CS employees apparently want to sue Finma
With the write-off of the AT1 bonds, Credit Suisse employees lost their bonuses. According to a report by the “Financial Times”, they therefore want to sue the Swiss financial supervisory authority.
Credit Suisse employees apparently want to sue the Swiss financial supervisory authority Finma for the loss of bonuses. Over the past few years, they had received millions in compensation linked to so-called AT1 bonds that were canceled by UBS as part of the CS rescue.
The law firms Quinn Emanuel and Pallas have received several requests from senior managers at Credit Suisse to take legal action on their behalf, writes the British business daily Financial Times (online, May 22nd edition). The two law firms mentioned have already filed various lawsuits on behalf of investors who owned AT1 bonds.
As part of the takeover of the second largest Swiss bank by UBS, which was ordered by the Swiss authorities on March 19, Finma declared AT1 bonds (Additional Tier 1) worth a total of around CHF 16 billion to be worthless. These are equity-like bonds with relatively high interest rates – by declaring them worthless, the equity of UBS and the new bank as a whole should be increased by this amount.
Around $400 million in bonuses
According to the FT article, which refers to several people familiar with the matter, it is still unclear at this point in time whether the claims of CS employees can be combined with the existing lawsuits filed by investors against Finma or whether they are asserted separately Need to become.
“We have been contacted by Credit Suisse managers from around the world to see how we can help them,” a person involved in the talks is quoted as saying in the article. There is a lot of overlap between the two positions, but they are not exactly the same.
Bonuses at CS date back to 2014, according to the FT, when senior and director-level employees at the bank were offered a contingent capital award (CCA) linked to AT1 bonds as part of their pay.
CCAs typically accounted for 10 to 15 percent of the total bonus, the FT writes in its article. In 2021, when such bonuses were last granted, more than 5,000 CS employees received them. Overall, it’s about bonuses in this form of around 400 million US dollars.
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