NEW YORK (Reuters) - The U.S. Attorney's Office in New Jersey is investigating Credit Suisse AG (CSGN.VX) over mortgage-backed securities packaged and sold by the bank, according to people familiar with the matter.
U.S. Attorney's Offices in other districts are focusing on other banks in related investigations, said the people, who were not authorized to speak publicly. It was unclear how many U.S. Attorneys were involved.
The investigations show that authorities are still trying to build cases over the alleged misconduct by banks that led to the 2008 financial crisis.
The New Jersey probe came out of a working group created by President Barack Obama in January 2012, one of the people said.
The task force, called the Residential Mortgage-Backed Securities (RMBS) Working Group, was supposed to coordinate a series of federal and state investigations into shoddy loans that were packaged and sold to investors. Those securities spread risk throughout global markets and were a major contributing factor to the financial crisis.
The Justice Department said early last year that it had sent civil subpoenas to 11 financial institutions as part of its investigation of the RMBS market.
U.S. Attorney Paul Fishman of New Jersey is examining how Credit Suisse handled the mortgage-securitization process, step by step, according to one of the people.
Matthew Reilly, a spokesman for Fishman, declined to comment.
Adora Andy, a spokeswoman for the U.S. Department of Justice, did not immediately return a call for comment.
Jack Grone, a spokesman for Zurich-based Credit Suisse, Switzerland's second largest-bank, also declined to comment.
Credit Suisse has been the target of other U.S. probes over mortgage-backed securities. In November, the bank agreed to a $120-million settlement with the U.S. Securities and Exchange Commission over civil charges stemming from the bank's sale of risky mortgage bonds to investors before the crisis.
The bank settled the SEC case without admitting wrongdoing.
Separately, New York Attorney General Eric Schneiderman filed a civil lawsuit against Credit Suisse in November. The complaint accused Credit Suisse of misleading investors who lost $11.2 billion in mortgage-backed securities sponsored by the bank.
Schneiderman is a co-chair of the RMBS Working Group formed by Obama.
Schneiderman also filed a lawsuit against JPMorgan Chase & Co (JPM.N) in October. That case is over mortgage securities sold by Bear Stearns, which JPMorgan acquired in a fire sale in 2008. The JPMorgan case was the first lawsuit to emerge from the working group.
The Justice Department in Washington is also investigating JPMorgan over allegations that Bear Stearns provided misleading information about its mortgage products in the lead-up to the financial crisis, as Reuters reported Wednesday.
Earlier this month, in one of its most ambitious cases tied to the crisis, the Justice Department filed a $5 billion lawsuit against McGraw Hill's (MHP.N) Standard & Poor's unit. Filed in Los Angeles, the lawsuit claims the credit rating agency schemed to defraud investors in mortgage-backed securities that collapsed in the financial crisis. Standard & Poor's has said the lawsuit is "meritless."
During his 2012 State of the Union address, Obama said he created the group investigating the packaging of risky mortgages to "hold accountable those who broke the law" and to "help turn the page on an era of recklessness." (Editing by Karey Wutkowski and Bernadette Baum)
Updated Date: Feb 23, 2013 22:30 PM