Credit Suisse investors may receive additional information about the case by clicking the link "Submit Your Information" above.
Credit Suisse is a global financial services company based in Zurich, Switzerland. Greensill Capital (“Greensill”), who for filed for insolvency protection on March 8, 2021, was a financial services company based in the United Kingdom and Australia focused on the provision of supply-chain financing and related services. Archegos Capital Management (“Archegos”) is a family office investment fund run by Sung Kook Hwang. Archegos’ investment holdings are primarily in the form of total return swaps, a financial instrument where the underlying securities are held by the banks that broker the investments.
On March 1, 2021, Credit Suisse froze $10 billion in funds that were invested in Greensill’s financial products and held by its supply-chain investment funds. On March 8, 2021, Greensill filed for insolvency protection, as it found itself unable to repay a $140 million loan to Credit Suisse. According to the Financial Times, more than 1,000 investors in the Greensill funds marketed were unable to exit their positions. By March 10, 2021, media reports revealed that Greensill investors had retained counsel and intended to sue Credit Suisse for their losses because Credit Suisse continued to market the biggest of the funds as a fully insured, low-risk product despite a decision by insurers during the summer of 2020 not to renew coverage. As the market digested this news, the market price of Credit Suisse ADRs fell from its close of $14.70 per ADR on March 1, 2021 to close at $12.85 per ADR by March 12, 2021, a decline of almost 13%.
Then, on Friday, March 26, 2021, several of the large banks offering prime brokerage services to Archegos – including Morgan Stanley, Goldman Sachs and UBS – suddenly began liquidating billions of dollars’ worth of shares that Archegos had swap positions on at fire sale prices after Archegos had failed to meet a margin call. By the time Credit Suisse tried to liquidate its own holdings of stocks underlying Archegos’ swap contracts over the ensuing weekend, prices had already collapsed and Credit Suisse quickly racked up billions of dollars in losses. Credit Suisse issued a press release on March 29, 2021 conceding that “the loss resulting from this exit . . . could be highly significant and material to our first quarter results.” The Financial Times then pegged Credit Suisse’s estimated losses at between $3 billion and $5 billion, more than a year’s worth of Credit Suisse’s net profit. The Wall Street Journal reported on March 31, 2021 that Credit Suisse “had a core capital buffer of 12.9% at year-end” and “[i]f the Archegos hit is $4 billion, that ratio could fall by roughly 1 percentage point to well below the 12.5% minimum targeted by the lender.” The market price of Credit Suisse ADRs fell another nearly 20% following this news, declining from a close of $13.21 per ADR on March 25, 2021 to close at $10.60 per ADR on March 31, 2021.
The complaint alleges that throughout the Class Period, the defendants concealed material defects in Credit Suisse’s risk policies and procedures and compliance oversight functions and efforts to allow high-risk clients to take on excessive leverage, including Greensill and Archegos, exposing Credit Suisse to billions of dollars in losses.
If you are a member of the class described above, you may no later than June 15, 2021 move the Court to serve as lead plaintiff of the class, if you so choose.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Filling out the online form above or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.
If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Kessler Topaz Meltzer & Check, LLP: James Maro, Esq. (484) 270-1453 or Adrienne Bell, Esq. (484) 270-1435; toll-free at (844) 887-9500; or via e-mail at firstname.lastname@example.org. If you would like additional information about the suit, please click on the link "Submit Your Information" above and fill out the form as promptly as possible.