DiCello Levitt recently filed a class action in the United States District Court for the Eastern District of New York, seeking damages on behalf of holders of Additional Tier 1 (“AT1”) bonds issued by Credit Suisse Group AG. Our complaint can be reviewed at the following link.
The case arises from the spectacular collapse of Credit Suisse in March 2023 that wiped out over $17 billion of AT1 bonds. The plaintiffs allege that former Credit Suisse directors and executive board members were responsible for the “loss of trust” that led to the collapse and are liable to AT1 bondholders, based on their breaches of their statutory duties.
“We are committed to representing our AT1 clients in identifying the persons responsible for their very significant losses and in seeking to recover those losses,” said Patrick W. Daniels, DiCello Levitt securities litigation practice managing partner.
The view that former directors and executive board members were responsible for the loss of trust is widely shared. Marlene Amstad, board chair of the Swiss Financial Market Supervisory Authority (“FINMA”), has stated that Credit Suisse failed because of “many scandals and bad decisions by management.” Swiss Finance Minister Karin Keller-Sutter referred to Credit Suisse’s board of directors and executive board as “arsonists.” Well-known economist Thierry Philipponnat observed that the bank’s collapse “has been years in the making. We have seen scandal after scandal at Credit Suisse. Banking is all about trust, and trust in Credit Suisse has been broken.”
This focus on conduct in breach of statutory duties distinguishes DiCello Levitt’s case from others filed on behalf of AT1 investors in various venues. The advantages of DiCello Levitt’s approach over the typical U.S. securities fraud action are important. First, the claims DiCello Levitt developed in this case are for negligence, so a showing of fraud, with its burdens of scienter (intent) and reliance, is not necessary. Second, the claims in DiCello Levitt’s actions are made on behalf of bond holders, so purchase dates are not determinative. Furthermore, the case does not fall under U.S. federal securities laws, with its heightened pleading requirements. And, lastly, DiCello Levitt’s case does not focus on or depend upon whether Swiss regulator FINMA was, or was not, correct in declaring a “viability event” with respect to the AT1 bonds.
Please contact Roxana Pierce at [email protected] or +1 301-332-4618 if you have any questions.