Tue, May 23rd 2023
In the weeks since Switzerland’s financial regulator (FINMA) announced that it had backed a shotgun merger between UBS and Credit Suisse (CS), at least 2,500 parties have filed 230 lawsuits against FINMA contesting the value of CS’s AT1 bonds.
Under the merger, FINMA sanctioned rendering CHF 16.2 billion of CS’s Additional Tier 1 (AT1) bonds worthless – triggering upheaval in the markets. Meanwhile, CS shareholders will receive nearly CHF3 billion. The deal overturned a long-standing practice of putting bondholders before shareholders in debt recovery.
The bondholders are seeking compensation for clients whose assets have been confiscated, according to representatives from the international law firm Quinn Emanuel Urquhart & Sullivan.
FINMA officials and the Swiss government say their decision was legally indisputable.
This week CS employees announced that they, too, are preparing to sue FINMA over canceling CHF 360 million in bonuses.
In the weeks following the merger announcement, the Swiss government instructed CS to cancel or reduce outstanding bonuses for the top three levels of managers. According to Swiss banking laws, the government can direct such decisions if the bank in question has received federal aid.
According to lawyers from Quinn Emanuel and Pallas law firms, CS senior managers do not think the move was legal and have retained them to take legal action on their behalf.
Stay tuned.
This article may be freely shared and re-printed, provided that it prominently links back to the original article.
English 
German 
French 
Spanish 
Arabic