Investors Plan Lawsuit to Challenge UBS Acquisition of Credit Suisse

The Financial Times reported on Sunday that retail investors who lost money when UBS acquired Credit Suisse in March plan to file a lawsuit to challenge the takeover.

Swiss Investor Protection Association to File Lawsuit on Behalf of Investors

The newspaper reported that the Swiss Investor Protection Association intends to file a lawsuit with the Zurich Commercial Court on Monday on behalf of about 500 investors in Credit Suisse shares.

Hundreds of Individual Shareholders to Join Lawsuit

The newspaper reported that on Monday, hundreds of individual shareholders, including dozens of former employees of the bankrupt bank, are due to file a lawsuit in the Zurich Commercial Court.

Swiss Investor Protection Association to Represent Credit Suisse Investors

The Swiss Investor Protection Association (SASV), which represents the interests of individual investors, plans to file a lawsuit on behalf of about 500 investors in Credit Suisse, who suffered huge losses when the bank was bailed out by rival UBS in March.

Loss of Shareholders’ Rights in UBS Takeover

The takeover, organized by the Swiss authorities, deprived the shareholders of both banks of the right to vote on the deal. The CHF3 billion ($3.4 billion) paid by UBS for Credit Suisse was less than half the bank’s market value on the last trading day before the deal and part of its book value.

Multiple Lawsuits Filed Against UBS by Credit Suisse Shareholders

This is the second Class I lawsuit by Credit Suisse shareholders against UBS, while Tier 1 capital holders have filed many lawsuits that have lost their money.

UBS Announces Independence from Government Support

UBS announced last week that it no longer needed government support for the takeover, which could help ease public anger over the deal ahead of national elections in October.

Swiss Merger Law Case to be Filed by SASV

SASV plans to file a Swiss merger law case on Monday with a deadline of two months from the deal’s signing date in June. The judge is expected to rule on the case within a year.

Incentive for UBS to Address the Issue

SASV General Secretary Eric Ruschke suggested that UBS has an incentive to address the issue. He noted that if the judge rules in the interests of the plaintiffs, UBS could be required to pay all shareholders, which could cost billions of dollars, although if the issue is settled out of court, only the plaintiffs will receive compensation.