Proactive Investors - Credit Suisse (SIX:CSGN) staff look set to become the latest group to sue Swiss regulator the Financial Market Supervisory Authority (Finma) over the bank’s hasty takeover by UBS Group AG (SIX:UBSG) in March.
Staff are looking to challenge the regulator over US$400mln worth of lost bonuses, which were linked to additional tier one (AT1) bonds rendered void under the US$3.2bn deal.
Senior managers have contacted law firms Quinn Emanuel and Pallas over taking legal action, according to Financial Times’ sources, with each already involved in cases against the regulator.
These are among hundreds of lawsuits filed against Finma, which upset the tradition of prioritising bondholders over shareholders by writing off some US$17bn worth of the AT1s.
Though the bonuses were only partially linked to the bonds, the Swiss government ordered in April that benefits be further cut for executives and staff by between 25% and 100% based on seniority, affecting around 1,000 people.
Investors accounting for a third of the AT1 bonds have already begun suing the regulator in the Federal Administrative Court in St Gallen, in a case coordinated by Quinn Emanuel.
Pallas has also filed a claim against Finma on behalf of institutional investors representing US$1.65bn of the bonds, while cases have also been proposed in the US alleging the bank published false documents prior to the deal, and in Singapore over the country’s free trade deal.