Posted on 05 Oct 2010
The world's second-biggest reinsurer Swiss Reinsurance Co. won dismissal of an investor suit in which it was accused of failing to disclose risk that led to a 1.2 billion franc ($1.1 billion) derivative loss over credit-default swaps.
U.S. District Judge John Koeltl in New York today dismissed the suit on grounds including a June ruling by the U.S. Supreme Court that limits the reach of civil claims for acts occurring outside the country. Koeltl said the plaintiffs also failed to supply sufficient details of their fraud claims.
Swiss Re "made false and misleading statements about the company"s financial condition," the shareholders claimed in the 2008 lawsuit.
“The plaintiffs have failed to allege with particularity that the defendants made any material misstatements or omissions with respect to the CDSs it had insured or that the defendants had any obligation to provide further disclosure with respect to the CDSs it had issued,” Koeltl said.
The lead plaintiff, Plumbers Union Local No. 12 Pension Fund, sued on behalf of a proposed class of purchasers of Swiss Re’s common shares from March 1, 2007, to Nov. 19, 2007.
The complaint described statements that the defendants made about Swiss Re’s involvement with mortgage-related securities, with the subprime mortgage market, Swiss Re’s management practices and the value of its earnings and accounts.