SWITZERLAND: Credit Suisse Showered in Legal Woes.

As published on finews.asia, Thursday 29th April, 2021.

The Swiss bank is grappling with the fallout from twin risk disasters. Meanwhile, its legal troubles are also piling up elsewhere.

Zurich-based Credit Suisse still faces a vestige from its $2.5 billion settlement with U.S. prosecutors in 2014 over helping American tax dodgers and cheats, according to the «Financial Times» (behind paywall). The U.S. Senate's finance committee overseer, Ron Wyden, wants the Swiss bank to answer more questions about a prominent case that has emerged since then.

The offshore account of Dan Horsky, a wealthy economics professor in the U.S., is haunting the Swiss bank, seven years after the U.S. settlement was struck. Ex-CEO Brady Dougan and several other executives including legal chief Romeo Cerrutti had in 2014 depicted helping Americans hide money offshore as the action of some «rogue» bankers. The emergence of Horsky, who was rumbled by U.S. tax investigators after the Swiss bank's settlement, undermines this stance.

Senator Wyden's questions are directed at Credit Suisse CEO Thomas Gottstein as well as U.S. attorney general Merrick Garland, who oversees the prosecutors who struck the 2015 settlement. Wyden wants to know why Credit Suisse didn't report Horsky's accounts while negotiating with the Department of Justice.

«Is this attributable to a lapse in internal controls in which Credit Suisse failed to identify Mr. Horsky as the beneficial owner of these accounts, or a willful decision not to report the existence of these accounts?,» according to the letter.

Wyden's inquiry is hugely unwelcome in Zurich right now: Credit Suisse is dealing with regulators from the U.K., U.S., and Switzerland over Archegos, which blew a 4.4 billion Swiss franc ($4.7 billion) hole in its first quarter. The Swiss bank also faces legal action from disgruntled investors in a line of supply chain funds managed by insolvent Greensill.

This week, a U.S. appeals court also kept alive a lawsuit against Credit Suisse involving an exchange-traded note on volatility that crashed amid a wider plunge in global financial markets in 2018, according to «Reuters». This paves the way for investors wiped out in the notes bring a case that the bank wanted to crash the market in the notes.

The snafus pile pressure on Credit Suisse, which had already been struggling to rid itself of legal action brought by Bidzina Ivanishvili: the ex-Georgian leader is now in his sixth year of bitter wrangling over investments advised by former private banker Patrice Lescaudron.

A group led by Ivanishvili recently hired former Swiss diplomat Thomas Borer, now a lobbyist, to represent them. A legal evaluation prepared in 2017 for Swiss regulator Finma casts doubts on Credit Suisse's claims that Lescaudron, who died by suicide last year, acted in isolation.

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