Skadden won a significant dismissal in a Section 10(b) suit on behalf of Société Générale (and several of its current and former officers and directors) alleging that SocGen knowingly understated its exposure to subprime mortgages through its CDO investments and knowingly misstated the strength of its risk management controls after a rogue trader in France circumvented these controls and put billions of euros at risk in unhedged trades. In January 2008, these events allegedly caused a loss to the bank of approximately 6 billion euros.
On Sept. 29, Judge Richard Berman of the U.S. District Court for the Southern District of New York granted the defendants’ motion to dismiss in its entirety with prejudice. Relying on the U.S. Supreme Court’s decision in Morrison v. National Australia Bank, Judge Berman held that none of the plaintiffs (including U.S. investors) could bring a Section 10(b) claim.