A trial scheduled to begin today in the state attorney general’s $3 billion claim against Credit Suisse has been postponed so a new judge get can up to speed on a nine-year legal battle in what may be the biggest and most complicated civil lawsuit in New Jersey history.
The New Jersey Bureau of Securities filed a lawsuit against Credit Suisse in 2013 alleging that they engaged in fraudulent and deceptive practices during the sale of mortgage-backed securities.
Superior Court Judge Timothy Lydon set a September 12 trial date last October, but his resignation from the bench last month to become the executive director of the Senate Majority Office has delayed the trial.
The courts did not publicly announce the delay until late Monday.
Chief Justice Stuart Rabner named another Superior Court Judge, Kay Wolcott-Henderson, to replace him.
Wolcott-Henderson has scheduled a conference between attorneys for both sides on September 26.
The case is has already had more than 40 motion hearings and 17 case management conferences. It involves some of the biggest law firms in the region.
The lawsuit is now on its fifth attorney general – Christopher Porrino, who was director of the Division of Law and supervised the litigation when the case was first filed, is still the lawyer; the state hired Porrino’s firm, Lowenstein Sandler, as outside counsel – and Lydon was the fourth judge on the case.
Mercer County Assignment Judge Robert Lougy was acting attorney general after acting Attorney General John J. Hoffman, who initially brough the action, left office. He was also the judge on the Credit Suisse lawsuit for a time. The current acting attorney general, Matt Platkin has recused himself since he was a partner at Lowenstein.
In December 2013, Hoffman announced a lawsuit against Credit Suisse Securities USA alleging that the global investment bank and financial services firm offered more than $10 billion of residential mortgages guaranteed by securities trusts for sale while “misrepresenting the risks of the investments.
Hoffman accused Credit Suisse of failing to disclose “that numerous loan originators had poor track records of defaults and delinquencies, and some had even been suspended from doing business with Credit Suisse.”