Credit Suisse Settles National Century Suit Before Trial
Credit Suisse Group AG (CSGN) agreed to settle a fraud lawsuit by noteholders of affiliates of National Century Financial Enterprises Inc.
Credit Suisse, Switzerland’s second-biggest bank, was sued last year in federal court in New York by noteholders who claimed the bank, the placement agent, knew or should have known of a $2.9 billion fraud that led to National Century’s collapse in 2002.
The Zurich-based bank said in a statement today that it will book an after-tax charge of 134 million francs ($141 million) against 2012 financial results, reducing the reported net income for the year to 1.35 billion francs.
Ten executives of the Dublin, Ohio-based health-care finance company were convicted of crimes, including former Chief Executive Officer Lance Poulsen, who is serving 30 years in prison after he was found guilty of fraud, conspiracy and money laundering.
The accord was reached two weeks before the start of a consolidated trial before U.S. District Judge James Graham. The litigation related to notes issued by affiliates of NCFE between 1998 and 2002.
“This settlement closes the last, important chapter in the 10-year NCFE litigation,” Kathy Patrick, a partner at Gibbs & Bruns LLP, who represented the Arizona noteholders, said in a statement.
Drew Benson, a spokesman for Credit Suisse in New York, declined to comment on the settlement.
The case is Crown Cork & Seal v. Credit Suisse, 12-cv-5803, U.S. District Court, Southern District of New York (Manhattan).
To contact the editor responsible for this story: Michael Hytha at email@example.com