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July 10, 2020
NEW YORK (Reuters) – Credit Suisse Group AG <CSGN.S> agreed to pay $15.5 million to settle a lawsuit accusing it of defrauding shareholders about its risk appetite and management before taking $1 billion of writedowns on souring debt, court filings on Friday show.
The preliminary settlement of the proposed class action by holders of the Swiss bank’s American depositary receipts from March 2015 to February 2016 requires approval by U.S. District Judge Lorna Schofield in Manhattan federal court.
Investors led by four pension and retirement plans in New York, Illinois and Alabama claimed they lost money after the bank misled them by touting its “comprehensive” risk controls and “binding” limits on its exposure to risky and illiquid debt.
Credit Suisse took two writedowns in early 2016 on $4.3 billion of collateralized loan obligations and distressed debt, contributing to its first full-year loss since the 2008 global financial crisis.
The bank denied wrongdoing in agreeing to settle, and had previously argued it had no intent to defraud. It did not immediately respond to requests for comment.
(Reporting by Jonathan Stempel in New York; Editing by Richard Chang)
