US Judge Rules UBS Must Face Lawsuits Over Credit Suisse Collapse

A US judge has ruled that UBS must face investor lawsuits over the collapse of Credit Suisse. The bank's holding company operates in four areas: wealth management, investment banking, retail and corporate banking, and asset management. At the end of 2024, UBS had $745.8 billion in current deposits and $580 billion in current loans.

A U.S. judge has ruled that UBS must face investor lawsuits over the collapse of Credit Suisse. The decision comes as investors allege that Credit Suisse issued misleading financial statements prior to its collapse in March 2023, leading to significant financial losses for bondholders. UBS, which acquired Credit Suisse, is now embroiled in legal battles to defend its actions.

The ruling by U.S. District Judge Colleen McMahon allows Core Capital Partners to represent U.S. buyers of Credit Suisse's Additional Tier 1 (AT1) bonds in a case that involves accusations against former executives of the bank. These bonds, valued at zero by Swiss regulator FINMA during UBS’s acquisition of Credit Suisse, resulted in extensive financial losses for bondholders. Another class action regarding American depositary shares and other bonds has also been sanctioned.

Defendants in the case argue that FINMA's actions, not misleading statements, caused the bondholder losses. However, the judge noted that alleged fraud may have contributed to the value drop. The lawsuits underscore the ongoing risks in the financial sector and highlight the importance of transparency and sound management in banking.

For investors, the legal wrangling adds uncertainty to the market. The fallout from the Credit Suisse collapse and the pending lawsuits against UBS could test market stability as outcomes unfold. These events serve as a cautionary tale for financial governance, emphasizing the need for robust governance and transparency to avoid similar pitfalls.

References:
[1] https://finimize.com/content/ubs-faces-investor-lawsuits-over-credit-suisse-collapse