Monday, March 10, 2014
The New York Times reports today in its business section about litigation brought in a Massachusetts state court by an investment firm against a number of major mortgage companies which it says misrepresented the quality of the mortgages used to back up bonds sold to the investment firm. Most of the lenders have settled but Credit Suisse denies liability. Today's story reports on discovery materials that have been made public including internal emails between Credit Suisse executives in which they complain about the poor quality of the mortgages their sales people were originating. The emails certainly seem incriminating although as with any litigation, it's important to get the whole story before drawing conclusions. Still, the release of these emails that were written in 2006 and 2007 only now begs the question of why weren't they discovered by and acted upon by government regulators in the interim.