Credit Suisse bank scandals in recent years

The actions of Credit Suisseimmersed in a deep restructuring, continued to collapse on Wednesday after a series of scandals in the last years of the financial entityconsidered the “weak link” of the Swiss banking sector.

Greensill bankruptcy

The bank saw its asset management arm reel from the 2021 bankruptcy of British financial firm Greensill, to which it had committed some $10,000 through four funds.

When an insurer refused to renew the contracts of Greensill — a British company that used complex financial arrangements to lend money to companies to pay their bills — the bank, no longer able to calculate the value of the funds, began liquidate them.

Greensill eventually went bankrupt, sending the companies that relied on it for liquidity reeling, a failure that also affected its creditors, including the Japanese giant SoftBank.

Archegos Fund

Four weeks later, the US fund Archegos could no longer inject money to cover its investments in derivatives, triggering a sell-off on Wall Street.

Several large banks were affected, Credit Suisse the most, with about $5 billion.

Loans to Mozambique

In October 2021, the bank was embroiled in a corruption case in Mozambique related to loans to state-owned companies.

US and UK authorities imposed US$475 million in sanctions on the bank.

The loans, granted between 2013 and 2016, should have financed maritime surveillance, fishing and shipyard projects, but were partly diverted for bribes.

Violation of quarantine rules

In December 2021, the Swiss tabloid Blick revealed that the bank’s president, Antonio Horta-Osorio, had broken quarantine regulations related to the covid-19 pandemic.

Other revelations in the press followed, such as the breach of health restrictions to attend a tennis match at Wimbledon.

The veteran banker resigned less than nine months after taking office.

Swiss secrets

In February 2022, the Organized Crime and Corruption Reporting Project (OCCRP), a consortium of 47 media outlets, including Le Monde and the New York Times, published an investigation titled Swiss secrets.

The investigation, based on account information from the 1940s to the late 2010s, reveals that the bank housed funds from clients involved in criminal and corruption cases.

Trial in Bermuda

In March 2022, a Bermuda court confirmed that former Georgian Prime Minister Bidzina Ivanishvili had suffered losses on investments managed by Patrice Lescaudron, a former Credit Suisse banker fired in 2015, convicted of fraud in Geneva in 2018 and who committed suicide two years ago. after.

Cocaine laundering in Bulgaria

In June 2022, the bank was convicted in Switzerland in a money laundering case linked to a Bulgarian cocaine ring. He was fined 2 million Swiss francs.

Two agreements for old litigation

In October 2022, the bank settled US litigation dating back to the 2008 financial crisis over mortgage-backed securities, settling in exchange for a payment of $495 million.

In France, he agreed to pay 238 million euros to avoid prosecution for illegal prospecting of clients and aggravated tax fraud between 2005 and 2012.

Greensill, the sequel

At the end of February 2023, two years after the Greensill bankruptcy scandal, the Swiss Financial Markets Authority (Finma) accused Credit Suisse of having “seriously breached its prudential obligations” in terms of risk management.

Postponement of the annual report

Last week, the bank postponed the publication of its annual report after a call from the US financial markets regulator (SEC), which raised questions about its accounts for the 2019 and 2020 financial years.

On Tuesday, Credit Suisse acknowledged “material weaknesses” on its internal controls in its annual report, sending the stock down.

On Wednesday, the collapse of the price accelerated after its main shareholder declared that it will not support the entity by increasing its participation.

Source: AFP