US investors in Credit Suisse file legal action
London, March 17 US investors in Credit Suisse have hit the beleaguered Swiss bank with legal action, claiming that it overstated its prospects before this week’s shares crash, The Guardian reported.
The lender suffered a rapid sell-off with shares plunging as much as 30 per cent on Wednesday after comments from Credit Suisse’s largest shareholder, Saudi National Bank (SNB), which said it was unable to pump in more cash because of regulatory restrictions limiting its holding to below 10 per cent.
The Swiss central bank later stepped in to offer Credit Suisse a £44.5bn lifeline and the shares rallied, recovering some of their losses Thursday.
But Rosen Law Firm, a class action lawsuit specialist, has lodged a complaint in a court in Camden, New Jersey which claims the bank made “materially false and misleading statements” in its 2021 annual report, The Guardian reported.
The lawsuit would represent the first instance against Credit Suisse since the crisis rapidly devalued shareholders’ investments.
Last week Credit Suisse admitted it had “material weaknesses” in its reporting and controls procedures when it published its delayed 2022 annual report. It said this could have resulted in “misstatements” of financial results.
Credit Suisse shares shed earlier gains and fell 4 per cent as worries about Switzerland’s second-biggest bank remain, The Guardian reported.
The shares had opened 1.8 per cent higher in volatile trade, and are now down 3.6 per cent at 1.95 Swiss francs. On Wednesday, they plunged to a record low of 1.55 francs and closed 25 per cent lower.
On Thursday, the shares recovered 19 per cent of their value after Credit Suisse secured an emergency liquidity line from the Swiss central bank. The head of Credit Suisse’s Swiss banking division, Andre Helfenstein, said the cash would allow the bank to carry on with its overhaul but admitted it would take time to win back client confidence, The Guardian reported.