Credit Suisse hit by US lawsuit over writedowns, says case “without merit”

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Credit Suisse hit by US lawsuit over writedowns, says case “without merit”


The logo of Swiss bank Credit Suisse is seen at a branch in Winterthur, Switzerland November 2, 2017. REUTERS/Arnd Wiegmann
Logo
of Swiss bank Credit Suisse is seen in
Winterthur

Thomson
Reuters


ZURICH (Reuters) – Credit Suisse faces a U.S. class action
lawsuit over $1 billion in writedowns it took in 2015 and 2016
linked to its trading division, Swiss newspaper SonntagsZeitung
reported on Sunday, but the Swiss bank said the case was “without
merit”.

Starting in 2015, newly named Credit Suisse Chief Executive
Tidjane Thiam and his finance chief, David Mathers, were caught
off guard by the scale of their trading division’s illiquid
trades. They were forced to write down their value.
[http://reut.rs/2BmJiVU]

Now, a class action lawsuit in New York accuses the bank, Thiam
and Mathers of giving false and misleading information about
risky investments that led to a drop in Credit Suisse’s share
price, costing investors millions, the newspaper reported.

The plaintiffs in the case include the pension funds of fire
departments and police departments in the U.S. city of
Birmingham.

Asked by Reuters to comment on Sunday, Credit Suisse said in a
statement: “The claim is unfounded and without merit.”

“In the last three years, Credit Suisse has analyzed these
allegations and responded to information requests from
supervisory bodies.  All regulatory reviews were closed
without any action against Credit Suisse,” it said.

The bank has been in the news recently for legal challenges and
inquiries linked to it or former employees.

On Friday, an ex-Credit Suisse wealth manager was sentenced to
five years in jail for defrauding clients including former
Georgian prime minister Bidzina Ivanishvili and Russian oligarch
Vitaly Malkin.

Former U.S.-based brokers also accuse the bank of withholding up
to $300 million of pay after their private banking unit was
shuttered in 2015. The bank has said that lawsuit has no merit.

Additionally, Switzerland’s FINMA financial industry watchdog has
contacted the Zurich-based bank after it decided to terminate a
product linked to market volatility after its value plunged
during a recent rout of global stock markets.

Credit Suisse releases 2017 figures on Wednesday.

(Reporting by John Miller; Editing by Gareth Jones)

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