The original complaint charges Credit Suisse and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Credit Suisse operates as a financial services company. The Company operates in three segments: Investment Banking, Private Banking, and Asset Management.
Specifically, the complaint alleges that, during the Class Period, defendants issued materially false and misleading statements regarding the Company’s business and financial results. The complaint further alleges that defendants failed to write down impaired securities containing mortgage-related debt. According to the complaint, the true facts, which were known by defendants but concealed from the investing public during the Class Period, were as follows: (a) that defendants failed to record losses on the deterioration in mortgage assets and collateralized debt obligations (“CDOs”) on Credit Suisse’s books caused by the high amount of non-collectible mortgages included in the portfolio; (b) that Credit Suisse’s internal controls were inadequate to ensure that losses on residential mortgage-related assets were accounted for properly; and (c) that Credit Suisse’s traders had put incorrect values on CDOs and other debt securities, concealing the exposure the Company had to losses.
On February 19, 2008, Credit Suisse announced that it had undertaken an internal review that resulted in the repricing of certain asset-backed positions in its Structured Credit Trading business. The total fair value reductions of these positions were estimated at approximately $2.85 billion. On this news, Credit Suisse’s ADRs collapsed to close at $48.22 per ADR on February 19, 2008, a decline of almost 31% from $69.61 per ADR in early October 2007.
NOTE: The class action has been commenced on behalf of all persons who purchased or otherwise acquired the American Depositary Receipts of Credit Suisse Group and U.S. residents or citizens who purchased Credit Suisse stock between the Class Period.
On June 23, 2008, the Court entered the Order consolidating two cases under case, 08 Civ. 3758. On July 7, 2008, the Court entered the Stipulation and Order appointing Kevin Cornwell and John M. Grady as co-lead plaintiffs for the class. Further, according to the Order, Cornwell's and Grady's selection of the law firms of Coughlin Stoia Geller Rudman & Robbins L.L.P. and Scott + Scott, L.L.P. to serve as Lead Counsel is approved. On October 21, 2008, the lead plaintiffs filed an Amended Complaint.
On December 19, 2008, the defendants filed a motion to dismiss the Amended Complaint. On September 28, 2009, Judge Victor Marrero granted the defendants’ motion to dismiss the amended complaint for lack of subject matter jurisdiction. On September 30, 2009, the Clerk’s Judgment was entered. On October 5, 2009, Judge Marrero signed the Decision and Amended Order granting the defendants’ motion to dismiss. The lead plaintiffs may submit a request for leave to amend their complaint within twenty days of the date of this Order. Such a request must make a plausible showing that repleading would not be futile. The Clerk of the Court is directed to withdraw any pending motions and close this case.
According to an article dated February 18, 2010, in a case notable for its ‘f-cubed‘ implications, Southern District Judge Victor Marrero partially revived a subprime-related class action against Credit Suisse, ruling last week that U.S. shareholders can file a second amended complaint alleging the Swiss-based bank defrauded investors as the market for subprime-based securities collapsed. F-cubed suits are actions filed by foreign plaintiffs in U.S. courts against foreign issuers of securities that allegedly are in violation of U.S. law. Judge Marrero's 22-page ruling in Cornwell v. Credit Suisse Group, 08 civ. 3758, on the plaintiffs' motion to file the new complaint reiterated his previous rejection of claims by non-U.S. investors, but concluded that U.S. residents who purchased Credit Suisse depository receipts on the New York Stock Exchange, as well as U.S. investors who purchased Credit Suisse shares on the Swiss exchange, can assert their claims in an amended complaint.
On March 10, 2010, the lead plaintiffs filed a Second Amended Complaint. On July 27, 2010, Judge Victor Marrero granted the defendants’ Motion for Judgment on the Pleadings and dismissed the plaintiff’s claims asserted under Section 10 (b) of the Exchange Act of 1934. According to the Order, on June 24, 2010, the United States Supreme Court issued Morrison v. National Australia Bank, No. 08-1191, 2010 WL 2518523, U.S. (June 24, 2010), which set forth a new rule for determining the extraterritorial application of the United States securities laws. Invoking Morrison, Defendants moved via letter on July 6, 2010 for a partial judgment on the pleadings to dismiss plaintiffs, such as LAMPERS, who had purchased CSG shares on the SWX. Letter-briefs from each party were submitted to the Court on July 19, 2010. For the reasons discussed in the Order, the Defendants' motion is granted.
The plaintiffs filed a motion for reconsideration of the order, but that motion was denied on August 11, 2010. The action is now in discovery phase.
According to a press release dated March 10, 2011, Credit Suisse Group AG has agreed to pay $70 million to settle U.S. litigation accusing the Swiss bank of misleading investors about its subprime exposure and ability to limit losses. The settlement also covers several executives [...]. It allows recovery for investors who bought Credit Suisse's American depositary shares, and U.S. investors who bought Credit Suisse securities in Switzerland, between February 15, 2007 and April 14, 2008, court papers show. It resolves one of many securities fraud cases against banks to arise from the 2007 and 2008 financial crises. [...]. Thursday's settlement followed mediation and requires court approval, papers filed in Manhattan federal court show. Some investors had been dismissed earlier from the case, including foreign buyers of the bank's stock in Switzerland. U.S. buyers of that stock, including co-lead plaintiff Louisiana Municipal Police Employees Retirement System, were also dismissed after a June 2010 U.S. Supreme Court ruling that limited investors' ability to use federal courts to raise fraud claims over the purchase of foreign securities. But that dismissal was not certified as "final," and the U.S. buyers are included in the settlement, court papers show.
According to the Order entered on March 24, 2011, the Court does hereby preliminarily approve the Settlement Agreement and the Settlement set forth therein, subject to further consideration at the Final Approval Hearing described in this Order, as set forth in this Stipulation. A hearing shall be held before this Court on July 18, 2011 at 3:00 pm, in courtroom 20B, 500 Pearl Street, New York, 10007.
On July 20, 2011, Judge Victor Marrero approved the settlement, the plan of distribution, and awarded attorneys' expenses in an aggregate amount of $285,072.62, plus interest and fees in the amount of 27.5% of the settlement fund. The action is now dismissed with prejudice and the case is now closed.