Credit Suisse is getting sued over claims that the financial institution misled investors by failing to disclose significant internal control weaknesses ahead of its present liquidity crunch and stock value drop, according to a court complaint.
“The Switzerland-based global investment bank Credit Suisse is facing a shareholder lawsuit over claims that the financial institution misled investors by failing to disclose significant internal control weaknesses ahead of its present liquidity crunch and stock value drop, according to a court complaint filed Thursday.
Credit Suisse made statements in annual financial reports that were ‘materially false and/or misleading because they misrepresented and failed to disclose’ adverse facts pertaining to the bank’s business operations, which were known or ‘recklessly disregarded‘ by it, the filing said.
As a result of Credit Suisse’s alleged wrongful acts and omissions, the suing shareholders are claiming significant losses and damages, the filing said. The class action suit was filed on behalf of all persons or entities who acquired Credit Suisse shares between March 10th, 2022, and March 15th, 2023.
The filing requests the court award damages in favor of the shareholders and demands a trial by jury.
Credit Suisse overstated the company’s financial position and downplayed recent quarterly losses and compliance failures on liquidity and client fund retention, the lawsuit alleges.
Earlier this week, Credit Suisse’s share price plunged nearly 30%, sparking concerns about a liquidity crunch. The incident followed the collapse of several U.S. financial institutions, including Silicon Valley Bank.
The Swiss Financial Market Supervisory Authority said on Wednesday that Credit Suisse meets liquidity requirements, but that the Swiss National Bank will provide liquidity if necessary. On Thursday, Credit Suisse announced the sale of more than $3 billion in assets.
The Swiss Federal Council convened an emergency meeting on Thursday to discuss the situation. Credit Suisse offices in Zurich are working as usual, with no queues at ATMs, an RIA Novosti correspondent reported on Thursday”. -Sputnik News
The Zurich-based bank has been battling recently to recover from a string of scandals and losses as it announced it would borrow up to fifty billion Swiss francs from the country's central bank, the Swiss National Bank.
The loan comes only a day after shares in Switzerland’s second-biggest bank saw a decline of nearly 25%, hitting all-time lows for two consecutive days.
The Swiss Financial Market Supervisory Authority remarked that Credit Suisse met liquidity requirements and that the Swiss National Bank would provide liquidity if necessary.