US regulators are reportedly investigating Credit Suisse's documents, including internal emails, to ascertain whether its mortgage committee overlooked red flags over the quality of home loans.
Sources familiar with the matter were quoted by Reuters as saying that the internal bank group, called the Watch List Committee, was formed in 2005, to ensure that faulty loans were not incorporated in securities being sold to investors.
A source familiar with the document told the news agency that the emails, which have not been reported earlier, might divulge information, which could enable prosecutors to bring any action against Switzerland-based Credit Suisse.
According to the email sent by Watch List committee member John Vibert, who also served as co-head of non-agency mortgage trading at Credit Suisse, the committee was "driven by the sales psychology of Mike Fallacara and Chris Delfs," the source told the news agency.
At that time, Delfs was working as the head of residential mortgage-backed security (RMBS) sales, whereas Fallacara headed the bank’s loan conduit, charged with securitization and reselling the loans.
The Justice Department’s Residential Mortgage-Backed Securities Working Group, a network of law enforcement agents and prosecutors, which includes both state and federal, are collectively probing Credit Suisse.