BRIEF-Emergent biosolutions provides update on biothrax procurement contract and discussions with CDC
* Emergent Biosolutions provides update on status of Biothrax procurement contract and discussions with CDC
* Woori alleged losses on mortgage-linked CDOs
* Bank of America, RBS also had lawsuits dismissed
By Jonathan Stempel
NEW YORK, March 27 Citigroup Inc on Wednesday won the dismissal of a lawsuit by Woori Bank over losses from mortgage-related investments, the third such defeat in a U.S. court for a South Korean bank that had been put under state control following financial crises.
U.S. District Judge Laura Taylor Swain said Woori failed to prove that Citigroup acted fraudulently in selling it $95 million of collateralized debt obligations backed by residential mortgage-backed securities.
South Korea's government owns 57 percent of Woori's parent, Woori Finance Holdings Co.
Lawyers for Woori were not immediately available for comment.
In its May 2012 lawsuit, Woori contended that Citigroup knew the CDOs were backed by securities that could and did prove toxic, and which were issued by entities formed by the bank that had no workers, no operating history, and nominal capitalization - "essentially mail drops," as Swain put it.
But Swain said Woori's complaint made only a few specific connections between its CDO purchases and any alleged improper behavior by the third-largest U.S. bank.
"Woori relies on vague and conclusory allegations" regarding Citigroup's alleged knowledge of inadequate underwriting standards, improper treatment of poorly performing loans, and alleged pressure on credit rating agencies to inflate ratings.
"These allegations are insufficient to meet Woori's fraud pleading burden," she wrote. Swain also dismissed a claim of negligent misrepresentation.
The dismissal was without prejudice, and Swain gave Woori 30 days to file an amended complaint.
Created in the aftermath of the 1997 Asian financial crisis, Woori is the South Korean financial sector's biggest victim of the U.S. subprime mortgage crisis, having written off much of a roughly $1.5 billion stake in credit default swaps and CDOs.
In December, a different Manhattan federal judge dismissed Woori's lawsuit against Royal Bank of Scotland Group Plc over losses on $80 million of debt securities.
Then in February, a third Manhattan federal judge dismissed Woori's case against Bank of America Corp's Merrill Lynch unit over losses on $143 million of debt securities.
The case is Woori Bank v. Citigroup Inc, U.S. District Court, Southern District of New York, No. 12-03868.
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