South Korea

Second Circuit Affirms Dismissal of Untimely CDO Claims against Merrill Lynch

On November 21, the Court of Appeals for the Second Circuit affirmed the dismissal of a suit brought by South Korea‘s Woori Bank against Merrill Lynch & Co., Inc. and Bank of America Corp. on statute of limitations grounds.  The bank brought claims for fraud, rescission, negligent misrepresentation and unjust enrichment on May 18, 2012 stemming from its $143 million investment in several collateralized debt obligations.  The Second Circuit agreed with the lower court that publicity about Merrill Lynch’s CDOs, related lawsuits and government investigations sufficiently alerted Woori to any claims prior to May 2009.  The bank’s claims were therefore time-barred under South Korea’s applicable three year statute of limitations.  Decision.

Selected International Initiatives

On October 28, the Hong Kong government established a taskforce to help Hong Kong tackle the financial
On October 29, the Financial Services Commission of South Korea said it would ease capitalization rules for
local banks. Local banks will now be required to set aside assets to cover Won denominated debts maturing
within a month rather than three months in an effort to ease liquidity. FSC of Korea Press Release.
The Federal Reserve has recently entered into a number of temporary reciprocal current arrangements with the central banks of Brazil, Mexico, South Korea, Singapore and New Zealand to help improve liquidity
conditions in global financial markets and to mitigate the spread of difficulties in obtaining U.S. dollar funding.  October 29 Federal Reserve Press Release.  October 28 Federal Reserve Press Release.