ALBANY– New York's highest court will hear arguments this week as to whether an $11 billion lawsuit against Credit Suisse filed by Attorney General Eric Schneiderman can proceed.

On Wednesday, the state's Court of Appeals will hear oral arguments in the case People, by Schneiderman v. Credit Suisse Securities, No. 40, which stems from a 2012 lawsuit Schneiderman filed charging that the Swiss international bank misrepresented the risks of residential mortgage-backed securities to investors in 2006 and 2007. Those securities helped spur the 2008 financial crisis.

Schneiderman sued the bank in New York state Supreme Court in Manhattan under the Martin Act, which over the years has been interpreted to give New York prosecutors substantial powers over securities markets. Credit Suisse moved to dismiss the lawsuit on the basis that a three- year statute of limitation had expired before Schneiderman's lawsuit was filed. The Zurich-based bank also argued that the state was pre-empted by the federal National Securities Markets Improvement Act.

Schneiderman's office countered the bank's claim, arguing that Credit Suisse's actions are subject to a six-year statute of limitation, and are therefore timely. The Supreme Court agreed with Schneiderman and allowed the lawsuit to proceed. Credit Suisse appealed the decision and in December 2016, the Appellate Division, First Department, upheld the lower court's ruling in favor of Schneiderman, stating that the statute of limitation for the case is for six years, rather than three.

A spokeswoman for Credit Suisse declined to comment, referring inquiries to briefs filed by the bank to the state Court of Appeals. In a brief filed with the court in November, Richard Clary, Michael Reynolds and Lauren Moskowitz—attorneys at Cravath, Swaine & Moore, who are representing Credit Suisse—said that “neither common-law, equitable fraud nor any other equitable action ever enabled the attorney general to impose liability on the sweeping terms allowed under the Martin Act” or a portion of the executive law.

Credit Suisse's attorneys further argued that modifying or implementing common law liability would overrule a previous ruling by the Court of Appeals in Gaidon v. Guardian Life Insurance Co. of America, which they say establishes that the three-year statute of limitation applies to the Martin Act.

Spokespeople for Schneiderman's office did not immediately reply to a request for comment.