Credit Agricole SA (ACA), France’s third- biggest lender, and hedge fund Magnetar Capital LLC were sued by an investor in a collateralized debt obligation that claims to have been defrauded.
Intesa Sanpaolo SpA (ISP) said in a complaint filed yesterday in Manhattan federal court that it lost $180 million after Credit Agricole’s Calyon unit induced it in 2006 to invest in a CDO secretly structured by Magnetar to lose money.
“Calyon itself would have borne that loss had it not fraudulently transferred the risk to Intesa,” according to the complaint.
Intesa claims Calyon told investors that the CDO — known as Pyxis ABS CDO 2006-1 — was based on residential mortgage- backed securities that had been chosen by an independent investment firm, Putnam Advisory Co., when the underlying securities were really selected by Magnetar.
Putnam was also named as a defendant in the case.
“The scheme was designed by Magnetar,” Intesa alleged. “Calyon collected fees on the deal and, through the Pyxis swap, shifted losses on the CDO which it would have otherwise borne itself.”
Intesa, based in Turin, Italy, and formerly known as Banca Intesa SpA, seeks unspecified money damages in its fraud lawsuit. The case is Intesa v. Credit Agricole, 12-cv-2683, U.S. District Court, Southern District of New York (Manhattan), Bloomberg reported.