Core Capital Partners, Ltd. v. Credit Suisse Group AG et al

NATURE OF THE ACTION

1. This is a federal securities class action on behalf of a class consisting of all persons and entities other than Defendants that purchased or otherwise acquired Credit Suisse additional tier-one bonds (“AT1 Bonds”) in a domestic transaction in the U.S. between February 18, 2021 and March 20, 2023 , both dates inclusive (the “Class Period”), seeking to recover damages caused by Defendants’ violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder, against the Company and certain of its top officials.

2. Credit Suisse, together with its subsidiaries, provides various financial services in Switzerland, Europe, the Middle East, Africa, the Americas, and Asia Pacific. The Company offers wealth management solutions, including investment advice and discretionary asset management services; risk management solutions, such as managed investment products; and wealth planning, succession planning, and trust services.

3. Prior to its eventual takeover by UBS Group AG (“UBS”), Credit Suisse’s securities offerings included, among other types of investments, AT1 Bonds, also known as “contingent convertibles” or “CoCo” bonds, which act as shock absorbers if a bank’s capital levels fall below a certain threshold. AT1 Bonds can be converted into equity or written off, and they make up part of the capital cushion that regulators require banks to hold to provide support in times of market turmoil. According to the Swiss Financial Market Supervisory Authority (“FINMA”), in a press release dated March 23, 2023 , entitled “FINMA provides information about the basis for writing down AT1 capital instruments” (the “AT1 Bond Advisory”), Credit Suisse’s AT1 Bonds “contractually provide that they will be completely written down in a ‘Viability Event’, in particular if extraordinary government support is granted.”

4. As reported to the Financial Industry Regulatory Authority (“FINRA”) via FINRA’s Trade Reporting and Compliance Engine (“TRACE”), which helps FINRA track domestic trading in certain securities, including AT1 Bonds, during the Class Period, the total U.S. trading volume of the series of Credit Suisse AT1 Bonds that Plaintiff purchased (ISINs: USH 3698 DDD33 (“Series DD33”), USH 3698 DBZ62 (“Series BZ62”), and USH 3698 DCV40 (“Series CV40”)) exceeded $1.2 billion.¹ This represents merely a subset of the various Credit Suisse AT1 Bonds that were traded by the Class during the Class Period, meaning that the total domestic trading volume for all AT1 Bonds traded during the Class Period is even larger.

5. Before the start of the Class Period, Credit Suisse’s financial condition and reputation had been negatively impacted by a variety of high-profile scandals. More recently, the failure of Credit Suisse’s funds structured in collaboration with U.K.-based financier Lex Greensill (“Greensill Funds”) and the collapse of Archegos Capital Management (“Archegos”), a hedge fund for which Credit Suisse had significant, undisclosed exposure, forced Credit Suisse to incur substantial losses and reveal critical risk management and control governance failures in March 2021 . During the Class Period, Defendants assured investors and the market that the Company would remediate deficiencies in its risk management and/or control governance procedures and/or policies.

6. In October 2022 , Credit Suisse began experiencing a sharp increase in customer outflows, or withdrawals of client funds, after a series of quarterly losses and risk and compliance failures. In the months following these outflows, Defendants reassured investors that the rate of customer outflows had either reversed or else completely stopped.

¹See Financial Industry Regulatory Authority (FINRA) Trade Reporting and Compliance Engine (TRACE), via Bloomberg Finance L.P.