STMicroelectronics, N.V. v. Credit Suisse Securities (USA) LLC
United States Court of Appeals for the Second Circuit
648 F.3d 68 (2011)
- Written by Tammy Boggs, JD
Facts
STMicroelectronics, N.V. (ST) (plaintiff) required large amounts of cash equivalents on hand to support its business needs. In 2006, ST agreed to allow Credit Suisse Securities (USA) LLC (CS) (defendant) to invest ST’s funds in specified short-term securities. Almost immediately, CS deviated from the parties’ plan and began investing in riskier securities that had no government guarantee. CS’s brokers falsified email confirmations to cover their actions. The brokers were eventually convicted of fraud and conspiracy charges. ST’s investments dropped significantly in value, reducing their usefulness as liquid cash equivalents. In 2008, ST filed an arbitration against CS. A panel of three arbitrators was appointed, including one arbitrator selected for his industry knowledge, John Duval. In his conflict-disclosure report, Duval described a 22-year career in finance, primarily for Merrill Lynch, and stated that he was currently working as a “litigation consultant and an expert witness having represented both sides.” Duval’s report provided two examples of having testified for and against a financial institution. Thereafter, CS sought to remove Duval from the panel based on Duval’s failing to disclose aspects of his background. CS had discovered that Duval made a statement in 2005 about having served as an expert witness for more claimants than respondents. In response, Duval declined to recuse himself and explained that he had been retained as an expert many times by financial companies but those cases had settled. The panel denied CS’s request to remove Duval. Finally, the panel ruled unanimously in ST’s favor. In district court, CS sought to vacate the award based on Duval’s allegedly misleading or insufficient disclosure of his prior experience. The court confirmed the award, and CS appealed.
Rule of Law
Issue
Holding and Reasoning (Lynch, J.)
What to do next…
Here's why 832,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 46,400 briefs, keyed to 994 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.