METAIRIE, La. Louisiana Corporate CU announced this morning it will receive a $600,000 settlement from Credit Suisse--the last remaining defendant in a ten-year-old National Century Financial Enterprises asset-backed securities fraud case.
Four executives of National Century Financial Enterprises were sentenced to prison their roles in a scheme to deceive investors about the financial health of NCFE. NCFE, formerly based in Dublin, Ohio, was one of the largest healthcare finance companies in the U.S. until it filed for bankruptcy in November 2002.
A federal judge found the executives purposely misled investors about National Century, its financial health, and the way in which it did business. When the facade collapsed and National Century filed for bankruptcy, investors, like LaCorp, were left holding the bag for billions of dollars in losses. Credit Suisse was one of the underwriters of the bonds.
The bondholders said Credit Suisse sold the notes and defended their creditworthiness despite knowing that National Century misused investor funds and while missing red flags of the the $2.9 billion fraud.
In two separate civil actions filed in 2002 against a number of defendants, LaCorp engaged in a more than decade-long court case, vowing to regain members’ funds to the greatest extent possible. Other plaintiffs joining in the suit and sharing in the settlement include PIMCO, Dreyfus Mutual Funds, Wachovia and numerous Arizona municipal entities.
“This settlement for nearly $600,000 after legal fees came after years of strenuous litigation and brings the total recovery to 98% of Louisiana Corporate’s original investment amount,” said David Savoie, president of LaCorp.
“While it was a long time coming, the Corporate and our legal counsel steadfastly pursued this matter, and our members enjoy an even stronger institution as a result,” he said.
