* Intesa claimed to lose $180 million on Pyxis CDO
* Judge said Intesa waited one month too long to sue
* Magnetar said to choose, bet against underlying debt
By Jonathan Stempel
NEW YORK, Feb 13 A U.S. judge threw out Intesa
Sanpaolo SpA's lawsuit accusing France's Credit
Agricole SA of causing $180 million of losses by
selling it risky mortgage debt that was designed to fail, saying
the Italian bank waited one month too long to bring its case.
U.S. District Judge Robert Sweet said Intesa had "no chance
of success whatsoever" to recover its entire $180 million
investment in a collateralized debt obligation known as Pyxis
ABS CDO 2006-1, because it did not sue until after the five-year
statute of limitations expired.
The complaint alleged that a Credit Agricole unit then known
as Calyon had marketed Pyxis to unsuspecting investors as an
investment based on residential mortgage-backed securities
chosen in good faith by the independent Putnam Advisory Co.
Instead, Intesa said, Calyon concealed that it was hedge
fund firm Magnetar Capital LLC that had chosen, and then bet
against, the underlying securities.
Intesa did not sue until April 6, 2012, but claimed it beat
the five-year deadline by having participated in an April 24,
2007 credit default swap related to Pyxis.
But Sweet said the latest relevant violation was the last
date of an alleged misrepresentation or omission. He said this
date was March 6, 2007, when Calyon sent Intesa an alleged
fraudulent valuation for Pyxis.
Lawyers for Intesa, Credit Agricole, Putnam and Magnetar did
not immediately respond to requests for comment.
Sweet said Turin-based Intesa could file an amended
complaint within 20 days.
Magnetar was also implicated in a similar scheme involving
another CDO, Squared CDO 2007-1, that resulted in JPMorgan Chase
& Co's agreement in 2011 to pay $153.6 million to
resolve U.S. Securities and Exchange Commission fraud charges.
Intesa's lawsuit is one of thousands filed in U.S. courts
seeking to recover losses on mortgage-backed securities that
ultimately proved toxic. These securities were a key cause of
the 2008 global financial crisis.
The case is Intesa Sanpaolo SpA v. Credit Agricole Corporate
and Investment bank et al, U.S. District Court, Southern
District of New York, No. 12-02683.