Skip to main content

By their nature, annual meetings offer a company’s shareholders the opportunity to reflect on how that company is doing. That opportunity came for Credit Suisse’s shareholders on Friday. And as they surveyed all that has gone on in the past year—from Greensill to Archegos, spying scandals to other spying scandals, settlements and adverse judgments, (alleged) collusion and money laundering and bribery and market manipulation and more collusion, the police raids and suspicious document shredding, the sexism and incompetence, and the Alpine lakes full of red ink that resulted from all of the above and more—and they think, “Yea, we might want to sue the people in charge.”

In what is normally a routine vote to insulate bank officials from lawsuits, around 60% of voted shares went against Credit Suisse for discharging them from legal liability in 2020. The binding vote highlights investors’ deep dissatisfaction with scandal-prone Credit Suisse, including the more than $5 billion it lost from family office Archegos Capital Management’s soured stock positions.

And now that that’s settled, one of those shareholders presumably making up some of that 60% is going to make it official.

The Employees Retirement System for the City of Providence filed the complaint as a derivative action on behalf of all shareholders “to redress injuries that the corporation suffered and will suffer as a direct result” of the alleged failure of oversight, according to the suit. The Rhode Island fund seeks damages on behalf of the investors and a declaration that the defendants breached their fiduciary obligations to the Zurich-based bank…. Because of a “failure to adopt and implement basic modern risk management structures and processes, CS suffered $5.5 billion in losses due to Archegos alone, not to mention extensive harm to its reputation and goodwill,” the fund said, adding that the bank also failed in relation to lender Greensill Capital.

But, hey, the news wasn’t all bad: Credit Suisse won’t have to do some of Providence’s work for it.

The bank won a separate vote to avoid conducting a special audit into its handling of a financing partner, Greensill Capital. Greensill went bankrupt in March 2021, putting at risk billions of dollars in investments in funds Credit Suisse ran via an asset-management arm. Around 88% of voters didn’t support the proposal, which a Swiss foundation representing pension funds had submitted.

Credit Suisse Loses Shareholder Vote to Clear Executives of Liability [WSJ]
Credit Suisse’s Board Sued by Retirement Fund for Archegos Debacle [Bloomberg]

For more of the latest in litigation, regulation, deals and financial services trends, sign up for Finance Docket, a partnership between Breaking Media publications Above the Law and Dealbreaker.


Photo: Getty Images.

Credit Suisse Investor Would Like To Know A Bit More About That $5.5 Billion Loss, Suspects Bank May Not Be Especially Well-Run

In fact, Norges Bank Investment Management would like a pretty thorough check before it forgoes its right to sue everyone.

Photo: Getty Images.

Credit Suisse’s Risk Department Every Bit As Weak, Bullied As Credit Suisse’s Actions Suggest

Despite earlier reassurances to the contrary, where there’s this much smoke, there is a raging risk and compliance fire.

Photo: Getty Images.

Zürich Man Gets Worst Job In World

Congratulations would usually be in order for a promotion, but Rafael Lopez Lorenzo seems more in need of commiserations.

Photo: Getty Images.

Credit Suisse To Stop Doing Thing It Wasn’t Making Any Money On Anyway

But which was putting it a huge legal, regulatory and financial risk for nothing.

Photo: Getty Images.

At Last Thomas Gottstein Has A Credit Suisse Fire Of His Own Making To Fight

The rock of respectability has rolled back down the Alps.

Photo: Getty Images.

Credit Suisse Is Gonna Go Ahead And Cut Off Its Greensill Funds, Future Legal Liability

You mean to tell me that SoftBank and the Swiss joined forces to back a loser?

Getty Images

Swiss May Be Angry Enough About Credit Suisse Constellation Of Scandal To Actually Do Something About It

Maybe insulating bankers from any personal responsibility isn’t as great an idea as they thought.

(Getty Images)

Goldman, Morgan Stanley Didn’t Just (Allegedly) Screw Credit Suisse Over On Archegos Sales

At least one company did not enjoy having its shares dumped, it says in lawsuit form.