Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Abu Dhabi Commercial Bank v. Morgan Stanley & Co.

November 7, 2012

ABU DHABI COMMERCIAL BANK, KING COUNTY, WASHINGTON, SEI INVESTMENTS COMPANY, SEI INVESTMENT STRATEGIES, LLC, THE BANK OF N.T. BUTTERFIELD & SON LIMITED, SFT COLLECTIVE INVESTMENT FUND, DEUTSCHE POSTBANK AG, GLOBAL INVESTMENT SERVICES LIMITED, GULF INTERNATIONAL BANK B.S.C., NATIONAL AGRICULTURAL COOPERATIVE FEDERATION, STATE BOARD OF ADMINISTRATION OF FLORIDA, COMMONWEALTH OF FLORIDA, COMMONWEALTH OF PENNSYLVANIA PUBLIC SCHOOL EMPLOYEES' RETIREMENT SYSTEM, BANK SINOPAC, BANK HAPOALIM, B.M., COMMERZBANK AG, AND KBL EUROPEAN PRIVATE BANKERS S.A., PLAINTIFFS,
v.
MORGAN STANLEY & CO. INCORPORATED, MORGAN STANLEY & CO. INTERNATIONAL LIMITED, MOODY'S INVESTORS SERVICE, INC., MOODY'S INVESTORS SERVICE LTD., STANDARD AND POOR'S RATINGS SERVICES AND THE MCGRAW HILL COMPANIES, INC., DEFENDANTS.



The opinion of the court was delivered by: Shira A. Scheindlin, U.S.D.J.

OPINION AND ORDER

I. INTRODUCTION

Plaintiffs are institutional investors asserting claims of fraud, aiding and abetting fraud, and negligent misrepresentation arising from the 2007 collapse of the Cheyne structured investment vehicle ("SIV"). Defendants are Morgan Stanley & Co. Incorporated and Morgan Stanley & Co. International Limited (together, "Morgan Stanley") - the arranger/placement agent of the Cheyne SIV; Moody's Investors Service, Inc. and Moody's Investors Service Ltd. (collectively "Moody's"); and Standard & Poor's Ratings Services and The McGraw Hill Companies, Inc. (collectively "S & P," and, together with Moody's, the "Ratings Agencies") - the agencies that rated the notes issued by Cheyne. In my August 17, 2012 summary judgment Opinion and Order, I dismissed the fraud claims against Morgan Stanley and the aiding and abetting fraud claims against the rating agencies.*fn1 For twelve of the fifteen plaintiffs, I allowed the fraud claims against the rating agencies and the aiding and abetting claims against Morgan Stanley to proceed. However, I dismissed: (1) the claims of plaintiff The Bank of N.T. Butterfield & Son Limited ("Butterfield"); (2) the claims of plaintiff Commerzbank AG ("Commerzbank") that arise out of the Allianz--Dresdner Daily Asset Fund's ("DAF") investments in Cheyne; and (3) the claims of plaintiff SEI Investments Company ("SEI"). SEI, Commerzbank, and Butterfield now move for reconsideration of my August 17, 2012 Opinion and Order. In connection with their reconsideration motions, SEI and Commerzbank move for leave to file declarations. For the reasons set forth below: (1) plaintiffs' motion for leave to file declarations is denied; (2) SEI's motion for reconsideration is granted; (3) Butterfield's motion for reconsideration is granted; and (4) Commerzbank's motion for reconsideration is denied.

II. BACKGROUND

Familiarity with the facts and the procedural history is assumed.

III. LEGAL STANDARD

A. Reconsideration

Motions for reconsideration are governed by Local Rule 6.3 and are committed to the sound discretion of the district court.*fn2 "A motion for reconsideration is appropriate where 'the moving party can point to controlling decisions or data that the court overlooked - matters, in other words, that might reasonably be expected to alter the conclusion reached by the court.'"*fn3 Further, "[t]ypical grounds for reconsideration include 'an intervening change of controlling law, the availability of new evidence, or the need to correct a clear error or prevent manifest injustice.'"*fn4 Yet, because "the purpose of Local Rule 6.3 is to 'ensure the finality of decisions and to prevent the practice of a losing party examining a decision and then plugging the gaps of a lost motion with additional matters,'"*fn5 the Rule must be "narrowly construed and strictly applied so as to avoid repetitive arguments on issues that have been considered fully by the Court."*fn6

B. Summary Judgment

"Summary judgment is designed to pierce the pleadings to flush out those cases that are predestined to result in a directed verdict."*fn7 Thus, summary judgment is only appropriate "if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law."*fn8 "For summary judgment purposes, a 'genuine issue' exists where the evidence is such that a reasonable jury could decide in the non-moving party's favor."*fn9 "'A fact is material when it might affect the outcome of the suit under governing law.'"*fn10

"[T]he burden of demonstrating that no material fact exists lies with the moving party . . . ."*fn11 "When the burden of proof at trial would fall on the nonmoving party, it ordinarily is sufficient for the movant to point to a lack of evidence to go to the trier of fact on an essential element of the non[-]movant's claim."*fn12

In deciding a motion for summary judgment, a court must "'construe the facts in the light most favorable to the non-moving party and must resolve all ambiguities and draw all reasonable inferences against the movant.'"*fn13 However, "'[c]redibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge.'"*fn14

"'The role of the court is not to resolve disputed issues of fact but to assess whether there are any factual issues to be tried.'"*fn15

C. Summary Judgment Standard for Fraud and Aiding and Abetting Claims In New York, a plaintiff alleging fraud must establish each element of its fraud claim by "clear and convincing evidence."*fn16 The same is true for a plaintiff asserting a claim of aiding and abetting fraud.*fn17 Thus, the appropriate summary judgment question is whether the evidence on the record could support a reasonable jury finding that the plaintiff has shown each element of either a fraud or an aiding and abetting claim by clear and convincing evidence.

IV. APPLICABLE LAW

A. Fraud

To recover damages for fraud under New York law, a plaintiff must prove: (1) a misrepresentation or a material omission of fact which was false and known to be false by defendant; (2) made for the purpose of inducing the other party to rely upon it; (3) justifiable reliance of the other party on the misrepresentation or material omission; and (4) injury.*fn18 "The claim also requires a showing of proximate causation, such that the injury 'is the natural and probable consequence of the defrauder's misrepresentation or . . . the defrauder ought reasonably to have foreseen that the injury was a probable consequence of his fraud.'"*fn19

In addition to establishing scienter, plaintiffs must show that they reasonably relied on the false and misleading ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.