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A number of CS management employees are taking legal action against the cancellation of millions of bonus payments as part of the CS emergency recovery. As the court spokesperson explained when asked by the AWP news agency, at the end of May the Federal Administrative Court (BVGer) received three complaints on behalf of about 50 complainants against the relevant Finma decision.
The spokesperson said Wednesday that the Federal Administrative Court could not provide further information such as the amounts in question. Last week, various media outlets reported that several law firms were asked by CS executives to take legal action on their behalf against the cancellation of the so-called Contingent Capital Awards (CCA).
On March 19, as part of the emergency takeover of UBS, the financial market supervisor Finma instructed CS to declare all additional Tier 1 capital instruments (AT1) as well as contingent capital awards linked to AT1 instruments as worthless. According to CS’ latest annual report, CCAs worth CHF 360 million were outstanding at the end of 2022.
Credit Suisse initially took the view that the CCA was unaffected by the measure. However, in another decision dated March 22, Finma rejected CS’ opinion and made it clear that the decision to delete AT1 instruments also covers CCA.
The big bank then applied to the Federal Administrative Court for injunctive legal protection. The court granted the request, but required an appeal against Finma’s decision. However, on May 9, CS informed the court that it had decided not to appeal, and the Federal Administrative Court dismissed the case.
Since 2014, CS has been offering deferred compensation in the form of contingent capital awards to executive and director-level employees. However, CS did not use this instrument in fiscal year 2022. In 2021, approximately 5,100 employees had received such CCAs.
The fact that AT1 devices were declared worthless by Finma as part of the CS emergency rescue also caused a huge international sensation and led to numerous complaints from AT1 bond holders. A spokesperson for the Federal Administrative Court reported on Wednesday that around 250 complaints were received by the end of May and filed on behalf of a total of 2,500 complainants.
Complainants are of the opinion that it is not necessary to write off the bonds as CS always meets the regulatory capital requirements. (pbe/SDA)
Source :Blick
I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.
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