A recent federal appellate ruling in favor of Credit Suisse in a fraud action brought by Pharos Capital has strengthened the case for using so-called "Big Boy" letters. Pharos held that a well-drafted Big Boy letter made it impossible for an investor to show justifiable reliance and thereby doomed state law fraud and misrepresentation claims. While these letters may not entirely block federal securities claims, they are a potent tool for limiting any claim that requires a showing of reliance.
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