French investment bank Calyon filed a $750 million lawsuit yesterday against Mizuho Financial Group, alleging that Mizuho Securities USA and Mizuho International poached several key personnel from Calyon's CDO business.
The suit seeks at least $150 million in compensatory damages and at least $600 million in punitive damages.
Mizuho Securities USA announced the establishment of a New York-based structured-credit and debt capital markets department in December 2006 and hired several members from Calyon's U.S. structured-credit team. The group had worked closely with Mizuho's existing global fixed income group, including an existing structured products team, in both London and Tokyo.
In a statement from Mizuho, the bank adamantly denied Calyon's allegations, stating that the employees left Calyon for Mizuho "on their own violation," and were not recruited by the bank. At the same time, Mizuho noted that none of the former Calyon employees had employment, noncompete or nonsolicitation agreements with Calyon.
"Calyon's allegations of damage to its CDO business caused by the individuals' resignations and their alleged misappropriation of significant, proprietary intellectual property are unsupported by the facts and are inconsistent with Calyon's own public statements about the continued success of its fixed income group," Mizuho said in a press release.
The lawsuit also alleges that the former structured-credit executives interfered with Calyon's customer relationships and transmitted confidential and proprietary business information to Mizuho and to Calyon's customers. These actions have hurt Calyon's market reputation as well as potential business opportunities, according to the lawsuit. Calls to both Mizuho and Calyon were not immediately returned.