Credit Suisse Group has agreed to a $32.5m preliminary settlement to end a lawsuit that accused the bank of deceiving shareholders over risky investments in collapsed firms like Archegos Capital Management and Greensill Capital, reported Reuters.
The settlement of the planned class action lawsuit was filed with the US District Court in Manhattan and is subject to approval from a judge.
The lawsuit accused the Swiss bank of getting involved in a high-finance game of Russian roulette through hedge funds and other major clients.
Although the bank has promised to manage its risk limits as well as risk error and credit exposure, it allowed its clients to make precarious, multi-billion-dollar bets with its credit, alleged the lawsuit.
It was also alleged that the laissez-faire practice followed by Credit Suisse has resulted in a loss of at least $5.5bn, which comprises figures from the collapses of Archegos and Greensill Capital.
Credit Suisse dismissed the allegation but agreed to settle the case.
The collapse of Archegos caused nearly $10bn of losses at banks and eliminated over $100bn of shareholder value.
The newly agreed settlement covers investors who bought Credit Suisse ADR between 29 October 2020 and 31 March 2021.
In this case, Sheet Metal Workers Pension Plan of Northern California is the lead plaintiff.