Credit Suisse Enters into Auction-Rate Securities Settlement with Regulators


A settlement, in principle, has been reached between a state auction-rate securities task force and Credit Suisse which would require the investment bank to buy back approximately $550 million in auction-rate securities. In addition, the firm will pay a $15 million fine. The investigation of Credit Suisse was lead by the North Carolina Secretary of State and Securities Commissioner.

The settlement is similar to other settlements previously entered into and is limited to retail investors (defined as individuals, charitable organizations and small businesses holding $10 million or less in investments at the firm). Credit Suisse has also agreed to reimburse retail customers for losses sustained if they sold auction-rate securities and to participate in a special arbitration proceeding with retail customers who claim to have suffered consequential damages. The firm will also undertake to assist institutional investors find liquidity solutions.

Credit Suisse’s settlement follows on the heels of earlier settlements made by the regulators with UBS, Citigroup, JP Morgan, Morgan Stanley, Merrill Lynch, Goldman Sachs, Wachovia, Fidelity, Deutsche Bank and Bank of America.

The precise terms of the settlements won’t be known until formal agreements are signed. Investors affected by these settlements should carefully analyze the final agreements.

Page Perry is an Atlanta-based law firm with over 125 years collective experience representing investors in securities-related litigation and arbitration. While past results are not indicative of future success, Page Perry’s attorneys have recovered over $1,000,000 for clients on more than 30 occasions. Page Perry’s attorneys are actively involved in representing institutional and individual investors in auction-rate securities cases. For further information, please contact us.