Credit Suisse agrees on Mozambique deals with the USA, Switzerland and Great Britain
The comparisons clarify investigations into the bank’s loan financing arrangement for state-owned companies in Mozambique and related securities transactions between 2013 and 2016.
This week, Credit Suisse agreed to pay $ 475 million and overlook the $ 200 million Mozambique owes investors in a series of settlements with U.S., Swiss, and U.K. regulators over loans the Swiss bank owes awarded to the African nation.
The saga adds to other blows the bank suffered from the Archegos and Greensill affairs. These losses were followed by a series of senior management changes. Due to the release of the financial results for the third quarter on November 4, Credit Suisse expects a charge of 230 million US dollars in the third quarter of 2021.
The comparisons clarify investigations into the bank’s loan financing arrangement for state-owned companies in Mozambique and related securities transactions between 2013 and 2016, a statement said earlier this week.
The bank, which is listed in Zurich, announced that it had also taken note of the notification from the Swiss national supervisory authority FINMA (October 19) on the conclusion of its enforcement proceedings in connection with previous monitoring activities.
“The bank condemns all unjustified observations and has already taken decisive steps to strengthen its relevant governance and processes,” it said.
With regard to loan financing for Mozambique, Credit Suisse Group has entered into a three-year deferral agreement with the US Department of Justice and has approved an injunction from the US Securities and Exchange Commission.
Under the terms of the DPA, Credit Suisse will continue its efforts to improve compliance and remedial action, report to the DoJ on these efforts for three years, and take additional action as resolved. In addition, Credit Suisse Securities (Europe) Ltd has pleaded guilty to one point of conspiracy to violate the US federal remittance fraud act. CSSEL is subject to the same obligation as Credit Suisse under the DPA. The total monetary aspect of the DOJ and SEC settlements, taking into account various credits for overlapping penalties, is approximately $ 275 million.
In the resolution with the UK Financial Conduct Authority, the Bank agreed that its UK operations in relation to these transactions with Mozambique between 2013 and 2016 “failed to conduct business with due skill, care and diligence to use reasonable care in the organization ”. and control its affairs responsibly and effectively with appropriate risk management systems. ”
The bank said it would pay a fine of about $ 200 million; It also agreed with the FCA to cancel Mozambique’s $ 200 million debt.
In its ruling, the Swiss Financial Market Supervisory Authority (FINMA) determined that Credit Suisse had violated its obligation to submit a suspicious transaction report (SAR) because the submission was considered too late in 2019. It also determined that Credit Suisse was not paying enough attention to the risks from certain government lending transactions and has instructed the bank to remedy any deficiencies identified by June 30, 2022, all measures taken on the basis of the current judgment.
“In addition to the well-known observation of two former members of the executive board, a small group of former executives planned and carried out five further observations of former employees or third parties within the bank between 2016 and 2019, all outside of Switzerland, through additional observations carried out to protect the physical safety of the employees. The supervisory authority criticized the decision-making, documentation and monitoring of the observations by the bank as well as the lack of internal regulations. The lack of documentation was partly due to the fact that communication took place via external channels that were not authorized by the bank, ”says Credit Suisse.
“As already mentioned, Credit Suisse condemns all unjustified observations and has taken a number of measures, whereby observations are prohibited unless there are compelling reasons such as a threat to the physical safety of the employees. The bank has already improved its security governance and processes, and has taken steps to enforce the correct use of electronic communications. In principle, FINMA considers these measures to be suitable for remedying the deficiencies identified and has supplemented them with limited additional requirements, ”the communication states.
“The bank also regrets that it did not initially ensure that all relevant information was readily available and thus made fully available to the regulator,” she concluded.