Monday, December 24, 2007

LET THIS STORY BE TOLD......and it is not just Credit Suisse

National Century lawsuit moves closer to trial
NEW YORK (Reuters) - A lawsuit accusing Credit Suisse (CSGN.VX) of aiding fraud at bankrupt healthcare finance company National Century Financial Enterprises moved another step closer to trial after a U.S. judge said it was too soon to dismiss the suit, as requested by the Swiss investment bank.

In U.S. District Court for the Southern District of Ohio, Eastern Division, Judge James Graham said on December 19 it is too soon to dismiss the charges of debt holders, who accused Credit Suisse of underwriting securities issued by National Century, which the bank knew was committing fraud.

Credit Suisse argued it held a large number of National Century notes, and would therefore be foolish to knowingly help the company commit fraud.

The debt holders, who include MetLife Inc (MET.N) and the state of Arizona, said Credit Suisse continued selling National Century notes after learning of fraud at the company because that was the best way for the bank to reduce its exposure.

"Credit Suisse has challenged isolated portions of the complaints but does not offer any competing explanations of the pleaded facts that are as plausible as the Plaintiffs' explanations," Judge Graham wrote.

A spokeswoman for Credit Suisse declined to comment on Sunday. In a statement, Kathy Patrick, a lawyer at Gibbs & Bruns representing the largest group of plaintiffs, said, "We look forward to presenting (our) claims to a jury."

National Century filed for bankruptcy in 2002 after an auditor refused to sign its financial statements and lenders stopped advancing funds.

The Dublin, Ohio-based company was a multibillion dollar business that bought patients' bills from healthcare providers and packaged them into bonds for investors.

Since the company filed for bankruptcy, a dense tangle of litigation has developed as investors try to recoup their losses.

(Reporting by Dan Wilchins; Editing by Derek Caney)

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