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US appeals court revives MBS suit against 5 European banks

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US appeals court revives MBS suit against 5 European banks

A U.S. appeals court on Jan. 18 reinstated an MBS lawsuit brought by the Federal Deposit Insurance Corp. against five European banks, Reuters reported the same day.

The suit, against Credit Suisse Group AG, UBS Group AG, HSBC Holdings Plc, Deutsche Bank AG and Royal Bank of Scotland Group Plc, relates to the sale of $140.5 million in MBS in the run-up to the 2008 financial crisis.

The 2nd U.S. Circuit Court of Appeals in New York overturned a March 2015 decision by a U.S. District Judge, who dismissed the lawsuit on the grounds that the FDIC had waited too long to sue the lenders. The lawsuit was originally filed by the regulator in 2012 on behalf of failed lenders Strategic Capital Bank and Citizens National Bank, Reuters noted.

The U.S. Supreme Court recently rejected a petition by several banks to review a May 2016 ruling by another panel of the same appellate court that revived a similar lawsuit by the FDIC over mis-sold MBS.