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AT1 bonds: 2,500 creditors file claims against Swiss authorities

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Swiss financial markets regulator FINMA has been under pressure following the UBS-Credit Suisse deal © Keystone / Peter Klaunzer

Switzerland’s Federal Administrative Court has received 230 claims against the country’s financial regulator FINMA after it wrote off the value of Credit Suisse’s AT1 bonds, the court said on Tuesday.

The claims related to 2,500 individual parties, a court spokesman told Reuters.

The court in the north-eastern Swiss city of St Gallen declined to say whether the time limit for filing further claims had expired or the amount of compensation claimed.

The bond holders have sued FINMA after their investments were wiped out during March’s government-orchestrated rescue of Credit Suisse.

+ Credit Suisse staff also taking aim at FINMA over bonuses

Under the takeover deal, holders of Credit Suisse AT1 bonds will get nothing, while shareholders, who usually rank below bondholders in compensation terms, will receive $3.23 billion (CHF2.91 billion).

Law firm Quinn Emanuel Urquhart & Sullivan, which is representing the bondholders, is seeking redress for clients whose assets it said had been expropriated during Credit Suisse’s takeover by bigger rival UBS.

FINMA has defended its decision to impose steep losses on some of Credit Suisse bondholders, saying the decision was legally watertight. The government has also defended the decision.

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