The Law Offices of Frank R. Cruz Announces the Filing of a Securities Class Action on Behalf of Credit Suisse Group AG (CS) Investors
LOS ANGELES, May 21, 2021 /PRNewswire/ -- The Law Offices of Frank R. Cruz announces that a class action lawsuit has been filed on behalf of persons and entities that purchased or otherwise acquired Credit Suisse Group AG ("Credit Suisse" or the "Company") (NYSE: CS) American Depositary Receipts ("ADRs") between October 29, 2020 and March 31, 2021, inclusive (the "Class Period"). Credit Suisse investors have until June 15, 2021 to file a lead plaintiff motion.
If you are a shareholder who suffered a loss, click here to participate.
On March 1, 2021, Credit Suisse froze $10 billion in funds that were invested in financial products from Greensill Capital ("Greensill") and held by its supply-chain investment funds.
On March 8, 2021, Greensill filed for insolvency protection, and more than 1,000 investors in the Greensill funds marketed were unable to exit their positions.
On March 10, 2021, media reports revealed that Greensill investors had retained counsel and intended to sue Credit Suisse for their losses because Credit Suisse continued to market the biggest of the funds as a fully insured, low-risk product despite a decision by insurers during the summer of 2020 not to renew coverage.
On this news, the Company's American Depositary Receipts ("ADRs") fell $1.85, or 12.5%, to close at $12.85 per ADR on March 12, 2021, thereby injuring investors.
On Friday, March 26, 2021, several banks began liquidating billions of dollars' worth of shares that Archegos Capital Management ("Archegos") had swap positions on at fire sale prices after Archegos had failed to meet a margin call. By the time Credit Suisse tried to liquidate its own holdings of stocks underlying Archegos' swap contracts over the following weekend, prices had collapsed and Credit Suisse amassed billions of dollars in losses.
On March 29, 2021, Credit Suisse conceded that "the loss resulting from this exit . . . could be highly significant and material to our first quarter results." The Financial Times then pegged Credit Suisse's estimated losses at between $3 billion and $5 billion, more than a year's worth of the Company's net profit.
On this news, the market price of Credit Suisse ADRs fell another nearly 20%, from a close of $13.21 per ADR on March 25, 2021 to close at $10.60 per ADR on March 31, 2021.
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company's business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that Credit Suisse's co-mingling of its lending, asset management, and private wealth management functions and imprudently aggressive pursuit of fees had materially diminished the Company's ability to properly assess and manage its own risk exposure to high-risk clients and potential liabilities from client losses; (2) that Credit Suisse had ignored numerous red flags in connection with the Greensill funds, such as suspicious shipment activities during an internal compliance check, and overrode the concerns of the Company's in-house credit-structuring team in packing and selling billions of dollars' worth of Greensill-linked securities to investors; (3) that Credit Suisse had conspired to allow Archegos to covertly take on billions of dollars in excessively concentrated and risky positions by utilizing highly leveraged total return swaps, placing the risk of loss associated with these positions on Credit Suisse and its investors; (4) that Credit Suisse was understating its exposure to risk and thus overstating its Tier 1 capital ratios in its public statements; and (5) that Credit Suisse's internal controls were inadequate to ensure that the Company's potential liability to customers and losses arising from its exposure to customer losses were properly accounted for, managed and disclosed to investors.
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If you purchased Credit Suisse securities during the Class Period, you may move the Court no later than June 15, 2021 to ask the Court to appoint you as lead plaintiff. To be a member of the Class you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the Class. If you purchased Credit Suisse securities, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Frank R. Cruz, of The Law Offices of Frank R. Cruz, 1999 Avenue of the Stars, Suite 1100, Los Angeles, California 90067 at 310-914-5007, by email to [email protected], or visit our website at www.frankcruzlaw.com. If you inquire by email please include your mailing address, telephone number, and number of shares purchased.
This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.
SOURCE The Law Offices of Frank R. Cruz, Los Angeles
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