Investors File Class Action Lawsuits against Credit Suisse
The Telegraph reported that Credit Suisse faces an American style class action lawsuit over losses suffered by investors in its funds that backed the collapsed
The Telegraph reported that Credit Suisse faces an American style class action lawsuit over losses suffered by investors in its funds that backed the collapsed lender Greensill. As per report, US law firm Boies Schiller Flexner held its first group meeting with investors who have been burnt by the Greensill Capital saga to discuss how to pursue litigation. Litigation funders eager to take a slice of any pay outs have also approached lawyers about backing the case, which is likely to centre on mis-marketing claims and even mismanagement.
Separately, Bronstein, Gewirtz & Grossman LLC notified investors that a class action lawsuit has been filed against Credit Suisse Group AG and certain of its officers, on behalf of shareholders who purchased or otherwise acquired Credit Suisse American Depositary Receipts between October 29, 2020 and March 31, 2021. This class action seeks to recover damages against Defendants for alleged violations of the federal securities laws under the Securities Exchange Act of 1934. The complaint alleges that throughout the Class Period, Defendants made materially false and/or misleading statements and failed to disclose material adverse facts. Specifically, the Company concealed material defects in its risk policies and procedures and compliance oversight functions and efforts to allow high-risk clients to take on excessive leverage, including Greensill Capital and Archegos Capital Management, exposing the Company to billions of dollars in losses. Subsequently, as the Company disclosed billions of dollars in losses tied to the collapse of its Greensill-linked funds and the implosion of total return swap positions it had entered into with Archegos, the price of Credit Suisse ADRs to plummeted. A class action lawsuit has already been filed.
The Zurich based Credit Suisse bank has tried to soothe investor concerns last week. It told them it was working closely with Greensill’s administrator Grant Thornton and plans to make claims under relevant insurance policies. Credit Suisse said it still has around USD 2.3 billion at risk in its funds linked to Greensill, adding that it will consider appropriate legal actions to protect fund holders’ interests.
Credit Suisse has had a nightmarish start to the year as a result of its ties to Greensill as well as US hedge fund Archegos. Even before the implosion of the two companies it was fighting to restore its reputation following a major spying scandal in 2019, while Boies Schiller is already advising investors in a UK case against Credit Suisse over its alleged role in Mozambique’s so called tuna bond loans scandal.