Hundreds of individual shareholders of the former Swiss bank Credit Suisse, including the bank’s former shareholders, plan to file a lawsuit in Zurich’s commercial court on Monday to challenge the takeover of Credit Suisse by UBS, the Financial Times newspaper reported, as cited by Agerpres.

Negotiations on the takeover of Credit Suisse by UBSPhoto: Fabrice COFFRINI / AFP / Profimedia

According to the Financial Times, the Association for the Protection of Swiss Investors (SASV), which represents the interests of retail investors, plans to file a lawsuit on behalf of about 500 Credit Suisse investors who suffered significant losses in March this year when Credit Suisse was taken over by UBS.

The takeover, orchestrated by the Swiss authorities, deprived the shareholders of both banks of voting rights in the deal. The three billion Swiss francs ($3.4 billion) that UBS paid for Credit Suisse represented less than half of Credit Suisse’s market value in the last trading session before the deal was announced.

SASV Secretary General Arik Roschke suggested that UBS was interested in reaching an out-of-court settlement. If the judge rules in favor of the plaintiffs, UBS could be forced to pay compensation to all shareholders, which could cost it billions of dollars, but if a settlement is reached, only the plaintiffs in the suit will receive compensation.

“UBS bought one of the best banks in Europe at a very low price,” says Arik Roschke.

Even if most of the plaintiffs are Swiss, there are also investors from the UK, USA, Germany, Austria, Thailand and Dubai. In addition, many of the plaintiffs are former Credit Suisse employees who purchased stock in the bank they worked for as part of their compensation packages.

“Some of the plaintiffs have worked at Credit Suisse for 30 years, and part of their compensation was in stock,” Roschke added. Some former Credit Suisse employees had shares that were worth more than 80 francs a share 15 years ago, he said, but in the UBS takeover they got just 0.76 francs a share. “These people stayed with the company, and now they have lost everything. It’s sad for these shareholders that they were punished for their loyalty,” said Arik Roschke.

This is the second class-action lawsuit filed by Credit Suisse shareholders against the UBS takeover, and similar lawsuits have been filed by Credit Suisse bondholders after the value of their bonds was significantly reduced in the deal.