Bingham Beats Abu Dhabi Bank's Fraud Case Against Credit Suisse

, The Litigation Daily


Abu Dhabi Commercial Bank struck out for the second time Tuesday in its bid to revive a lawsuit against Credit Suisse Group AG over a troubled $40 million structured finance transaction. New York's Appellate Division, First Department, affirmed dismissal of ADCB's fraud claims, handing a win to Credit Suisse and its lawyers at Bingham McCutchen.

ADCB and its counsel at Robbins Geller Rudman & Dowd originally sued Credit Suisse in 2010, claiming that the Swiss bank failed to disclose conflicts of interest and provided misleading information in 2007 when structuring and touting a collateralized debt obligation known as Farmington. The complaint also accused Standard & Poor's of providing inaccurate investment-grade ratings to the underlying assets.

New York Supreme Court Justice Peter Sherwood first dismissed the case in 2011, concluding that ADCB's allegations were undermined by disclaimers in the transaction documents. ADCB then sought to resuscitate its claims against Credit Suisse by pointing to documents produced in federal criminal indictments and civil proceedings against several Credit Suisse bankers. Those newly public documents, the Persian Gulf bank claimed, showed Credit Suisse engaging in self-dealing and mispricing of assets just as in the Farmington deal.

Judge Sherwood nevertheless dismissed the claims again in July 2012. ADCB, the judge ruled, had waited too long to introduce the purported new evidence. (Defendant S&P, a unit of McGraw-Hill Companies Inc., wasn't party to the renewal motion or appeal. S&P was represented by Cahill Gordon & Reindel.)

In Tuesday's decision, the First Department acknowledged that the government's case against Credit Suisse didn't become public until six months after Sherwood granted the bank's initial motion to dismiss. But the appeals court ruled that even with the new evidence, ADCB was unable to state a claim for fraud relating to the Farmington transaction. "ADCB's contention to the contrary is speculative," the panel wrote.

Credit Suisse's lawyer, Susan DiCicco at Bingham McCutchen, pointed us to a bank spokesman who declined to comment.

Eric Lewis of Lewis Baach represented Abu Dhabi Commercial Bank on appeal. He wasn't immediately available.

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