Down at the federal courthouse in the Southern District, a familiar legal farce is playing out. A pack of faceless Swiss financiers from the ghost of Credit Suisse, along with their government minders, are telling a New York judge that American laws don’t apply to them. They’d like to hide the evidence of their spectacular $17 billion collapse behind a wall of Swiss secrecy, thank you very much.
It’s a classic move for the global elite: reap the rewards of U.S. capital markets, then claim immunity from U.S. rules when you get caught. But this time, they might have misread the room.
The latest chapter in this charade comes to us from a source as unconventional as the story itself: Dario Item, a diplomat-turned-investigative-journalist running a news site called Antigua.news. For months, Item has been doggedly tracking the fallout from the 2023 Credit Suisse implosion, a deal that vaporized the savings of thousands of bondholders to protect the shareholder class.
Item’s new report details the latest legal filing in a New York class-action lawsuit where investors are, quite reasonably, asking to see the bank’s internal documents. In response, Credit Suisse and the Swiss regulator, FINMA, are citing their own country’s “blocking statutes” and “supervisory privilege” to keep the files under lock and key.
It’s an argument that might fly in the clean, orderly world of Zurich, but it’s landing with a thud on the pavement of Lower Manhattan.
The reason? The judge on the case is Colleen McMahon, a senior judge in the SDNY who, it’s fair to say, doesn’t suffer fools gladly. And as Item’s reporting smartly points out, Judge McMahon has already put her feelings on this exact type of argument on the record in a past case. Her words should be carved into the wall of every foreign company that lists on the New York Stock Exchange:
“My position is very clear. If you want to raise money in the United States of America, the only laws that matter to me are the laws of the United States of America.”
You can almost hear the gavel drop.
The sheer gall of the Swiss position is what makes this story a classic. Item’s report notes that back in their home country, the regulator FINMA argued against releasing these same documents because they feared the information could fuel lawsuits in countries with “questionable” respect for the rule of law. Now, with a straight face, they are standing in a New York court—presumably one of those “questionable” jurisdictions—and asking for special treatment based on the sanctity of their own secretive laws.
It’s a sanctimonious shell game. They want access to American money but want to be shielded from American transparency. But a deadline is looming. Judge McMahon has ordered all responses to be filed by October 17th.
Come fall, the financiers from Credit Suisse are likely to get a lesson in how the rule of law works here. It’s a story about whether global capital gets to play by its own rules on our turf. And a tough New York judge is about to give them an answer.
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