Finance
UBS must face US investor litigation over Credit Suisse demise
Published by Global Banking & Finance Review®
Posted on July 7, 2025
2 min readLast updated: January 23, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on July 7, 2025
2 min readLast updated: January 23, 2026
UBS faces lawsuits from US investors over Credit Suisse's collapse, with claims of fraud affecting AT1 bonds and shares.
By Jonathan Stempel
NEW YORK (Reuters) -UBS must face two lawsuits by investors who said the former Credit Suisse defrauded them prior to its March 2023 demise with false and misleading statements about its financial condition, a U.S. judge ruled on Monday.
U.S. District Judge Colleen McMahon in Manhattan said Core Capital Partners may sue on behalf of U.S. purchasers of Credit Suisse Additional Tier 1 bonds, which a Swiss regulator ordered written down to zero as part of UBS' rescue of that bank.
McMahon also said U.S. purchasers of Credit Suisse's American depositary shares and several other bond issues may pursue their separate lawsuit, which she refused to dismiss last September, as a group in a class action.
She declined to combine the two lawsuits, after Core Capital accused the lead plaintiff in the other case, a New York University engineering professor, of having "abandoned" the AT1 bondholders.
UBS declined to comment.
Other defendants include Credit Suisse's former chief executive Ulrich Koerner, former chairman Axel Lehmann and former chief financial officer Dixit Joshi. Their lawyers did not immediately respond to requests for comment.
AT1 bonds are a capital cushion that can support banks during market turmoil.
Though they rank above shares in banks' capital structures, Switzerland's financial regulator FINMA ordered Credit Suisse to write down 16 billion Swiss francs (now about $20 billion) of the bonds, while letting UBS buy that bank for $3 billion.
The writedown shocked investors and prompted many lawsuits in the United States and Europe.
In seeking a dismissal of Core Capital's lawsuit, the defendants said the FINMA-ordered writedown, not any alleged fraudulent misstatements, caused the bondholder losses.
But the judge found it plausible that disclosures of the defendants' alleged fraud caused the value of the AT1 bonds to decline, "ultimately culminating in the eventual write-down of all Credit Suisse AT1 bonds to a value of zero."
In February 2024, McMahon dismissed a separate U.S. investor lawsuit blaming two decades of "continuous mismanagement" for Credit Suisse's collapse.
(Reporting by Jonathan Stempel in New York; Editing by Stephen Coates)
UBS is facing lawsuits from investors who claim that Credit Suisse defrauded them with false statements prior to its collapse in March 2023.
The lawsuits involve Core Capital Partners and U.S. purchasers of Credit Suisse's Additional Tier 1 bonds, along with other bondholders.
The lawsuits were triggered by the Swiss regulator FINMA's order to write down 16 billion Swiss francs of Credit Suisse's AT1 bonds, which shocked investors.
U.S. District Judge Colleen McMahon allowed Core Capital to sue on behalf of AT1 bondholders and declined to combine the two lawsuits.
In February 2024, Judge McMahon dismissed a separate lawsuit that blamed Credit Suisse's collapse on two decades of continuous mismanagement.
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