US-based law firm Frank R. Cruz has filed a lawsuit against Credit Suisse, representing investors in the Swiss bank, over its dealings with Archegos and Greensill.
The firm said that lawsuit is filed on behalf of investors who purchased Credit Suisse ADR between 29 October 2020 and 31 March 2021.
According to the lawsuit, the Swiss bank made materially false and/or misleading statements with regard to both the scandals.
It also failed to disclose material adverse facts about the company’s business, operations, and prospects during the period, the lawsuit alleged.
The lawsuit also alleges that Credit Suisse ignored several red flags in connection with the Greensill funds, in addition to understating its exposure to risk and thus overstating its Tier 1 capital ratios in its public statements.
Other legal claims include the Swiss bank’s improper assessment rising from co-mingling of lending, asset management, and private wealth as well as aggressive pursuit of fees.
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Recent development at Credit Suisse
Last week, it was reported that a Swiss parliamentary committee will probe Credit Suisse’s multi-billion-dollar losses linked to the collapse of Archegos and Greensill.
Last month, reports said that the Swiss banking giant is planning to raise $1.9bn from investors as a way to rebuild its balance sheet in the aftermath of a $4.7bn hit from the collapse of Archegos Capital.
The same month, Swiss financial regulator Finma launched enforcement proceedings against Credit Suisse in connection to the Archegos collapse.
In March, the Swiss watchdog announced a probe in to the bank’s Greensill losses and the corresponding supply chain finance fund.
The Swiss bank reported a net loss in Q1 2021 driven by the Archegos losses that offset growth across wealth management and investment banking.