Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Credit Suisse found guilty in cocaine cash laundering case

Stock Markets Jun 28, 2022 00:55
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: The logo of Swiss bank Credit Suisse is seen at its headquarters at the Paradeplatz square in Zurich, Switzerland October 1, 2019. REUTERS/Arnd Wiegmann

By Paul Carrel

BELLINZONA, Switzerland (Reuters) - Credit Suisse (SIX:CSGN) was convicted by Switzerland's Federal Criminal Court on Monday of failing to prevent money-laundering by a Bulgarian cocaine trafficking gang in the country's first criminal trial of one of its major banks.

A former employee was found guilty of money-laundering in the trial, which included testimony on murders and cash stuffed into suitcases and is seen as a test case for prosecutors taking a tougher line against the country's banks.

The ruling marks another headache for Switzerland's second-biggest bank, which has been reeling from billions in losses racked up via risk-management and compliance blunders.

Federal prosecutor Alice de Chambrier welcomed the verdict as "good for transparency".

Both Credit Suisse and the former employee had denied wrongdoing.

Credit Suisse said it would appeal against the conviction.

The judges looked at whether Credit Suisse and the former employee did enough to prevent the cocaine trafficking gang from laundering profits through the bank from 2004 to 2008.

The court said on Monday it found deficiencies within Credit Suisse both with regard to the management of client relations with the criminal organisation and with regard to the monitoring of the implementation anti-money laundering rules.

"These deficiencies enabled the withdrawal of the criminal organisation's assets, which was the basis for the conviction of the bank's former employee for qualified money laundering," the court said.

"The company could have prevented the infringement if it had fulfilled its organisational obligations," the presiding judge said in handing down the verdict, adding that the former employee's superiors had been "passive".

Credit Suisse said the case arose from a investigation that dated back more than 14 years.

"Credit Suisse is continuously testing its anti-money laundering framework and has been strengthening it over time, in accordance with evolving regulatory standards," the bank said.

"Generating compliant business growth in line with legal and regulatory requirements is key for Credit Suisse."

Credit Suisse was fined 2 million Swiss francs ($2.1 million). The court also ordered the confiscation of assets worth more than 12 million francs that the drug gang held in accounts at Credit Suisse, and ordered the bank to relinquish more than 19 million francs -- the amount that could not be confiscated due to internal deficiencies at Credit Suisse.

The court handed the former employee, who cannot be named under Swiss privacy laws, a suspended 20-month prison sentence and a fine for money laundering.

The presiding judge said she had failed to fulfil her role in the bank's "first line of defence".

The former banker's attorney said she would appeal against the "unfounded and unfair decision", noting she had not made any financial gain.

"This judgment places the responsibility for money laundering on people without any serious training or experience," her attorney said.

Credit Suisse shares closed up 0.4%, while the European banking sector index rose 0.3%. They are down more than 40% in the past year.

LEGAL ACTION

Corruption and money laundering experts had said the fact that Switzerland had taken legal action against a global banking player like Credit Suisse could send a powerful message in a country famous for its banking industry.

"This has the potential to be a watershed moment for Switzerland," Mark Pieth, a money laundering expert at the University of Basel, said on the eve of the trial.

"What is significant about this case is that Switzerland is taking legal action against a company and not just any company - Credit Suisse is one of the jewels in the Swiss crown."

Swiss private banks have adopted tougher anti-money laundering checks after an international regulatory crackdown to prevent money laundering.

Under Swiss law, a company can be held liable for inadequate organisation or failing to take all reasonable measures to prevent a crime from happening.

In the Credit Suisse case, prosecutors alleged the former relationship manager helped to conceal the criminal origins of money for clients through more than 146 million Swiss francs in transactions, including 43 million francs in cash, some of it stuffed into suitcases.

The relationship manager, who left Credit Suisse in 2010, was not in the courtroom on Monday.

During court hearings in February, the former relationship manager said Credit Suisse learned of murders and cocaine smuggling allegedly connected to the Bulgarian gang but continued to manage cash that became the focus of the trial.

The former banker said during the hearings she informed her managers about events, including two murders, associated with the clients, but that they decided to pursue the business nonetheless.

Credit Suisse has disputed the illegal origin of the money, saying that a former Bulgarian wrestler and his circle operated legitimate businesses in construction, leasing and hotels.

($1 = 0.9594 Swiss francs)

Credit Suisse found guilty in cocaine cash laundering case
 

Related Articles

SoftBank steps up asset sales from sinking portfolio
SoftBank steps up asset sales from sinking portfolio By Reuters - Aug 09, 2022

By Sam Nussey TOKYO (Reuters) - SoftBank Group Corp is accelerating asset sales after its flagship Vision Fund unit booked nearly $50 billion in losses in just six months, but...

Twitter Users Face Outage On Website and App
Twitter Users Face Outage On Website and App By Benzinga - Aug 09, 2022

Twitter Inc 's (NYSE: NYSE:TWTR) website is down for thousands of users, according to the real-time problem and outage monitor Downdetector.com. About 46% of website users...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Saddiq Rahman
Saddiq Rahman Jun 27, 2022 15:33
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Pablo escobar
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email