(Reuters) – A pension fund sued Credit Suisse Group AG in a US court on Friday, accusing the Swiss bank of misleading investors and managing risk exposure for high-risk clients, including Greensill Capital and Archegos Capital Management.
Pension Funds, City of St. Clair Shores Police & Fire Retirement System, based in St. Clair Shores, Michigan, filed a class action lawsuit in federal court in Manhattan, alleging violations of federal securities laws.
"Specifically concealed counterfeit significant deficiencies in the company's risk policies and procedures and monitoring functions and efforts to allow high-risk clients to take excessive leverage, including Greensill Capital and Archegos Capital Management, expose the company to billions of dollars in losses," the lawsuit said.
Switzerland's second largest bank has been entangled in its exposure to the collapse, first by the British fund Greensill and then by the US investme nt fund Archegos for a month.
Reuters reported last month that Credit Suisse was considering compensating investors affected by the collapse of funds linked to Greensill.
Credit Suisse's asset management unit was forced to close $ 1
Archegos, a single-family office run by former Tiger Asia boss Bill Hwang, paid out its marginal calls from its lenders. lenders to sell large securities to get back what they owed.
The head of Switzerland's financial regulator, FINMA, had questioned Credit Suisse over risks in its dealings with Greensill Capital "months" before the bank was forced to close $ 10 billion in funds linked to Greensill, the Swiss newspaper SonntagsZeitung reported on Sunday.