Was Credit Suisse worthless? What UBS knew before the deal

UBS had seen Switzerland’s emergency ordinance before agreeing to pay SFr3bn for Credit Suisse. It had also asked the authorities to remove shareholders’ right to challenge the price in court. That request was refused.

Both details appear in the parliamentary inquiry into the rescue. Together, they complicate a defence of the March 2023 takeover: that Credit Suisse was effectively worthless and its shareholders should regard any positive payment as adequate.

In the November issue of Aktuelle Juristische Praxis, Zurich lawyer Philipp H. Haberbeck challenges that proposition. His argument is not that Credit Suisse was healthy, or even that SFr3bn was necessarily too little. It is that the price must be assessed against the supported transaction UBS agreed to undertake, rather than a hypothetical collapse without that support.

The distinction matters beyond the shareholder litigation. Valuing the bank at the end of the crisis does not answer a separate question: whether investors were misled before it. A study by Célian Hirsch, a law professor at the University of Lausanne, identifies Swiss legal grounds for claims of the kind already being pursued in New York. For UBS, the two inquiries concern different parts of the same acquisition: the consideration it paid and the civil liabilities it inherited.

A rescue is not a valuation

The immediate target of Haberbeck’s criticism is an August commentary in Bilanz by Daniel Daeniker, a partner at the Swiss law firm Homburger. Daeniker helped lead the team advising Credit Suisse on the rescue and merger. Haberbeck, for his part, represents AT1 appellants.

Daeniker’s case starts with the run on the bank. Capital ratios could not keep Credit Suisse alive if customers continued withdrawing their money. UBS was the only willing buyer of the whole group, with little time for due diligence and substantial risks to absorb. Against the alternative of collapse, he argues, any price above zero was defensible. He dismisses conventional valuation methods, including discounted future cash flows, as irrelevant against the prospect of collapse.

He compares Credit Suisse to Schrödinger’s cat: unable to survive alone, yet alive with public assistance and the merger.

Haberbeck’s objection concerns the choice of comparison. A bank that would fail without help is not necessarily worthless in a transaction that comes with help. The crisis may reduce its value; it does not eliminate the need to establish that value.

The parliamentary inquiry, known as the PUK, provides the chronology. The Federal Council adopted the emergency ordinance on March 16, 2023, with effect from 8pm. It was not published until March 19. UBS received access on March 18, before the final price was agreed.

The report does not establish whether UBS saw the March 16 text or a draft of the March 19 amendments, as Haberbeck acknowledges. But the buyer was negotiating with knowledge of the planned rescue measures. In his analysis, the relevant assessment must include the support already adopted or promised as part of the transaction. It cannot assume that support away.

The price negotiations reinforce the point. Daeniker describes the SFr3bn consideration as freely negotiated between the banks, without the authorities’ involvement. The PUK records a different account.

In Box 21, the inquiry reports the UBS chairman’s testimony that he negotiated the price with the authorities, not Credit Suisse. It links the rise in UBS’s offer from SFr1bn to SFr3bn to an increase in the proposed federal loss guarantee from SFr5bn to SFr9bn. Officials denied negotiating or setting the price. The commission nevertheless found that their negotiations over guarantees and other conditions directly influenced UBS’s offer.

The price and the protection were therefore connected. UBS’s own March 19 announcement described SFr25bn of downside protection. Chairman Colm Kelleher said the deal would “preserve the value left in the business while limiting our downside exposure”.

That does not settle what Credit Suisse’s shareholders should have received. It does explain why Haberbeck rejects a valuation premise that treats the business as though the support known to its buyer did not exist.

The right UBS tried to exclude

There is a second, more pointed part of Haberbeck’s argument: the authorities deliberately preserved the remedy UBS now faces.

Articles 7 and 105 of the Swiss Merger Act provide the framework for testing whether shareholders’ interests were adequately protected in the exchange. Credit Suisse shareholders received one UBS share for every 22.48 shares they held, equivalent at the agreed valuation to SFr0.76 per Credit Suisse share.

The PUK records UBS’s request to disapply Article 105 of the Swiss Merger Act. The Federal Office of Justice and the Federal Finance Administration’s legal service pressed to preserve access to a court. The Federal Council left the provision in place.

Shareholders were denied a vote on the merger but retained the right to contest its financial terms. Haberbeck’s objection is that a rule treating every positive price as adequate would preserve that right formally while depriving it of much of its substance.

The Zurich Commercial Court has commissioned a going-concern valuation: an assessment of Credit Suisse as a continuing business, rather than a liquidation. A June update from the Swiss investor protection association said the appointed experts had begun work and requested further documents.

Haberbeck accepts that the emergency and the bank’s dependence on a merger belong in the valuation. His contention is that they cannot make valuation unnecessary.

