Abu Dhabi Commercial Bank (ADCB) said on Thursday it was suing Credit Suisse for selling it an investment in an unacceptable way and failing to disclose conflicts of interest.

Credit Suisse declined to comment.

ADCB said in 2007 it was 'induced to enter into an emergency transaction' for a structured investment called Farmington 'based on false and misleading information' to protect a previous investment that had soured.

'On close examination, the investment was sold to the bank in an unacceptable manner,' ADCB chief executive Ala'a Eraiqat in a statement.

The Abu Dhabi Bank, which has significant exposure to US subprime assets, is also suing McGraw-Hill unit Standard & Poor's, accusing it of providing inaccurate, investment-grade ratings to assets associated with the Farmington structure.

A Standard and Poor's spokesman declined to comment.

The lawsuits have been lodged in the United States, where Farmington is registered.

ADCB said a prior investment in a Structured Investment Vehicle (SIV) called Stanfield Victoria in 2005 and 2006 had 'liquidity issues' during the financial crisis and had to be restructured to protect the original investment.

The Abu Dhabi bank said that in return for the restructuring, Credit Suisse required it to enter into an unfunded credit default swap (CDS) to protect the Swiss bank's loan exposure to Farmington.

A source familiar with the matter said ADCB could lose up to $70 million, the difference between the CDS and the asset value.

ADCB alleges Credit Suisse and the other defendants led it to believe the CDS was relatively safe and carried minimal risk.

ADCB, majority owned by the Abu Dhabi government, is also among the worst-hit local banks in the United Arab Emirates due to its exposure to indebted state conglomerate Dubai World.-Reuters