UK High Court finds Credit Suisse in partial breach of COBS rules regarding structured product sales
The UK Commercial Court (Royal Courts of Justice) has ruled in favour of the claimants in their action for damages against Credit Suisse in relation to a US$31m investment mis-selling claim (Abdullah and others v Credit Suisse (UK) Limited and Credit Suisse Securities (Europe) Limited), brought by a Kuwaiti family whose leveraged structured note portfolio was closed out in late October 2008.
The claimants are a wealthy Kuwaiti family, who entered into various structured capital-at-risk products with Credit Suisse at the recommendation of the bank's relationship manager. According to the court ruling, in May 2008, they purchased their 18th such product from Credit Suisse, namely a US$20m equity-linked note. In October 2008, following the global economic crisis, in-built barriers on some of the notes were breached, rendering their capital at risk.
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