Credit Suisse Group bondholders, representing $4.5 billion (CHF4 billion) of the $17 billion of wiped-out Additional Tier 1 bonds of the company, have filed a lawsuit against Switzerland’s banking regulator, the Financial Times reported on Friday.
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Gli obbligazionisti del Credit Suisse citano in giudizio l’autorità di vigilanza svizzera per l’azzeramento delle obbligazioni
The complaint says the regulator, FINMA, acted unconstitutionally, by failing to behave “proportionately” and “in good faith” when it ordered Credit Suisse to cancel the AT1 debt, the FT report saidExternal link.
This move by the Swiss regulator in mid-March angered bondholders who thought they would be better protected than shareholders in a rescue deal with UBS earlier in the month.
The lawsuit was filed by the law firm Quinn Emanuel in the city of St Gallen in eastern Switzerland on Wednesday, the FT said.
“FINMA’s decision undermines international confidence in the legal certainty and reliability of the Swiss financial centre,” Thomas Werlen, the law firm’s managing partner in Switzerland, said in a statement.
The bondholder group holds a “significant” percentage of the total notional value of the bonds, Quinn Emanuel said earlier this month when it was hired by the bondholders group.
Last month’s government-backed shotgun marriage between Switzerland’s two biggest banks saw Credit Suisse taken over by rival UBS for CHF3 billion. It was propped up with a total of over CHF250 billion in guarantees and support which has since drawn widespread criticism.
FINMA declined to comment on the lawsuit to Reuters. Credit Suisse did not immediately respond to a Reuters request for comment.
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