(Reuters) -Credit Suisse AG staff are preparing to sue the Swiss financial regulator over $400 million of bonuses that were canceled after the troubled lender's rescue by UBS Group AG (SIX:UBSG), the Financial Times reported on Monday.
Quinn Emanuel and Pallas, law firms which are already suing Swiss regulator Finma on behalf of investors who owned AT1 bonds, have received multiple requests from senior managers at Credit Suisse to take legal action on their behalf, the report said.
Credit Suisse and Finma declined to comment, while Law firms Quinn Emanuel and Pallas did not immediately respond to Reuters' request for comment.
As a part of the takeover in March, the Swiss regulator decided to render around $18 billion of Credit Suisse's Additional Tier 1 (AT1) debt worthless, which stunned markets and alerted litigators.
The deal upended a long-established practice of giving bondholders priority over shareholders in a debt recovery, triggering hundreds of lawsuits.
Following this, Switzerland's Federal Council instructed Credit Suisse to cancel or reduce all outstanding bonus payments for the top three levels of management and examine whether those already paid can be recovered.
Under Swiss banking law, the Federal Council can impose bonus-related measures on a systemically important bank if it received state aid from federal funds.