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Credit Suisse unit pays MBIA Insurance $600M in MBS lawsuit settlement

MBIA Insurance Corp. and Credit Suisse Securities (USA) LLC have agreed to settle a 2009 lawsuit over property debt, leading to its dismissal.

Under the settlement, MBIA Insurance received $600 million from the Credit Suisse Group AG unit after a court awarded the MBIA Inc. unit about $604 million in damages.

MBIA Insurance alleged in the lawsuit that it had to pay hundreds of millions of dollars in claims due to Credit Suisse Securities' "pervasive and material misrepresentations" about mortgage-backed securities.

In November 2020, a judge ordered the parties in the lawsuit to submit an estimate of the damages related to the mortgages. Credit Suisse said it had made provisions of $300 million as it expected that the order could lead to a $680 million judgment against it.