Investment Banks Can't Escape FDIC Suit Over RMBS

Law360 (October 18, 2019, 8:20 PM EDT) -- A New York federal judge ruled Friday that investment banking units of Credit Suisse, Deutsche Bank and three other major European banks must face Federal Deposit Insurance Corp. claims over about $90 million in allegedly toxic crisis-era residential mortgage-backed securities bought by two now-failed community banks.

U.S. District Judge Laura Taylor Swain rejected the banks’ latest bid to dismiss the FDIC’s long-running securities suit that seeks to hold them responsible for RMBS investment losses suffered by Citizens National Bank of Texas and Strategic Capital Bank of Illinois, which collapsed and were placed into FDIC receivership in 2009.

The FDIC’s suit, which...

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