© Reuters. FILE PHOTO: The logo of the Swiss bank Credit Suisse is seen in Zurich
By Kanishka Singh
(Reuters) – A pension fund has filed a lawsuit Credit Switzerland (SIX 🙂 Group AG on Friday in a US court, accusing the Swiss bank of misleading investors and mismanaging risks against high-risk clients, including Greensill Capital and Archegos Capital Management.
Pension, St. City Police & Fire Protection Retirement System Clair Shores, based in St. Petersburg Clair Shores, Michigan, filed a class action lawsuit in federal court in Manhattan, accused of violating federal securities laws.
“Specifically, the defendants concealed material deficiencies in the Company’s risk policies and procedures as well as its compliance monitoring functions and efforts to enable high-risk clients to use Excessive leverage, including Greensill Capital and Archegos Capital Management, caused the company to lose billions of dollars, “the lawsuit said.
Switzerland’s second-largest bank was reeling from the collapse of Britain’s Greensill and then US investment fund Archegos within a month.
Reuters reported last month that Credit Suisse is considering compensating investors affected by the collapse of Greensill-affiliated funds.
Last month, Credit Suisse’s wealth manager was forced to close $ 10 billion in a supply chain finance fund to invest in bonds issued by Greensill after the British company lost credit insurance shortly before filing. default application.
The huge loss at Archegos last month prompted Credit Suisse to replace the head of investment and compliance and risk banking after saying it would place a $ 4.7 billion fee in the first quarter due to the next quarter. contact the affected company.
Archegos, the one-family office run by former Tiger Asia director Bill Hwang, was insolvent by margin calls from lenders, prompting lenders to sell large blocks of securities to collect recover the money they owe.
The head of the Swiss financial regulator, FINMA, questioned Credit Suisse about the risks involved in dealing with Greensill Capital “several months” before the bank was forced to close $ 10 billion in its associated funds. Greensill, Swiss newspaper SonntagsZeitung reported on Sunday.
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