Zamansky LLC Investigates Potential Investment Fraud Claims Arising From the $17 Billion Write-Down of Credit Suisse Contingent Convertible (CoCo) Bonds

Zamansky is investigating potential investment fraud claims related to the $17 billion write-down of Credit Suisse Group AG’s (Credit Suisse) contingent convertible (CoCo) bonds, also known as Additional Tier 1 (AT1) bonds. These bonds were sold directly to some U.S. investors, while others may have exposure through preferred or other fixed-income funds. The CoCo bonds were initially issued to help banks satisfy capital requirements following the 2008 financial crisis and became popular with investors due to their high yield and perceived low risk of conversion.

On March 19, 2023, UBS announced an all-stock deal to acquire Credit Suisse, with assistance from a $100 billion line of liquidity from the Swiss National Bank. The Swiss government’s extraordinary support triggered a complete write-down of the nominal value of $17 billion of all Credit Suisse AT1 or CoCo bonds.

Investors who purchased Credit Suisse bonds directly through financial advisors such as Morgan Stanley, UBS, or Merrill Lynch may have a claim for investment fraud if the bonds were unsuitable for their investment profile or if the risks were not properly disclosed. Similarly, investors who have indirect exposure to CoCo bonds through funds such as the Morgan Stanley Contingent Convertible Bond Strategy, the Invesco AT1 Capital Bond UCITS ETF (AT1), the WisdomTree AT1 Coco Bond ETF (CCBO), the BlueBay Financial Capital Bond fund, PIMCO Preferred and Capital Security Fund (PFINX), Nuveen Preferred & Income fund (JPT), or other convertible or preferred bond funds may have similar grounds for an investment fraud claim.

What an Investor Can Do

If you hold Credit Suisse CoCo or AT1 bonds or have exposure through a fund, please call investment fraud attorney Jake Zamansky at (212) 742-1414 or email jake@zamansky.com for a free evaluation of your potential legal rights.