UBS Wins Legal Battles Over Credit Suisse Back-Pay Claims

UBS Group AG successfully defended itself against back-pay claims brought by former Credit Suisse managing directors Martin Ego and Jeffrey Jennings. The executives argued that their contingent capital award certificates, used as deferred compensation, should not have been written down during the 2023 government-brokered merger because Credit Suisse still met minimum capital requirements.

An arbitrator rejected these claims, ruling that capital adequacy encompasses a bank's ability to manage risks and absorb losses under stress. UBS has since asked a New York state court to confirm these arbitration decisions. In a related development, Switzerland's top court recently ruled that former Credit Suisse bankers who lost bonuses during the rescue will not receive those funds back.

Despite these victories, UBS is currently seeking to overturn a separate arbitration award of nearly $1 million granted to former executive Matt Mitchell. The disputes center on the write-down of certificates and AT1 instruments decreed by the Swiss Financial Market Supervisory Authority as part of the bailout package.