Credit Suisse staff are reportedly preparing to take legal action against the Swiss financial regulator, Finma, over $400 million of bonuses that were canceled after the troubled lender’s rescue by UBS Group AG. Law firms Quinn Emanuel and Pallas have received multiple requests from senior managers at Credit Suisse to take legal action on their behalf.
The Swiss regulator had decided to render around $18 billion of Credit Suisse’s Additional Tier 1 (AT1) debt worthless, which triggered hundreds of lawsuits. Following this, the Federal Council instructed Credit Suisse to cancel or reduce all outstanding bonus payments for the top three levels of management and examine whether those already paid can be recovered.
The legal action is expected to be a test case for the Swiss banking law, which allows the Federal Council to impose bonus-related measures on a systemically important bank if it received state aid from federal funds. Credit Suisse, Finma and the law firms have declined to comment on the matter.