Credit Suisse employees are preparing to sue the Swiss financial regulator over hundreds of millions of dollars in bonuses that were canceled after the bank was hastily bailed out by rival UBS earlier this year. financial times reported Monday, adding to the deal’s already significant legal ramifications as the two banks work to finalize the merger.
Senior Credit Suisse employees are preparing to sue the Swiss financial market supervisor, Finma, over its decision to cancel more than $400 million in bonuses following the bank’s bailout by UBS, FT reported, citing multiple people familiar with the matter.
The case stems from the unorthodox decision of Swiss authorities to wipe around $17 billion in bonds as part of the emergency bailout, which has proven to be one of the most controversial parts of the deal and the source of many other legal challenges.
The now-cleared debt helped determine the value of a portion of the bonuses awarded to thousands of Credit Suisse’s top bankers, FT He said, which are usually valid after several years and some of which date back to 2014.
the FT He said that senior managers at the bank had already approached two law firms already involved in prosecuting Finma on behalf of Credit Suisse’s investors – Quinn Emanuel and Pallas – about taking legal action on their behalf as well.
It is not yet clear whether the employee’s situation warrants a case of its own or can be brought to an existing court case, the lawyers told FT.
said a person involved in the discussions FT There is “a lot of overlap” but the situations are “not quite the same”.
UBS agreed to buy Credit Suisse for $3.2 billion in March. The deal, brokered by the Swiss government amid fears the ailing bank’s troubles would precipitate a broader financial crisis, was a steep discount given Credit Suisse’s value, but UBS warned it was an urgent case and gave it little opportunity to do due diligence on such a merger. Requires. Markets fell and investors panicked when the Swiss authorities moved away from the usual practice of prioritizing bondholders over shareholders to compensate in case of failure by eliminating billions of the bank’s bonds before writing off its shares. The decision, which the Swiss regulator defended, sparked a wave of lawsuits, including from bondholders.
UBS warns accelerated rescue of Credit Suisse mail could be ‘more difficult and risky’ than expected (Forbes)
Credit Suisse employees prepare to sue regulator Finma over missing AT1 bonuses (FT)