| NEW YORK, June 23
NEW YORK, June 23 Credit Suisse Group AG
has withheld many key documents from MBIA Inc
in a lawsuit accusing the Swiss bank of lying about how it
processed loans used in mortgage-backed securities, and it
should be ordered to review whether it has more evidence
suggesting misconduct, the bond insurer said.
In a filing in New York state court on Monday, MBIA objected
to what it called Credit Suisse's failure to turn over "some of
the hottest documents" in the 4-1/2-year-old lawsuit, on the
ground that they were "non-responsive."
MBIA, based in Armonk, New York, said it learned of the
documents only in the last few months, after a court told Credit
Suisse to turn over deposition transcripts from other U.S. cases
involving similar claims.
Credit Suisse spokesman Drew Benson declined to comment.
The dispute stemmed from a December 2009 lawsuit in which
MBIA accused Credit Suisse of fraudulently deceiving it into
participating in a mortgage-backed securities transaction that
quickly soured, causing the insurer to pay more than $296
million in claims.
Credit Suisse has said the lawsuit lacks merit.
Monday's filings included more than 500 pages of exhibits
that MBIA said may support its claim that Credit Suisse hid
defects in securitization practices before the financial crisis,
reflecting the bank's desire to sell more securities rather than
honor its stated policies. Many banks have faced similar claims.
Among the exhibits is an Aug. 21, 2007, email in which a
Credit Suisse due diligence official referred to "some terrible
decisions or missed calls, magnified by very bad feedback" in a
bank business that handled underwriting and due diligence.
Another is an Nov. 22, 2006, email that MBIA said shows a
bank official's concern about making "underwriting exceptions"
that could result in "liability down the road when the loans go
bad and people point out that we violated our own guidelines.
"The fulfillment process is a joke," the email said. "I hate
to say it but I think we're either all in as a mortgage company
or out completely at this point."
MBIA asked Justice Shirley Werner Kornreich in state court
in Manhattan, who oversees the New York case, to order Credit
Suisse to conduct a "targeted re-review" of documents to ensure
it is turning over evidence properly.
The case is MBIA Insurance Corp. v. Credit Suisse Securities
(USA) LLC et al, New York State Supreme Court, New York County,
(Reporting by Jonathan Stempel in New York; Editing by Leslie