Credit Suisse fights to name people behind UK 'fraud' claim - Reuters

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• Swiss bank faces trial over 2007 purchase of $100 mln of notes Credit Suisse says litigation filed out of time

(Reuters) - Credit Suisse is fighting in a London court to identify the individuals behind a lawsuit accusing the Swiss bank of fraud in connection with the purchase of over $100 million of notes to bolster its bid to defeat the case.

Lawyers for Credit Suisse told the Court of Appeal in London on Wednesday that knowing who may have made the decision to launch the litigation is critical to proving that the claims were brought too late.

The buyer of the notes, however, argued that information is privileged.

“Credit Suisse is not entitled to look ‘behind the curtains’ or see who is inside the ‘engine-room’ … in the hope of obtaining an advantage," said Tim Lord, representing Loreley Financing (Jersey) No 30 Ltd, one of a group of special purpose vehicles based in Jersey in the Channel Islands which were set up by German bank IKB, that bought the notes in 2007.

The purchase was part of a collateralised debt obligation transaction, linked to the value of residential mortgage-backed securities, in the run-up to the 2008 financial crisis.

Loreley Financing says Credit Suisse “made false and dishonest representations which induced it to buy the notes”.

It also claims there was “underlying fraud” by Credit Suisse in relation to the securitisation of the notes, for which the bank agreed in 2016 to pay a $2.48 billion penalty in a deal with the U.S. Department of Justice.

Both parties agree the lawsuit, filed in November 2018 and due to go to trial next year, was brought outside the normal six-year time limit to bring claims that began when the notes were bought.

Loreley says it could not have discovered the alleged fraud before November 2012 and it could not have known about it until an agreed statement of facts was published by the DOJ in January 2017.

But Credit Suisse contends that German state-owned lender KfW – which rescued IKB in 2007 and is said to be directing the litigation – knew enough about any alleged wrongdoing to bring a claim before 2012.

A lower court ruled in May that “the names of the individuals who are, or have been, authorised" to direct Loreley’s lawyers in relation to the case are not privileged.

But Loreley, which is appealing that ruling, says the identity of people directing lawyers during litigation should be protected.

Lord told the court that “the identity of the communicator is part of the communication and therefore falls to be protected”.

Tamara Oppenheimer, representing Credit Suisse, said IKB brought "a very similar claim" against the bank in New York in 2011, which meant Loreley knew enough to bring its case then.

The case is Loreley Financing (Jersey) No. 30 Limited v Credit Suisse Securities (Europe) Limited and others, CA-2022-001108.

For Loreley: Tim Lord and Fred Hobson of Brick Court Chambers, and RPC.

For Credit Suisse: Tamara Oppenheimer and Adam Sher of Fountain Court Chambers, and Cahill Gordon & Reindel.

Our Standards: The Thomson Reuters Trust Principles.

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