Investors That Agree To Rely On Their Own Due Diligence May Be Held To That Promise

The Southern District of Ohio recently reached an interesting decision that may be relevant to institutional investors in Pharos Capital Partners, L.P. v. Touche, L.L.P. (In re Nat'l Century Fin. Enters.), 905 F. Supp. 2d 814 (S.D. Ohio 2012). There, the plaintiff - a limited partnership which made private equity investments for its limited partner investors - allegedly reached out to defendant Credit Suisse Securities LLC ("Credit Suisse") in search of an investment opportunity in the healthcare sector. Id. at 817-818. Credit Suisse had previously entered into an engagement letter with National Century Financial Enterprises, Inc. ("National Century") - one of the largest healthcare finance companies in the United States at the time - whereby Credit Suisse agreed to use reasonable efforts to arrange for the private placement of equity securities in National Century. Id. at 818. Pursuant to the plaintiff's request, Credit Suisse sent the plaintiff...