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Federal judge denies motions to dismiss claims against Credit Suisse

Federal judge denies motions to dismiss claims against Credit Suisse

A federal judge has denied motions to dismiss over $1.6 billion (euro1.11 billion) in claims filed by investors against Credit Suisse First Boston in a lawsuit that stems from the collapse of an Ohio company that affected health care providers across the country.
Plaintiffs in the suit are made up of investors who formerly held "AAA" rated notes issued by now-defunct health care financing company National Century Financial Enterprises.
National Century and its subsidiaries shut down in October 2002 when investors discovered the company had hidden financial problems from investors and auditors. The company's collapse is one of the largest defaults of "AAA" rated debts securities in decades, and Credit Suisse marketed $3 billion (euro2 billion) of the National Century's asset-backed securities.
Once known as Credit Suisse First Boston, Credit Suisse is part of Credit Suisse Group.
In a ruling issued Sunday, U.S. District Judge James Graham rejected Credit Suisse's argument that disclaimers included in the offering memorandum required the dismissal of fraud claims by plaintiffs.
Kathy Patrick, lead counsel for plaintiffs, said in a statement that Credit Suisse was trying to avoid responsibility by relying on technicalities.
"The securities laws require sellers of securities to tell the truth," she said. "We look forward to presenting these claims to a jury."
Plaintiffs include banks, mutual funds, insurance companies and the state of Arizona, according to a statement from Patrick's firm, Gibbs & Bruns L.L.P. of Houston.
National Century, based in suburban Dublin, Ohio, had been the largest U.S. source of financing to health care providers. Doctors, hospitals and other providers got money from the firm rather than waiting for insurance payments, usually getting 80 or 90 cents on the dollar.
Several of National Century's executives have pleaded guilty to fraud or other federal crimes, and the company's former president and chief executive, Lance Poulsen, and other top officers have been indicted and await trial in Ohio.


Updated : 2021-04-15 19:26 GMT+08:00