Former Credit Suisse Managers Reach $115 Million Settlement Over Risk Dispute
In a significant development, UBS Group AG, the successor to Credit Suisse, has agreed to pay a settlement of $300 million to resolve a lawsuit filed by shareholders. The settlement, preliminarily approved by a New York judge on Thursday, is separate from the $115 million settlement agreed upon earlier.
The lawsuit stems from losses that occurred between 2020 and 2021, which were linked to alleged risk management failures by former Credit Suisse executives. Multiple counterparties, including Malachite Capital Management, Greensill Capital Management, and Archegos Capital Management, were involved in transactions that exposed Credit Suisse to financial risks. These firms defaulted, leading to significant losses for the group.
The group, which consists of former Credit Suisse Group AG executives and directors, is accused of failing to maintain adequate risk management. The Employees Retirement System for the City of Providence led the shareholders in the suit against the group.
Interestingly, the settlement for the Credit Suisse mortgage case is not funded by the insurers of the directors and officers, unlike the earlier settlement. Instead, the creditors of UBS Group AG will not be affected by the $300 million settlement.
The settlement was not mentioned in the earlier suit filed by shareholders. However, the court documents referenced in the settlement decision provide further details about the alleged negligence by Credit Suisse's management.
It's important to note that the settlement for the Credit Suisse mortgage case is separate from the group's earlier settlement of $115 million to settle a suit filed by shareholders. The former chairman of Credit Suisse Group AG, Urs Rohner, is not directly named in the lawsuit.
This settlement marks a significant step towards resolving the legal issues arising from the losses at Credit Suisse. UBS Group AG, as the successor to Credit Suisse, will pay the settlement to the group. The exact terms and conditions of the settlement are yet to be disclosed.
As the situation develops, more details about the settlement and its implications will be made available. This article will be updated to reflect any new information. Stay tuned for further updates.
