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UBS has settled a lawsuit brought by Credit Suisse against a popular Zurich finance blog over what the failed lender claimed were unvetted and abusive reader comments under stories.
The settlement is the latest move by UBS to clear up legacy legal disputes since its rescue of Credit Suisse five months ago. The group will publish its second-quarter results on Thursday, where chief executive Sergio Ermotti will set out his vision for the combined business.
As part of the agreement with Inside Paradeplatz, the blog, which mixes scurrilous gossip and contentious commentary with insider tip-offs, has deleted numerous reader comments and adjusted three posts, while agreeing to monitor comments in advance of publication.
Credit Suisse brought the case against Inside Paradeplatz, a website widely read among the Swiss finance industry, and its publisher Lukas Hässig in December. UBS dropped all its claims as part of the deal, according to a person with knowledge of the matter.
In a statement, Inside Paradeplatz said it “commits to carefully review reader comments in advance and not to allow any infringements of personality rights regarding the plaintiffs”, adding that it “expresses its regret for any harm caused by the publication of reader comments”.
In a move that surprised Swiss financiers, lawyers acting on behalf of Credit Suisse submitted the 256-page claim against Inside Paradeplatz and Hässig in the Commercial Court of Zurich in December.
The suit called for the removal of parts of 52 articles on the blog related to Credit Suisse, as well as the comments from readers that appeared under the articles.
Credit Suisse set the costs for the case at SFr300,000 ($339,000) and pursued the blog for all the profit it generated since July 27 last year, plus 5 per cent interest.
At the time, Hässig told the Financial Times that while he had been sued before, this was the biggest lawsuit he had faced and it had the potential to put him out of business.
The blog is essential daily reading for Switzerland’s close-knit financial community although many bankers in Zurich have long complained about the coverage they receive.
Last June the blog caused a storm when it ran a story saying Boston-based State Street was said to be planning a SFr23bn takeover bid for Credit Suisse, based on a single source.
While both banks later denied the story, following the initial report and press coverage of it, Credit Suisse shares rose 12 per cent and State Street stock fell 5 per cent.
Inside Paradeplatz has frequently been hit by legal challenges. Credit Suisse attempted to sue the blog in 2015 over three articles it ran comparing the bank with Fifa, world football’s governing body that was at the time at the centre of a global corruption scandal.
In 2019, UBS also took legal action against Inside Paradeplatz over descriptions of its then legal chief, Markus Diethelm, who had switched to Credit Suisse by the time it sued the blog last year.
Earlier this month, UBS agreed to pay $1.4bn to resolve a US regulatory probe into the alleged mis-selling of residential mortgage bonds in the run-up to the 2008 financial crisis, wrapping up the last remaining case brought by the US government against Wall Street groups over the issue.
The bank also made clear it had no intention of using a SFr9bn backstop from the Swiss government that was designed to shield the bank from losses following its acquisition of Credit Suisse, in a move that may ease public anger over the deal.
UBS has also terminated a SFr100bn liquidity lifeline offered by the Swiss National Bank at the height of the turmoil that swept the banking sector in the spring and culminated in the Credit Suisse takeover.
Last month, Credit Suisse was fined $388mn by US and British regulators for “significant failures in risk management and governance” related to the collapse of Archegos Capital, which caused a $5.5bn trading loss and helped bring about the demise of the Swiss lender.
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