Japanese investors to sue for losses incurred on Credit Suisse bonds
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According to the agency Nikkei, Japanese investors are planning to file lawsuits against a number of the country’s leading brokerage firms, including Mitsubishi UFJ Morgan Stanley Securities, due to losses incurred on Swiss bank bonds. Investors will seek compensation from financial firms that sold about $17 billion in AT1 bonds issued by Credit Suisse. These bonds were written down to zero in March during an emergency deals on the bailout of Credit Suisse by another Swiss bank, UBS.
The situation around these bonds is already led in April to file a lawsuit against Swiss banking regulator Finma, which was one of the organizers of the Credit Suisse bailout and its UBS deal.
Merger of UBS with Credit Suisse, according to Reuters, could also lead to Credit Suisse selling its brokerage JV in China. The agency cites local regulators who believe that one foreign bank (that is, the combined UBS – Credit Suisse) cannot simultaneously own majority stakes in two Chinese brokerage JVs. UBS already owns 67% in a local JV with Chinese brokerage BSAM.
According to former Bank of America Securities lawyer Taizu Yamazaki, a lawsuit from Japanese investors will be filed in one of the Tokyo courts. Banks Mitsubishi UFJ and Credit Suisse have not yet commented on reports of investors’ plans to sue.
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