Overconcentration and negligence are allegedly the cause of the Greensill problem that has left many Credit Suisse investors in a tough position. According to The Washington Post, insurers were, at one point, protecting 75% of the portfolio. When they turned theirs backs to the product, the assets lost their appeal to many investors, “some of whom are restricted from putting cash into riskier investments.”
If you lost money because you have Credit Suisse’s Greensill Capital in your account, it is important to know that you have rights. The securities lawyers at Peiffer Wolf Carr Kane & Conway will fight to recover your losses. Peiffer Wolf is currently representing investors who have suffered significant losses due to unsuitable investment advice, investors with overconcentrated investment portfolios, and investors with portfolios that don’t match their risk profiles. If you are an investor who has suffered losses due to Credit Suisse’s alleged mismanagement of Greensill, contact us today for a FREE portfolio evaluation.
In early March, UK-based Greensill filed for bankruptcy and left Credit Suisse investors with a problematic product in their portfolios. The situation, however, had been foreseeable for over two years, since, according to the Wall Street Journal, “Credit Suisse Group AG knew since 2019 that supply-chain finance funds it ran with Greensill Capital were too reliant on a small group of insurers to protect investors against default and failed to remedy the situation.”
Greensil used to define itself as “the market-leading provider of working capital finance for companies globally” and was founded by Lex Greensill. The company operated using a “German bank to fund some deals. But instead of holding the cash advances—which typically get renewed every 60 or 120 days—on its balance sheet like a traditional bank, it spun most of them into bondlike securities, or notes.” (WSJ)
Also according to The Wall Street Journal, Credit Suisse funds bought large quantities of those notes. In 2017, the Greensill fund was launched and among its main investors were insurance companies and pension funds, plus 1,000 of its “wealthy private-banking clients”.
“At one point, the insurers were protecting 75% of the portfolio.”
When the insurers disappeared, Credit Suisse froze the funds, which eventually led Greensill to file for insolvency. According to the Financial Times, “Since freezing the funds […], Credit Suisse has received back an additional $800m of cash, which means the bank is in a position to return another $1.25bn to clients on top of the $3.1bn already distributed, [Chief executive Thomas] Gottstein said.”
Now, investors want to know if they will ever get their money back.
If you lost money because you have Greensill in your account, it is important to know that you have rights. Peiffer Wolf is currently representing investors who have suffered significant losses due to unsuitable investment advice, investors with overconcentrated investment portfolios, and investors with portfolios that don’t match their risk profiles. If you are an investor who has suffered losses because of Greensill Capital, contact us for a FREE portfolio evaluation.
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