|  | | 2008 News and Press Releases | | |
SETTLEMENT NEWS:
Class Certified In Securities Suit Against Credit Suisse
Jocelyn Allison
Securities Law 360. September 29, 2008
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EXCERPT: A judge has granted class certification in a massive securities class action against Credit Suisse' U.S. operations over the glowing research it provided during Time Warner Inc.’s botched merger with AOL. Judge Nancy Gertner of the U.S. District Court for the District of Massachusetts on Friday appointed lead plaintiff Bricklayers and Trowel Trades International Pension Fund as class representative in the case, which targets the bank formerly known as Credit Suisse First Boston (USA) Inc. The complaint, filed in July 2004, claims that 35 research reports by the bank promoted AOL and encouraged investors to purchase its stock without revealing analysts’ knowledge of adverse information about the company, causing the plaintiffs to suffer financial losses. In her ruling, Judge Gertner found that the plaintiff only needed to show that the market for AOL stock was efficient, and did not need to establish how the bank analysts' statements impacted the market, in order to obtain class certification. Credit Suisse had argued that the plaintiffs should be required to show that the analyst reports at issue affected the market price for AOL, in order to show that the plaintiffs relied on the defendant's actions to their detriment. Some circuit courts have supported such a requirement, reasoning that the opinion-based statements an analyst makes often don't have the same effect in the market as fact-based statements from the issuer of a security. Overall, however, the courts have been split on the issue, the judge noted. “Indeed, as the court noted previously, while proving that a particular statement was material and had an impact on a stock’s market price may be more difficult for analysts' statements than for issuer statements, the identity of the speaker should not alter the legal or analytical framework,” Judge Gertner wrote. |
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