On June 29, 2012, the U.S. District Court in the Southern District of New York granted class certification in a lawsuit against Credit Suisse Securities (USA) LLC arising out statements the bank made regarding the quality of loans comprising a 2006 offering of $642 million in mortgaged-backed securities. The lawsuit alleges that Credit Suisse failed to advise investors that loans issued by IndyMac Bank forming the core of the securities were issued without proper underwriting controls, including verification of borrowers’ income, assets and job status.

The District Court held that class treatment was appropriate because of the high number of claimants, and because each individual investor’s claim was similar. The District Court rejected the defendants’ argument that more sophisticated investors were aware of IndyMac’s “deviation from its underwriting guidelines.” IndyMac and two ratings agencies that reviewed the deal were previously dismissed from the case in 2010. (“Credit Suisse To Face $642M MBS Suit As Class Action,” Law360.com, July 2, 2012).