The lawsuit facing Swiss regulator FINMA from Credit Suisse shareholders is gathering steam, with additional plaintiffs joining the group appeal.
The suit, brought by law firm Quinn Emanuel Urquhart & Sullivan, is seeking to appeal against FINMA's CHF16 billion writedown of Credit Suisse Additional Tier 1 (AT1) bonds during the government-assisted rescue of the bank earlier this year.
The law firm on Thursday said that it now is representing over 1,000 bondholders that hold approximately a third of the total notional value of the AT1 bonds.
FINMA in March said that the decision to impose losses on bondholders was legal and that emergency government legislation allowed for a total write-down in a ‘viability event’
AT1 bonds were engineered in the wake of the 2008 financial crisis to ensure that investors carry the burden of risk for a bank as opposed to tax holders. Credit Suisse bondholders however have been seeking legal advice as the rescue went against the established precedent of prioritising bondholders over shareholders.
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