Credit Suisse can’t get out of the negative headlines. The number 2 of the Swiss big banks staggers from scandal to billions in loss to money laundering allegations in court.
Another court case is now in the spotlight in Geneva. It is about money laundering, fraud and a former Prime Minister of Georgia. A secret report by the financial market regulator Finma may be included in the proceedings, as recently decided by the Geneva Appeals Chamber. This report is available from the “SonntagsZeitung”. It shows ludicrous flaws in the CS control system.
The background is a fraud case in which the former Prime Minister of Georgia and CS customer Bidsina Ivanishvili (65) is one of the victims. His customer advisor at the time was sentenced to five years in prison in 2018 and later took his own life.
Autumn 2015 blew up and called Finma into action. Thanks to the customer advisor, the bank had made a lot of money. But it later turned out that he was a fraudster, engaged in fictitious stock exchange transactions, shuffled money between his customers, enriched himself and caused direct damage of around 130 million francs.
Warnings are ignored
The frightening thing about the report: CS has a working system that should prevent such fraud. However, Finma also writes that the customer advisor “was among the bank’s three toppers”. At the same time, however, there were also warnings: “Between 2008 and 2014 he received four disciplinary proceedings and attracted attention with many other misdemeanors, which, however, were not punished,” quotes the “Sonntagszeitung” from the report.
Anyone who earned enough money for the bank, who was obviously not looked at too closely. Because the report goes on to say: “The bank has been aware of unauthorized processing of customer transactions since 2011. It took a very long time before anything was done, and there were even efforts to whitewash these violations.”
This could also have something to do with the British bonus system. “Very high variable remuneration can be achieved with the current incentive system,” says the Finma report. “Although the bank’s remuneration system does not provide any incentives for non-compliance with legal and regulatory requirements, violations were not taken into account when determining the variable remuneration.” The main thing is that the result is correct, one would have to conclude from these passages!
Victims want money back
The problem of CS: Ivanishvili sued the bank in 2016. Because the former Georgian prime minister has lost a lot of money.
According to the Finma report, Ivanishvili made a loss of CHF 576 million at CS. At the same time, the leading stock index SMI rose by 35 percent and the Dow Jones by 56 percent. Ivanishvili now wants this money back, and other CS customers are fighting with him for around one billion francs.
The case also deals with money laundering. CS rejects this accusation to the “SonntagsZeitung”: “We note that the former customer advisor was not convicted of money laundering in the criminal proceedings that have now been finally concluded.”
The bank later added the following statement to the reporting: “Credit Suisse was recognized by all judicial authorities as an aggrieved party in this matter. All investigations by the bank, Finma and the criminal authorities into this matter since 2015 have shown that the former customer advisor was not supported in his criminal activities by other employees. » It also goes on to say that the customer advisor had been paid directly by the plaintiff for years without the knowledge of the bank.