Three major Japanese online brokerages are now caught up in the fallout from selling Credit Suisse's AT1 securities.
SBI, Rakuten, and Monex sold Credit Suisse’s Additional Tier 1 (AT1) notes to retail investors in Japan, according to a «Bloomberg» report referencing documents it had obtained from the brokerages.
The firms operate Japan's three major online brokerages, and offered the AT1 notes for a minimum purchase amount of $200,000, according to documents seen by Bloomberg.
One Billion Dollars
By the time the government ordered Credit Suisse to write off its AT1 bonds valued at around $18 billion in March, Japanese investors had purchased about $1 billion worth of the securities.
According to Bloomberg, Mitsubishi UFJ Financial Group's clients bore the brunt of the losses through a venture with Morgan Stanley.
Viability Event
The report claims the possibility of a write-down due to a «viability» event isn't mentioned as a feature of the notes in documents from the three firms. This is exactly what Swiss officials used as justification for wiping out Credit Suisse’s AT1 notes.
According to finance minister Shunichi Suzuki, Japanese investors bought around 140 billion yen ($1 billion) worth of Credit Suisse’s AT1 debt. Clients of Mitsubishi UFJ Financial Group’s securities joint venture with Morgan Stanley accounted for the greatest share of losses.
Several class action lawsuits have been initiated against Credit Suisse, while the Swiss National Bank, Finma, and the Swiss Federal Government have defended their actions related to the write-down of the securities, as finews.com reported.
