Credit Suisse

Bottini & Bottini is Lead Counsel in a shareholder class action pending in the United States District Court for the Southern District of New York. The case -- Stevenson v. Thornburgh et al., Case No. 23 Civ. 4458 CM (SLC) -- seeks damages on behalf of all Credit Suisse shareholders who held stock in the company at any point from October 22, 2013 to March 17, 2023. The complaint asserts claims under RICO and under Swiss law against various former executives of Credit Suisse and against its former auditor, KPMG.

In 2022, Credit Suisse’s stock fell to single digits. In mid-March 2023 it reported a $8 billion loss for the previous year. Its new auditor, PwC, admitted that Credit Suisse lacked an “effective risk management process,” and its Internal Controls were, and had been, “materially deficient.” As its stock price continued to fall, Credit Suisse admitted: “The bank could not be saved …. [W]e were no longer able to stem the loss of trust that had accumulated over the years.”
Credit Suisse never entered insolvency proceedings. On Mar. 19, 2023 the Swiss government caused UBS to acquire Credit Suisse, via a Special Decree. Credit Suisse shareholders, denied their right to vote on the deal, got 1 share of UBS for each 22.48 Credit Suisse shares — about 75 cents in value per share of Credit Suisse. Credit Suisse is now a UBS subsidiary.

KPMG LLP was Credit Suisse’s auditor. KPMG knew that Credit Suisse’s Internal Controls were deficient. Nevertheless, for over 20 years, they participated in certifying Credit Suisse’s Internal Controls and financial statements, permitting Credit Suisse to continue to operate and prolonging the course of conduct and conspiracy. For years, KPMG has been vexed by repeated accounting and financial scandals, a record of misconduct unrivaled by any other firm. It was also the worst performing firm in the PCAOB’s annual “surprise” audit inspections, failing 50% of the time. To avoid further negative publicity and detection of the course of conduct/conspiracy, KPMG’s NY partners corrupted PCAOB employees in NY, promising them lush KPMG jobs to steal PCAOB’s confidential list of KPMG audits possibly to be reviewed in future “surprise” inspections. Learning that its Credit Suisse audits were on the “list,” KPMG NY partners destroyed and altered audit work papers to conceal the deficiencies in Credit Suisse’s Internal Controls, as well as KPMG’s deficient audits and improper certifications. KPMG later agreed to a $50 million settlement with the Securities and Exchange Commission stemming from the inspections plot as well as widespread cheating on internal training tests. Six KPMG and PCAOB officials were also convicted in the SDNY of wire and mail fraud in the infamous “Inspection Incident.”

Swiss law required the Credit Suisse Individual Defendants to oversee and supervise the company to assure adequate “financial control systems … as required for the management of the company” and in particular “compliance with the law.” CO Art. 716a. Without adequate Internal Controls, Credit Suisse could not be properly managed. The lack of proper management of Credit Suisse and criminal conduct caused the loss/damage to the Credit Suisse shareholders. The deficiencies were never fixed. Multiple convictions followed. Defendants engaged in a course of conduct and conspiracy, resulting in RICO predicate acts and damaging the shareholders.