Judge Lorna Schofield of the US District Court for the Southern District of New York on Tuesday rejected Credit Suisse Group AG’s attempt to dismiss a lawsuit accusing the bank of defrauding shareholders.

The lawsuit, brought by pension and retirement plans, accuses Credit Suisse of “defrauding shareholders about its risk appetite and risk management before taking $1 billion of writedowns on souring debt.”

In rejecting Credit Suisse’s attempt to dismiss the lawsuit, Schofield mentioned the chief executive’s statements about Credit Suisse’s “rising risk appetite.” According to Schofield, these statements could mislead investors into thinking that “the risk levels were contained and acceptable.”