A lawsuit of more than $1 billion has been filed against Credit Suisse CS , alleging it to have wrongly written-down assets in its trading segment, dating back to 2015 and 2016. The news was reported by a Swiss newspaper, SonntagsZeitung.
The case has been filed by pension funds of the police and fire departments in Birmingham. The plaintiffs charge the bank of providing false and misleading information about some of the high-risk investments that resulted in a large drop in its share price and led to heavy losses for investors.
However, Credit Suisse has condemned the case as "unfounded and without merit." It said that it has analyzed these claims in the last three years and addressed all information queries from regulators.
Currently, the lawsuit awaits U.S. District Court for the Southern District of New York's decision whether to grant it as a class action or not.
In 2015, CEO Tidjane Thiam and his finance chief, David Mathers noted that had been surprised by the large amount of illiquid trades present. Also, they had written them down over a period of two and a half months and reached the $1 billion mark.
On Feb 14, the bank reported full-year 2017 net loss attributable to shareholders of CHF 983 million, which includes CHF 2.7 billion impact related to the re-assessment of deferred assets due to the U.S. tax reform.
Credit Suisse has entered the final leg of its restructuring and remains on track to achieve adjusted operating expenses of below $4.8 billion in 2018. These efforts to improve the bank's financials encourage us. However, persistent legal hassles continue to hurt its reputation.
Shares of Credit Suisse have gained 15.6% over the past year, outperforming 11.4% rally for the industry it belongs to.
The stock carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
Some better-ranked stocks worth considering in the same space are ING Group, N.V. ING , Royal Bank of Canada RY and The Toronto Dominion Bank TD . All these stocks carry a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for ING Group has increased 7.8% for the current year, in the last 30 days. The company's share price has surged 24.6% in the past year.
Royal Bank of Canada has witnessed 1.7% upward earnings estimate revision for 2018, in the last 30 days. Its share price has risen 5.2% in the past year.
Toronto Dominion's shares have gained 7.3% in a year and its earnings estimates for 2018 have moved up 1.7% in the last 30 days.
Don't Even Think About Buying Bitcoin Until You Read This
The most popular cryptocurrency skyrocketed last year, giving some investors the chance to bank 20X returns or even more. Those gains, however, came with serious volatility and risk. Bitcoin sank 25% or more 3 times in 2017.
Zacks has just released a new Special Report to help readers capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. See 4 crypto-related stocks now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Credit Suisse Group (CS): Free Stock Analysis Report Toronto Dominion Bank (The) (TD): Free Stock Analysis Report Royal Bank Of Canada (RY): Free Stock Analysis Report ING Group, N.V. (ING): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research