Shares in crisis-hit lender Credit Suisse plunged again on Friday after the bank was slapped with a lawsuit by US investors alleging it overstated its financial prospects to shareholders.
The suit was filed by the Rosen Law Firm, which specialises in representing individual shareholders, and claims the bank made “materially false and misleading statements” in its 2021 annual report.
Credit Suisse was offered the loan after a share price slump prompted by a disclosure that it had “material weaknesses” in its reporting and controls procedures when it published its delayed 2022 annual report. Shares dived even further when the Saudi National Bank – a key investor – declined to buy more stock in the scandal-ridden lender.
The suit alleges the bank did not disclose that “the sharp increase in customer outflows Credit Suisse began experiencing in October 2022 remained ongoing”.
“Accordingly, Credit Suisse had downplayed the impact of the company’s recent series of quarterly losses and risk and compliance failures on liquidity and its ability to retain client funds.”
“As a result, the company’s public statements were materially false and misleading at all relevant times”, it concluded.
Reporting by Frank Prenesti for Sharecast.com
