UBS is facing fresh legal trouble in the United States as investors file lawsuits over massive losses tied to the collapse of Credit Suisse's AT1 bonds.
A US judge has ruled that two separate lawsuits can move forward, allowing American investors to seek damages.
According to Reuters, the lawsuits stem from the March 2023 rescue of Credit Suisse by UBS, during which Switzerland's financial regulator, FINMA, ordered $20 billion worth of Credit Suisse Additional Tier 1 (AT1) bonds to be written down to zero.
These bonds are designed to act as a safety cushion for banks, but the sudden wipeout shocked investors worldwide.
Judge Colleen McMahon of the US District Court in Manhattan gave the green light for Core Capital Partners to sue on behalf of US buyers of Credit Suisse AT1 bonds.
She also allowed a separate class-action lawsuit to proceed, involving US buyers of Credit Suisse American depositary shares and other bond types.
The two cases will not be combined, as Core Capital objected to the lead plaintiff in the other case, an NYU professor, accusing him of neglecting the AT1 bondholders' interests.
"UBS must face two lawsuits by investors who said the former Credit Suisse defrauded them prior to its March 2023 demise with false and misleading statements about its financial condition, a U.S. judge ruled on Monday.
— kristen shaughnessy (@kshaughnessy2) July 8, 2025
U.S. District Judge Colleen McMahon in Manhattan said Core… pic.twitter.com/LtjweUmDL2
Investors Blame Credit Suisse for AT1 Bond Wipeout
UBS, which acquired Credit Suisse for $3 billion during the 2023 crisis, has not commented on the lawsuits.
Former Credit Suisse leaders—including ex-CEO Ulrich Koerner, former chairman Axel Lehmann, and former CFO Dixit Joshi—are also named as defendants. Their legal teams have not responded publicly.
The core of the legal claims is that Credit Suisse misled investors about its financial health before the bonds were wiped out.
While UBS and the other defendants argue the losses came directly from FINMA's decision—not fraud—the judge said it's "plausible" that Credit Suisse's actions caused the value of AT1 bonds to drop before FINMA's ruling.
In a related effort to ease investor frustrations, UBS has reportedly issued "goodwill payments" to clients who suffered trading losses, including those affected by the Trump Media stock frenzy earlier this year, FinancialTimes said.
The move is seen as a gesture to repair trust among retail investors and long-time clients.
This legal battle adds to the headaches UBS inherited with the Credit Suisse takeover, which was meant to stabilize Switzerland's financial sector but continues to spark fallout across the globe.
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