The claims neither Swiss dispute answers

Neither the dispute over the share exchange ratio nor the litigation over the cancellation of Credit Suisse’s Additional Tier 1 bonds addresses the central question in the American fraud cases: did the bank’s former leaders mislead investors and thereby cause a direct loss to their personal wealth?

These claims concern the information investors received before the rescue, not simply the terms imposed during it. That distinction has received much less attention in Switzerland than the takeover price or the AT1 write-off.

The contrast between public reassurance and internal events is central to Hirsch’s study. On October 31, 2022, chief executive Ulrich Körner said customer outflows had stabilised. The following day, he activated the final stage of the bank’s contingency funding plan. Those assurances about outflows and liquidity subsequently became part of the New York litigation.

On December 5, chairman Axel Lehmann described the business as “definitely stable”. That same day, according to the PUK record cited by Hirsch, FINMA told the other federal financial authorities that outflows were continuing and a substantial improvement was not expected before year-end.

In the final week, Körner’s March 14 assurances about inflows and liquidity were followed on March 15 by Lehmann’s statement that government assistance was “not a topic whatsoever”. Credit Suisse announced plans to borrow up to SFr50bn from the Swiss National Bank within hours. Investors contend that the reassurances concealed, rather than explained, the deterioration. The defendants deny the allegations.

FINMA’s response also deserves scrutiny. On March 10, 2023, it announced that its examination of Lehmann’s earlier statements about client outflows had produced insufficient grounds to open supervisory proceedings, while setting clear expectations for the bank’s future communications. That decision was limited in scope. It did not determine investors’ civil claims or clear the subsequent reassurances.

Further scrutiny did take place. In September 2023, FINMA commissioned Wenger Plattner to examine Credit Suisse’s crisis management from January 2022 to the completion of the merger. The regulator has since asserted supervisory secrecy over that review in the New York proceedings. For investors, the question is what those findings reveal about the gap between the bank’s internal condition and its public assurances, and whether the relevant evidence will become available to test their claims.

In New York, these arguments have passed important procedural stages. The Core Capital AT1 class was certified in November 2025, covering qualifying US acquisitions between October 27, 2022 and March 20, 2023, in proceedings against Credit Suisse, Körner, Lehmann and former finance chief Dixit Joshi. In March 2026, Judge Colleen McMahon also allowed Palomino and Azteca’s federal securities claims to proceed, while dismissing the New Jersey racketeering claims in that action.

The proceedings show that a claim about being misled is distinct from a challenge to FINMA’s decision to cancel the bonds.

What Hirsch’s analysis means for investors

Hirsch examines the Swiss legal grounds for holding directors and executives liable for misleading investors. His article, Director Liability for Misleading Communications, published in SZW/RSDA, identifies existing provisions on which damages claims can be built. Its significance is practical: investors need not confine their claims to the terms of the rescue when their loss arose from being misled before it.

The starting point is whose money was harmed. When managers damage a company through bad decisions, shareholders may lose because their stake in that company is worth less. The underlying injury is the company’s. A claim for that loss is not the same as an individual investor’s claim to have been deceived.

Suppose, instead, an investor buys an AT1 bond after being told that withdrawals have stabilised. Had the true position been disclosed, the investor would not have bought it. The alleged injury is to that investor’s own assets: money was committed to an investment that would otherwise have been rejected. Hirsch places deceived purchasers of shares and AT1 bonds within this direct-loss analysis.

He then distinguishes two positions. One investor says: “I would not have bought at all.” Another says: “I would still have bought, but only at a lower price.” The first connects the misinformation to the decision to invest and compares the resulting financial position with the position without that investment. The second seeks the excess price paid because the market was misinformed. The choice determines what must be proved and how compensation is calculated: the claim is for the loss caused by the misinformation.

The legal route depends partly on where the misleading information appeared.

For false financial reporting, Hirsch examines Article 754 of the Swiss Code of Obligations, which governs directors’ and managers’ liability for breaches of duty. The accounting obligations in Articles 957a and 958 of the Swiss Code of Obligations supply standards of accuracy against which the reporting can be tested. Negligence can suffice. For misleading interviews about deposit withdrawals, the analysis turns instead to the rules protecting investors against deception.

For those wider communications, Hirsch turns to Article 41 of the Swiss Code of Obligations. A purely financial loss ordinarily requires a rule protecting the injured person against the particular misconduct. Article 152 of the Swiss Criminal Code, concerning false statements about commercial enterprises, provides one such potential basis. Article 251 of the Swiss Criminal Code, on document forgery, is relevant where documents are falsified. These are not simply criminal-law labels: where their requirements, including intent, are established, they can also support a civil claim for compensation.

