© Reuters. A logo is seen on the headquarters of Swiss bank Credit Suisse on Paradeplatz in Zurich, Switzerland March 16, 2023. REUTERS/Denis Balibouse
By Jonathan Stempel
(Reuters) -U.S. shareholders of Credit Suisse Group AG sued the Swiss bank on Thursday, claiming that the bank defrauded them by concealing problems with its finances.
The proposed class action accuses Credit Suisse of deceiving investors by failing to disclose that it was suffering from “significant” customer outflows, and that it had material weaknesses in its internal controls over financial reporting.
Shareholders led by Braden Turner said that as the truth became known, and Credit Suisse’s largest shareholder said it would not put more money into the bank, investors fled, causing losses as Credit Suisse’s stock price sank to a record low.
The lawsuit appears to be the first by U.S. investors over recent problems at Credit Suisse, which regained some market confidence on Thursday after securing a lifeline to borrow up to $54 billion from Switzerland’s central bank.
Credit Suisse declined to comment on the lawsuit, which was filed in federal court in Camden, New Jersey. Chief Executive Ulrich Koerner and Chair Axel Lehmann are among the other defendants.
Turner, the named plaintiff, sued on behalf of holders of Credit Suisse’s American depositary shares from March 10, 2022, to March 15, 2023.
The law firm representing Turner was also first to file shareholder lawsuits against Silicon Valley Bank parent SVB Financial Group and Signature Bank (NASDAQ:). Regulators seized both of those banks within the last week.
Credit Suisse’s largest shareholder is Saudi National Bank. The Saudi bank’s chairman said in a TV interview on Wednesday that regulatory issues were the main reason it would not add to its 9.9% Credit Suisse stake.
The case is Turner v Credit Suisse Group AG et al, U.S. District Court, District of New Jersey, No. 23-01476.