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Dismissal of Federal Securities Claims of U.S. Purchasers of Credit Suisse Stock on Foreign Exchanges

On July 27, 2010, the United States District Court for the Southern District of New York granted a motion for judgment on the pleadings in favor of Cravath client Credit Suisse Group and its senior officers, dismissing the Section 10(b) securities fraud claims of all U.S. plaintiffs who purchased Credit Suisse common stock on the Swiss Stock Exchange. This is one of the first decisions to implement the Supreme Court’s recent ruling in Morrison v. National Australia Bank, which ruled that investors could not invoke the widely used federal securities law Section 10(b) and Rule 10b-5 after they buy and sell shares of foreign companies on non-U.S. exchanges. Plaintiffs argued that Morrison should be limited to foreign purchasers, but Cravath successfully argued that the bright-line test announced in Morrison also applied to U.S. purchasers who purchased securities listed on a foreign exchange.

The Cravath team included partners Richard W. Clary and Darin P. McAtee and associates Christopher B. Harwood, Lindsay R. Goldstein, Alexandra Reeve Givens and Michelle A. Gyves.