Credit Suisse sued by semiconductor firm

8 August 2008

The latest suit has been filed in the US over alleged miss-selling of auction-rate securities, this time against Credit Suisse.

Swiss semiconductor firm STMicroelectronics is suing the bank, after it allegedly transferred around $450 million of corporate funds into unauthorised financial products.

ST has previously said that it lost around $115 million due to this "illegal" transfer.

Auction-rate security selling has come under fire recently, with some financial firms accused of misrepresenting them as "risk-free investments" to clients.

Yesterday, it was reported that Citigroup and UBS were both willing to offer expensive out-of-court settlements with the New York district attorney in order to avoid their own miss-selling charges.

The Securities and Exchange Commission has also taken an interest, and has launched its own investigation into the securities.

In its complaint, which was made to a federal court in Brooklyn, New York City, ST said: "After the illegal scheme was exposed by ST in the summer of 2007, rather than siding with customers who had been victimized, Credit Suisse Group aligned itself with its wholly owned subsidiary Credit Suisse Securities and its corrupt brokers and directors."

The complaint added that the firm, Europe's largest supplier of semiconductors, intends to recoup all its money.

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