News Article
ST awarded damages
FINRA awards STMicroelectronics $406 Million against Credit Suisse Securities (USA) LLC
STMicroelectronics have announced that an arbitration panel of the Financial Industry Regulatory Authority (“FINRA”) - in a full and final resolution of the issues submitted for determination - awarded STMicroelectronics, in connection with the sales by Credit Suisse Securities (USA) LLC ("Credit Suisse") to the Company of unauthorized “auction rate securities,” an amount of approximately $406 million comprising compensatory damages, as well as interest, attorney's fees, and consequential damages, which were assessed against Credit Suisse. In addition, ST is entitled to retain the about $25 million interest award which had already been paid.
As previously noted in its 20-F filing of March 2008, STMicroelectronics N.V. had instituted the arbitration against Credit Suisse in connection with the unauthorized purchase by Credit Suisse of collateralized debt obligations and credit link notes instead of the Federally guaranteed student loan securities that had been specifically mandated by the Company for purchase.
Over time, as the credit market negatively developed, the Company recorded other-than-temporary impairment charges for a cumulated amount of $173 million.
Payments by Credit Suisse pursuant to the arbitration award will result in a further strengthening of ST's financial position by increasing current liquidity by about $406 million, against a $242 million less balance in Non Current Assets. At collection, ST will transfer ownership of its portfolio of unauthorized “auction rate securities” with Credit Suisse, and should be able to record a pre-tax gain of about $163 million to reverse impairment losses accrued in Income Statement of prior periods.
As previously noted in its 20-F filing of March 2008, STMicroelectronics N.V. had instituted the arbitration against Credit Suisse in connection with the unauthorized purchase by Credit Suisse of collateralized debt obligations and credit link notes instead of the Federally guaranteed student loan securities that had been specifically mandated by the Company for purchase.
Over time, as the credit market negatively developed, the Company recorded other-than-temporary impairment charges for a cumulated amount of $173 million.
Payments by Credit Suisse pursuant to the arbitration award will result in a further strengthening of ST's financial position by increasing current liquidity by about $406 million, against a $242 million less balance in Non Current Assets. At collection, ST will transfer ownership of its portfolio of unauthorized “auction rate securities” with Credit Suisse, and should be able to record a pre-tax gain of about $163 million to reverse impairment losses accrued in Income Statement of prior periods.
