Financial Services Litigation & Investigations Group
Financial Services Litigation & Investigations Group
In the face of turmoil and uncertainty, the world's major financial institutions continue to choose our team to help them manage their business, litigation and reputational risks and thrive in the new economic and regulatory climate. To our clients we are much more than litigators - we are business partners who have a stake in their success.
New York State Supreme Court Dismisses Claims Against UBS
- Client News
- April 8, 2013
New York State Supreme Court Justice Shirley Werner Kornreich issued a decision dismissing, with prejudice, common law fraud and other claims brought against Paul, Weiss client UBS Limited and other UBS entities. Plaintiffs, investors in several CDOs issued by UBS in 2007, alleged that UBS and other defendants designed the CDOs, comprised of residential mortgage-backed securities, for their own benefit in order to profit from the impending collapse of the subprime mortgage market. Plaintiffs further alleged that UBS, along with the collateral manager for one of the CDOs, failed to disclose the improper role of a CDO short investor in selecting assets for the CDO.
In an 18-page decision, Justice Kornreich held that the complaint failed to identify any fraudulent misrepresentations, noting that plaintiffs failed to allege that the securities at issue failed to conform to the objective selection criteria to which the parties had agreed or that defendants knew in advance that the securities were going to decline in value. Justice Kornreich further noted that, given the structure of the CDOs, plaintiffs must have been well aware that there would be one or more short investors in the CDOs, the identity of whom was irrelevant to plaintiffs' investment decision.
Litigation partner Richard Rosen argued the motion to dismiss. The Paul, Weiss team also included, among others, litigation partner Daniel Kramer.