Class action lawsuits against banks are currently en vogue, according to a new study. A Lausanne-based startup is preparing the first Swiss class action lawsuit against Credit Suisse.
According to the startup Legalpass from Western Switzerland, over a thousand shareholders have supported the class action lawsuit against Credit Suisse. The company has extended the participation deadline for its «Credit US» campaign until August 10.
While the Lausanne-based legal firm wants to be the first to launch a Swiss class action lawsuit against the Swiss bank, such lawsuits are very much in vogue in the United States this year. There, bank shareholders are increasingly using class actions to at least partially recoup their losses. A new study by Cornerstone Research and the Stanford Law School Securities Class Action Clearinghouse underscores this finding.
Investors Eager to Sue
In general, the number of securities class action lawsuits filed in the US surged in the first half of the year. According to Clearinghouse's 2023 Midyear Assessment report, plaintiffs filed 114 class actions in federal and state courts, a 23 percent increase over the second half of 2022.
Shareholders of financial institutions are particularly eager to sue. Bank investors filed more class actions in the first six months of 2023 than in all of 2022, with the number of lawsuits filed against banks trending above the historical six-month average of 15.
Consequence of the Financial Tremors
One reason is the tremors emanating from US regional banks that led to numerous failures in the spring, helping to drive Credit Suisse into the arms of UBS. A class action lawsuit by AT1 bondholders seeks to bring former Credit Suisse managers before a New York court. Among those targeted by the plaintiffs are former CEOs Brady Dougan and Tidjane Thiam who are accused of significantly contributing to the decline of the Swiss bank with their risk culture.
Although only six of the 18 newly reported cases were filed against the failed banks, the spreading volatility could lead to more lawsuits, a co-author of the study told the online portal «Law360.»
Crypto Lawsuits at the Forefront
Cornerstone which has been tracking securities-related class action suits since 1997, observes the upswing as an emerging trend. But it remains to be seen whether new lawsuits in the banking sector will continue at the same pace in the second half of the year, it added.
Class actions related to cryptocurrencies continue to be high, with eleven such lawsuits launched this year. Of those, more than half involved cryptocurrency exchanges, a pace if continued throughout the year, is likely to approach last year's record level, according to the study.
In contrast, compared to previous years, the number of class action lawsuits against blank check companies (Spacs) is declining.
