Credit Suisse Group AG was hit with its first US investor lawsuit over the bank’s recent difficulties, alleging that it overstated its financial prospects to shareholders.
The front entrance of the headquarters of Swiss bank Credit Suisse in Zurich.(AFP) The proposed class-action complaint, filed in federal court in Camden, New Jersey, alleges the bank made “materially false and misleading statements” in its 2021 annual report.
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The suit was filed by the Rosen Law Firm, which specializes in representing individual shareholders in such suits and was also first to sue Silicon Valley Bank after it was put into receivership last week. Complaints filed by bigger investors usually become the main shareholder cases.
In its 2021 annual report, Credit Suisse didn’t identify material weaknesses with its internal controls that have since come to light, according to the complaint.
Following the Feb. 9 release of the bank’s fourth-quarter report for 2022, the price of Credit Suisse American depositary shares fell 15.6%, according to the suit.
The stock tumbled further on news in early March that the bank would delay the publication of its 2022 annual report. Credit Suisse ultimately disclosed on March 14 that it had identified “material weaknesses in our internal control over financial reporting as of December 31, 2022 and 2021,” according to the complaint.
The suit includes an allegation that Chairman Axel Lehmann said in multiple media outlets in December that outflows had “basically stopped” and that few clients had left, when the bank was actually experiencing significant outflows throughout its fourth quarter.
Lehmann is named as a defendant in the complaint along with other current and former officers.
Credit Suisse declined to comment on the complaint.
The case is Turner v. Credit Suisse, 23-cv-01476, US District Court, District of New Jersey (Camden).
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