Home Finance Factbox: Credit Suisse’s scandals – spies, lies and money laundering

Factbox: Credit Suisse’s scandals – spies, lies and money laundering

by Enochadmin

June 27 (Reuters) – Credit score Suisse (CSGN.S) has been discovered responsible by Switzerland’s Federal Prison Court docket of failing to forestall money-laundering within the nation’s first legal trial of considered one of its main banks. learn extra

Credit score Suisse denied wrongdoing within the case, which caps a string of scandals at Switzerland’s second-biggest financial institution.

Listed here are the principle crises to the financial institution has confronted in recent times:

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A Bermuda courtroom dominated in March that former Georgian Prime Minister Bidzina Ivanishvili and his household are due damages of greater than half a billion {dollars} from Credit score Suisse’s native life insurance coverage arm. learn extra

The courtroom stated that Ivanishvili and his household have been due the damages because of a long-running fraud dedicated by a former Credit score Suisse adviser, Pascale Lescaudron.

Lescaudron was convicted by a Swiss courtroom in 2018 of getting cast the signatures of former purchasers, together with Ivanishvili, over an eight-year interval.

Credit score Suisse expects the case, in opposition to which it’s interesting, to value it round $600 million.


Credit score Suisse denied allegations of wrongdoing after dozens of media in February revealed outcomes of coordinated, Panama Papers-style investigations right into a leak of knowledge on 1000’s of accounts held there in earlier a long time. learn extra

The allegations within the “Suisse Secrets and techniques” media articles included that the financial institution had human rights abusers and businessmen below sanctions amongst its purchasers.


Chairman Antonio Horta-Osorio resigned in January after flouting COVID-19 quarantine guidelines.

The abrupt transfer got here lower than a 12 months after Horta-Osorio was introduced in to scrub up the financial institution’s company tradition marred by its involvement with collapsed funding agency Archegos and bancrupt provide chain finance agency Greensill Capital.

Board member Axel Lehmann took over as chairman. learn extra


Credit score Suisse pleaded responsible to defrauding investors over an $850 million mortgage to Mozambique meant to pay for a tuna fishing fleet and is paying U.S. and British regulators $475 million to settle the case below a deal introduced in October.

About $200 million of the mortgage went in kickbacks to Credit score Suisse bankers and Mozambican authorities officers. The financial institution was conscious of an enormous shortfall between the funds raised and the worth of boats purchased however didn’t disclose this to traders when the mortgage was restructured in 2016, the regulators stated.

Credit score Suisse additionally organized a mortgage that was stored secret from the Worldwide Financial Fund (IMF). When Mozambique admitted to $1.4 billion in undisclosed loans the IMF pulled its assist, sending the southern African nation’s economic system right into a tailspin.


Credit score Suisse misplaced $5.5 billion when U.S. household workplace Archegos Capital Administration defaulted in March 2021.

The hedge fund’s extremely leveraged bets on sure know-how shares backfired and the worth of its portfolio with Credit score Suisse plummeted.

An unbiased report into the incident criticised the financial institution’s conduct, saying its losses have been the results of a basic failure of administration and management at its funding financial institution, and its prime brokerage division particularly. learn extra

The report stated the financial institution was centered on maximising short-term income and didn’t rein in voracious risk-taking by Archegos, regardless of quite a few warning indicators, calling into query the competence of its danger personnel.


Credit score Suisse was pressured to freeze $10 billion of provide chain finance funds in March 2021 when British financier Greensill Capital collapsed after shedding insurance coverage cowl for debt issued in opposition to its loans to corporations.

The Swiss financial institution had offered billions of {dollars} of Greensill’s debt to traders, assuring them in advertising materials that the high-yield notes have been low danger as a result of the underlying credit score publicity was absolutely insured. learn extra

Quite a lot of traders have sued the Swiss financial institution over the Greensill-linked funds. The financial institution has returned about $6.8 billion to traders thus far.


Credit score Suisse shareholders rejected a proposal from the financial institution’s board to discharge administration from different liabilities for 2020, highlighting shareholder anger of the financial institution’s pricey missteps. learn extra

The vote garnered solely 35.88% approval on the financial institution’s AGM in April, as proxy advisers pointed to danger and management deficiences main as much as the Greensill and Archegos meltdowns.

That leaves room for shareholders to carry administrators liable for wilful or grossly negligent violations of their duties below Swiss guidelines.


Credit score Suisse Chief Government Tidjane Thiam was pressured to stop in March 2020 after an investigation discovered the financial institution employed personal detectives to spy on its former head of wealth administration Iqbal Kahn after he left for arch rival UBS (UBSG.S).

Credit score Suisse repeatedly performed down the episode as an remoted incident.

Nevertheless, Switzerland’s monetary regulator stated Credit score Suisse had misled it concerning the scale of the spying. The regulator stated the financial institution deliberate seven totally different spying operations between 2016 and 2019 and carried out most of them.

In a uncommon rebuke, the regulator stated there have been critical organisational shortcomings at Credit score Suisse and that the financial institution had even tried to cowl its tracks by doctoring an bill for surveillance.

In response, Credit score Suisse stated that it condemned the spying and had taken “decisive” steps to enhance its governance and strengthen compliance.

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Reporting by Michael Shields, Scott Murdoch, David Clarke. Enhancing by Jane Merriman

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