Over 100 Singapore-based investors in Credit Suisse’s AT1s have joined a class action lawsuit to recover ~$100mn in losses. These investors have joined the suit under law firm Withers and the number of investors are increasing daily. As per BT, these investors, who said they have a conservative risk profile, are mostly in their 50s and are saving for their retirements – they bought one lot of the AT1s under the minimum denomination of $200,000. Some of the investors said that the clause regarding the wipeout of its AT1s was not highlighted by their bankers/relationship managers. For example, a 54-year-old self-employed man told BT that he had signed several blank forms that his RM subsequently filled for him. The investor added that he was unaware of being categorized as an aggressive risk-taker by his RM. Other law firms like WilmerHale and Engelin Teh Practice in Singapore are also representing AT1 holders who have incurred losses.

As per interviews conducted by BT with bondholders in Singapore, there are three options to seek recovery:

  • Sue the local bank/financial institution directly
  • Join others in a class action based on the breach of the European Free Trade Agreement (EFTA)
  • Join others in a class action to overturn FINRA’s regulatory decision

Each of the above options come with their pros and cons and it remains to be seen how bondholders move forward to seek repudiation.

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