A prospectus presents a more specific route. Article 69 of the Swiss Financial Services Act expressly addresses losses caused to purchasers by inaccurate or misleading information in prospectuses, key information documents and similar communications. Unlike the criminal-law routes, it can apply to negligence. Hirsch identifies it as a natural starting point for subscribers to Credit Suisse’s 2022 capital raising.

The debate concerns how far this remedy reaches beyond the prospectus itself, including executives’ interviews during an offering, and which individuals bear responsibility for the information. Those questions matter to the choice of defendants and the scope of a claim. They do not alter the central point: Swiss prospectus liability already provides a statutory remedy for misleading investment information, without requiring proof of deliberate dishonesty.

Hirsch also examines Article 53 of the SIX Swiss Exchange Listing Rules, which requires disclosure of price-sensitive facts, and the disputed question of whether that duty protects individual investors for civil-liability purposes. Further avenues include deceit under Article 28 of the Swiss Code of Obligations, intentional harm contrary to good morals under Article 41(2) of the Swiss Code of Obligations, and liability based on induced trust where a special legal relationship exists. These routes have different requirements; they give claimants several legal grounds to examine, rather than leaving misleading communications outside the law.

Proving that the misinformation caused the loss remains essential. US class actions may presume reliance on an efficient market’s price. Swiss courts have not adopted that presumption as such. Hirsch explains that Swiss case law can nevertheless recognise the investment climate created by misleading information and accept proof of causation through predominant probability rather than certainty. An investor need not always have read the original statement personally; it may have reached them through an adviser or the financial press.

The gravity of the conduct should not be lost among the legal categories. Measured against the contemporaneous record set out by Hirsch, the reassurances of stability were objectively grave and unjustifiable. The bank’s leaders were addressing the very risks on which investors had to decide whether to commit or keep their money. In her 2024 ruling, addressing financial-reporting controls, Judge McMahon made clear that efforts to save the bank did not automatically excuse withholding regulators’ concerns until it was on the verge of collapse.

Hirsch’s work gives investors a concrete legal starting point for bringing new damages actions in Switzerland. The provisions differ in scope, and their application will require argument and evidence. But those are questions to litigate, not grounds for writing off the opportunity. For UBS, the prospect is additional claims over the damage that misleading communications caused before the rescue, independently of the disputes over the takeover price and the AT1 cancellation.

The investors who were persuaded not to sell

Hirsch’s analysis also points to a further avenue, beyond the purchasers examined in his paper: investors who already owned the securities and kept them because they believed the reassurances.

The distinction was already raised in the September 2024 investigation, AT1 case: Credit Suisse relationship managers lied to clients, too. Alongside an investor who bought after receiving reassuring emails, it identified those who had invested earlier and decided against selling.

Their complaint is straightforward: “Had I known the truth about the outflows, I would have sold before the collapse.” The loss alleged is not an inflated purchase price. It is the financial harm caused by being persuaded to retain an investment that accurate information would have prompted them to sell.

In the United States, this is a holder claim. Under Blue Chip Stamps v. Manor Drug Stores, private damages actions under Section 10(b) of the US Securities Exchange Act of 1934 and Rule 10b-5 generally require a purchase or sale, excluding claims based only on holding. An investor who bought during the relevant period may still have a purchase-based claim even if they later retained the bonds. State-law remedies require separate analysis, including federal restrictions on certain state-law class actions involving covered securities.

The US restriction does not decide the Swiss claim. Article 41 of the Swiss Code of Obligations offers a basis for arguing that misleading statements caused an existing investor a personal loss by inducing a decision not to sell. Article 754 of the Swiss Code of Obligations is a further avenue where the breached corporate duty protects that investor; Article 152 of the Swiss Criminal Code is relevant to the protection against false commercial statements. The reach of those duties to holders needs to be tested in court. The claim can be framed under existing law, rather than depending on the creation of a new statutory remedy.

The argument has a significant European precedent. In its 2005 EM.TV judgment, Germany’s Federal Court of Justice recognised in principle, in the context of liability under Section 826 BGB, that an investor could recover a loss caused by abandoning a firmly intended sale at a specific time because of management’s unlawful conduct. The reasoning provides persuasive comparative support for a Swiss holder claim and reinforces the importance of proving the forgone transaction.

Contemporaneous evidence would be particularly valuable: correspondence with an adviser, dated instructions or their cancellation, and records establishing when and how much the investor intended to sell, and why the sale was abandoned. The loss claimed is the financial difference made by remaining invested instead of selling at an attainable price, taking account of what truthful disclosure would itself have done to that price. Such evidence turns the claim from hindsight into a case about a concrete decision shaped by the bank’s statements.

