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The
lawsuit filed in New York Supreme Court on Tuesday seeks to claw
back compensation from the 20 defendants on behalf of the
company, which lost $5.5 billion in the Archegos meltdown.
The Employees Retirement System for the City of Providence
alleged that the officers and directors were negligent under
Swiss law, and their failures left the brokerage vulnerable when
Archegos imploded a year ago.
"The fundamental problem was that CS's board did not provide the
resources, people, technology, systems, and controls needed to
comprehend the overall risk the bank was taking on, much less
manage that risk," the retirement fund said.
Credit Suisse declined to comment on the lawsuit on Friday.
Archegos, which had $36 billion in assets, imploded last year
when it was caught short on highly leveraged trades.
The scandal sparked a fire sale in stocks including ViacomCBS
and Discovery Inc, and caused Credit Suisse, Nomura Holdings and
other lenders to lose billions on their trades with Archegos.
Archegos founder Bill Hwang and Chief Financial Officer Patrick
Halligan were released on bail on Wednesday after being charged
with fraud and racketeering for lying to banks about the family
office's holdings. Hwang was also charged with stock
manipulation. Both pleaded not guilty to the charges.
(Reporting by Jody Godoy; Editing by Cynthia Osterman)
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