurer; Citigroup Inc., over more than $200 million; and Deutsche Bank AG, over about $185 million. Allstate said the banks misrepresented underwriting standards, owner occupancy data and loan-to-value ratios.
“The systemic (but hidden) abandonment of the disclosed underwriting guidelines led to soaring default rates in the mortgage loans underlying the certificates,” Allstate said in the Credit Suisse complaint. “The value of Allstate’s certificates has plummeted, causing Allstate to incur significant losses. These losses were not caused by the downturn in the U.S. housing market, but by the defendants’ faulty underwriting.”
I tend to root for Allstate, but not by much. I suspect that no big corporate players in the high-falutin finance field have clean skirts.
But I sure as shootin’ want to see this go to trial.
The testimony in open court should be delicious.