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Case Status:    DISMISSED    
On or around 09/21/2010 (Notice of voluntarily dismissal)

Filing Date: July 13, 2010

According to a press release dated July 15, 2010, a class action lawsuit was filed on July 13, 2010 on behalf of purchasers of the Enhanced Yield Reverse Exchangeable Securities with Contingent Downside Protection ("Securities") underwritten by the Norwegian financial services company, Eksportfinans A.S.A. The action is pending against defendants Eksportfinans and 29 financial services and investment banking firms who acted as underwriters for the issuance of the Securities.

Specifically, the complaint alleges that the Securities were designed to appeal to older persons and retirees seeking higher yields than those available in Certificates of Deposit and/or treasuries in the current low interest rate environment. However, the Securities were, allegedly, nothing more than risk-laden derivatives, which defendants marketed directly to the investing public, mainly to elderly retired persons, such as the Plaintiff, an 84-year-old widow residing in San Diego.
The class action complaint further alleges that Eksportfinans' offering targeted the risk-averse conservative investors with suggestions that the notes were fully principal protected, which appealed to retired persons and others on fixed incomes who were seeking to preserve their capital and generate income.

Defendant Eksportfinans issued these securities to finance its international credit operation from its headquarters in Oslo, Norway. The securities allegedly provided twin benefits to Eksportfinans: (1) they raised capital, and (2) they provided Eksportfinans with an advantageous derivative position poised to transfer stock market losses to the investors. These securities were allegedly of an exotic type known as Reverse Convertible Notes or Bonds, a type of "structured product", a category of derivatives also comprised of the Schwab Yield Plus Fund and Lehman Brothers products underwritten by Merrill Lynch and UBS. Allegedly, the Securities functioned to transfer the risks of loss of value in underlying securities from defendants to the small unsophisticated retail investors who were sold the notes or bonds.

Investors were allegedly confused by the hidden complexity of these "reverse convertibles" which mislead them into paying inflated prices for them. "Contingent Downside Protection" actually meant that the principal would be protected only if the price of the underlying security did not decrease below certain price at certain time. This caused the investors to lose money when the notes matured and they found themselves unexpectedly left holding shares of stock whose value was substantially less than the principal originally paid in. Defendant's securities allegedly caused forced conversions and losses to investors within a few months after their purchase, in many cases.

On September 21, 2010, the plaintiffs filed a Notice of Voluntary Dismissal Pursuant to Rule 41(a)(1)(A)(i) of the Federal Rules of Civil Procedure, voluntarily dismissing this action without prejudice against the defendants. The case is now closed.


Sector: Financial
Industry: Misc. Financial Services
Headquarters: Norway


Ticker Symbol: EKS
Company Market: Undetermined
Market Status: Unknown

About the Company & Securities Data

"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: S.D. New York
DOCKET #: 10-CV-05336
JUDGE: Hon. P. Kevin Castel
DATE FILED: 07/13/2010
CLASS PERIOD END: 07/13/2010
  1. Law Office of Ronald A. Marron, APLC
No Document Title Filing Date
—Reference Complaint Complaint Related Data is not available
—Related District Court Filings Data is not available