Credit Suisse

Allstate Sues Merrill Lynch and Credit Suisse for Fraud

On February 28, 2011, Allstate Insurance, represented by Quinn Emanuel, filed complaints against Merrill Lynch and Credit Suisse affiliated entities in New York state court in connection with Allstate’s purchase of RMBS from those entities. The complaints follow similar complaints by Allstate against JP Morgan, Washington Mutual, Bear Stearns, Citigroup, and Deutsche Bank entities. The complaints allege that defendants fraudulently misrepresented the quality of the loans underlying the RMBS they underwrote and sold to plaintiff. Both complaints allege causes of action for common law fraud, fraudulent inducement, and negligent misrepresentation. The complaint against Merrill Lynch also adds claims for violations of Sections 11, 12(a)(2), and 15 of the ’33 Act. Allstate purchased over $167 million in RMBS from Merrill Lynch and over $231 million from Credit Suisse. CS Complaint. Merrill Complaint.

Plaintiff Seeks Class Certification Against Credit Suisse

On December 10, 2010, a Plaintiff filed a motion for class certification in an action regarding a $633 million mortgage-backed securities offering by Credit Suisse in 2006. The Plaintiff alleges that it has specifically identified 97 investors who are members of the putative class, and that 569 additional market participants purchased or sold the Certificates since 2006. The case is pending in the United States District Court for the Southern District of New York before Judge Lewis A. Kaplan. Memo of Law.

Partial Summary Judgment Granted in National Century Litigation

On December 13, 2010, Judge James Graham of the United States District Court for the Southern District of Ohio granted summary judgment, dismissing several claims brought against Credit Suisse Securities LLC by investors in asset-backed securities issued by National Century Financial Enterprises, Inc. The Court dismissed all claims arising under Ohio’s blue sky laws because, although National Century was an Ohio issuer, the securities were not offered for sale, purchased or sold in Ohio. The Court found that the application of Ohio’s state securities laws in these circumstances would violate the Commerce Clause of the United States Constitution. The Court, however, denied Credit Suisse’s argument that some plaintiffs lacked standing to sue because they no longer held the securities at issue, holding that rescission – the remedy sought by the plaintiffs – is a “purely personal remedy” and “generally not assignable.” Decision.