This extension opens a further line of argument for investors, particularly those who bought before the period covered by the US claims. A properly evidenced holder claim could provide another route to compensation in Switzerland and another source of litigation exposure for UBS. Misleading someone into keeping money at risk is no less serious than misleading them into putting it there.

What Credit Suisse told its bondholders

Credit Suisse’s March 14, 2023 Fixed Income Investor Presentation supplies further written evidence. It was a public communication addressed specifically to debt investors, explaining the issuer’s financial position and the risks attached to its instruments. CREDIT SUISSE AT1s CASE: The Unspoken Things had already examined its loss hierarchy; AT1 case: Credit Suisse relationship managers lied to clients, too returned to its liquidity assurances and its relevance to investors who held on.

Slide 8 highlighted a liquidity coverage ratio of 144%, explicitly measured over the final quarter of 2022, and anticipated further liquidity from the restructuring. Slide 9 set out capital buffers and contractual write-down triggers, including specified capital-ratio thresholds and non-viability conditions. Its reference to public-sector capital support made the distinction between capital support and liquidity assistance central to the contractual analysis.

Slides 11 and 12 then presented the loss hierarchy and Swiss resolution framework, including creditor protection against being worse off than in liquidation. Contemporary financial reporting read the presentation as confirming that shareholders would bear losses first. But slide 11 also qualified the hierarchy for instruments already converted or written down under their terms before restructuring. The document must be assessed as a whole: did it clearly explain the exposure that bondholders continued to bear, alongside the deteriorating liquidity position? The distinction between a historical ratio and a current assurance, and between contractual write-down and resolution, is central to that inquiry.

A contractual claim for existing holders

For existing bondholders, the contract supplies a further legal starting point. Swiss law recognises ancillary duties of information and protection within contractual relationships. Under Article 97 of the Code of Obligations, a holder entitled to enforce the bond contract could argue that an issuer choosing to explain the risks attached to its outstanding debt owed its creditors a duty to communicate accurately, and breached that duty by inducing them to retain securities they would otherwise have sold.

The practical advantages are substantial. A contractual claim does not require a separate statutory rule protecting investors against purely financial loss, or proof of deliberate deception. Fault is presumed, subject to the debtor proving its absence; the claimant must establish the duty, breach, causation and loss. Such damages claims ordinarily fall under Article 127’s ten-year limitation period, running from when the claim becomes due under Article 130, rather than the ordinary three-year relative period in tort.

The presentation gives that argument a concrete documentary basis: it addressed debt investors directly about the financial position and loss mechanisms governing their investment. The claim would seek the loss caused by the missed sale.

Why UBS can be sued directly

UBS succeeded to Credit Suisse’s rights and obligations, not merely its business and assets. Under Article 22(1) of the Swiss Merger Act, the absorbed company’s assets and liabilities pass to the acquiring company by operation of law. Civil liabilities arising from misconduct before the merger are part of that succession. Article 722 of the Swiss Code of Obligations makes a company liable for harm caused by unlawful acts committed in the course of its business by those authorised to manage or represent it. Statements by a bank’s chairman and chief executive about its financial condition are made in those corporate roles. They are not detached personal remarks for which only the individuals can answer.

Investors can therefore sue UBS directly, as legal successor, for Credit Suisse’s civil liabilities arising from unlawful communications by its former management. They need not show that UBS itself made the statements, participated in the deception or separately agreed to assume those claims. The basis is Credit Suisse’s own responsibility for the conduct of its organs, transferred to UBS through the merger. That corporate liability coexists with the former executives’ personal liability. Contractual obligations and liabilities follow the same succession.

UBS’s third-quarter 2026 report continues to identify the New York securities cases among its legal matters. It describes allegations concerning customer outflows, financial reporting controls and risk management.

Access to the evidence remains contested. After the September move towards confidential judicial inspection of FINMA files, FINMA’s October 13 decision prohibited UBS from submitting 33 supervisory documents even for the US judge’s private review. UBS had requested permission; FINMA refused on supervisory-confidentiality grounds. Those records may help test what the bank knew when it reassured investors.

Haberbeck and Hirsch address different liabilities arising from the same history. The rescue does not make every takeover price fair, and it does not excuse the misleading communications that preceded it. Swiss law offers investors legal grounds for new damages actions. Questions of interpretation, causation and proof will shape those cases; they are not reasons to treat the conduct as beyond legal redress.

For UBS, the consequence is a further potential round of Swiss litigation over statements made by Credit Suisse’s former leaders, including claims by investors persuaded not to sell. The issuer’s own presentation also supplies evidence for a contractual claim by existing bondholders. Credit Suisse’s contractual and other civil liabilities passed to UBS through the merger. A victory over the merger price or the AT1 write-off would not settle those separate claims.