Switzerland appears in US court

The legal problems stemming from the billion-euro write-off of AT1 bonds during the CS takeover are escalating, with lawsuits now being filed abroad targeting Switzerland. UBS has completed the takeover of Credit Suisse, but the aftermath of the state-organized rescue efforts continues to cause collateral damage. A recent lawsuit filed in a New York court challenges the write-off of AT1 bonds totaling 16 billion francs during the emergency takeover. The plaintiffs argue that the write-off was inappropriate and seek compensation.

This new lawsuit is just one of many cases challenging the actions of Finma and Switzerland in the CS takeover. Foreign investors, including professional investors and wealthy individuals, suffered total losses, leading to numerous legal actions seeking redress. The majority of these complaints are currently pending before the Federal Administrative Court in St. Gallen, where the proceedings have been ongoing for months due to the unprecedented number of cases.

In addition to the domestic legal challenges, international law firms are also pursuing legal action against Switzerland. Several lawsuits are being prepared in multiple countries, arguing that Finma’s actions violate international investment agreements and constitute expropriation. These parallel proceedings seek to hold Switzerland accountable on an international level, with the hope of achieving a faster resolution through arbitration courts.

While the legal battles continue to unfold, the impact of the CS takeover and the subsequent write-off of AT1 bonds has reverberated across the financial landscape. The controversy surrounding the state-ordered write-off has raised concerns about investor protections and the role of regulatory authorities in managing financial crises. As the lawsuits mount both domestically and internationally, the outcome remains uncertain, and the implications for Switzerland’s financial institutions and regulatory framework are significant.