Investors representing more than 4.5 billion Swiss francs ($5 billion) of Credit Suisse bonds have sued the Swiss financial regulator over its decision to wipe out their investments during last month’s emergency government-orchestrated takeover.

Law firm Quinn Emanuel Urquhart & Sullivan, which is representing the bondholders, said Friday the move was the first in a series of steps to seek redress for clients it said had been unlawfully deprived of their property rights during the takeover of Credit Suisse (CS) by bigger rival UBS (UBS).

It is the first major lawsuit in the public domain to be filed over Switzerland’s decision to wipe out around $18 billion of Credit Suisse’s “additional tier one” (AT1) debt during the 3 billion Swiss franc ($3.4 billion) all-share rescue deal last month, which stunned markets and alerted litigators.

The appeal against FINMA, the Swiss Financial Market Supervisory Authority, which ordered the writedown, was filed on April 18 in the Federal Administrative Court in St Gallen, north-east Switzerland.

“FINMA’s decision undermines international confidence in the legal certainty and reliability of the Swiss financial center,” said Thomas Werlen, Quinn Emanuel’s Swiss managing partner.

“We are committed to rectifying this decision, which is not only in the interests of our clients but will also strengthen Switzerland’s position as a key jurisdiction in the global financial system.”

FINMA declined to comment and Credit Suisse did not immediately respond to a Reuters request for comment.

Bondholders lose out

FINMA said last month that its decision to impose steep losses on some bondholders was legally watertight because the bond prospectuses and emergency government legislation allowed for a total writedown in a “viability event.”

Engineered in the wake of the global financial crisis, AT1 bonds were designed to ensure investors, not taxpayers, carry the burden of risk if a bank runs into trouble.

Bondholders have been seeking legal advice since the rescue upended a long-established practice of prioritizing bondholders over shareholders in a debt recovery, and a number of claims have already been filed in Switzerland over the terms of the deal.

The Federal Administrative Court said it was still receiving complaints but declined to name claimants or comment on how many had been lodged by bondholders or their lawyers.

Some investors have been trading the notes at penny prices in a so-called litigation play, betting that successful legal claims will boost values in the future, lawyers have said.