CNBC | January 18, 2017 Credit Suisse formally agreed to pay $5.3 billion to settle with U.S. authorities over claims it misled investors in residential mortgage-backed securities it sold in the run-up to the 2008 financial crisis, the U.S. Department of Justice said on Wednesday.
Zurich-based Credit Suisse will pay a $2.48 billion cash penalty and provide $2.8 billion in consumer relief, including loan forgiveness and financing for affordable housing, the Justice Department said in a statement.
"The bank concedes that it knew it was peddling investments that were likely to fail," Principal Associate Attorney General Bill Baer said in the statement.
Credit Suisse, which had announced the agreement in principle on Dec. 23, said in a statement it was "pleased to have reached an amicable settlement that allows the bank to put this legacy matter behind it."
Shares of Credit Suisse on the Swiss stock exchange closed down 2.5 percent at 15.28 Swiss francs, a steeper drop than the broader European banking sector.
In a statement of facts, Credit Suisse acknowledged it knew the loans it pooled into securities did not meet underwriting guidelines. Read more here.