Credit Suisse Nears $360 Million Deadline In Fraud Suit Built On A Hunch

www.oann.com | 7/27/2017 | Staff
iVchan (Posted by) Level 3
CHICAGO (Reuters) – When the high-end property development Lake Las Vegas collapsed during the 2008 financial crisis, 31 funds that helped finance the project lost a total of $540 million. But only one of them, Dallas-based hedge fund Highland Capital Management, aggressively pursued legal action against Credit Suisse Group AG, which arranged the financing and appraisals for the project.

Highland ultimately convinced a Texas court that Credit Suisse had breached its contract and aided and abetted fraud in the deal, and the decision was upheld on appeal. Now, Credit Suisse faces a July 18 court deadline to pay Highland $360 million or appeal to the Texas Supreme Court.

Victories - Date - Reputation - Fledgling - Texas

The victories to date have enhanced the reputation of a fledgling Texas law firm, and legal experts say they are likely to encourage other investment funds to take big banks to court.

“This case shows the big banks can’t hide behind disclaimers when they know certain facts,” said Carol Gilden, a lawyer who represents pension funds and other institutional investors in financial and securities disputes.

Banks - Dozens - Lawsuits - Governments - Shareholders

Global banks have settled dozens of lawsuits by governments and shareholders over financial crisis misconduct, but until the Highland suit, it was unusual for an investment fund to pursue tough-to-win fraud actions – especially against a major trading partner, as Credit Suisse was for Highland.

Highland, however, has a reputation for being more legally aggressive than many funds, and its general counsel, Scott Ellington, had a strong hunch that something was amiss with the deal.

Something - Ellington - Reuters - Interview

“When something is wrong I like to right it,” Ellington told Reuters in an interview.

The company had trouble finding someone willing to take the case, he said, in part because the legal firms it approached thought Ellington’s suspicions would be tough to prove. Then, in 2010, Ellington met with Reid Collins & Tsai LLP, a newly-formed practice in...
(Excerpt) Read more at: www.oann.com
Wake Up To Breaking News!
Sign In or Register to comment.

Welcome to Long Room!

Where The World Finds Its News!