Credit Suisse whistleblower claims of deals with drug dealers and dictators adds to list of missteps that has made it Europe’s most scandal-ridden bank
Credit Suisse once again finds itself at the epicenter of another scandal after confidential information from more than 18,000 of its accounts were leaked, the largest ever for a major Swiss bank.
Led by Germany’s Süddeutsche Zeitung, the Organized Crime and Corruption Reporting Project (OCCRP) unveiled on Sunday the Suisse Secrets report: a litany of unethical though not necessarily strictly illegal business dealings with international drug lords and corrupt regime officials that hid money stolen from their country.
While Credit Suiss was the target of the leak, the anonymous whistleblower that fed the German paper with data over a year long argued their motivation was broader: the country’s secrecy rules themselves were immoral. And the main victims were the poor living in countries that lack the infrastructure to tackle financial crime.
Put in place to protect financial privacy, these rules were really “a fig leaf meant to conceal the shameful roles of Swiss banks as collaborators in tax evasion,” the individual wrote. “I would like to emphasize that responsibility for this situation does not rest with the banks but rather the Swiss legal system.”
Anti-corruption advocacy group Transparency International said the leaked documents confirmed Credit Suisse had offered banking services for years to high-risk clients despite significant red flags even after it pledged to crack down on shady money.
“The Suisse Secrets investigations prove once again that banks cannot be trusted to police themselves,” said Maíra Martini, anti-money laundering expert for the NGO, in a statement.
Swiss regulator FINMA declined to comment on specifics, but confirmed it had been in contact with the bank in regards to the data leak, and said the fight against money laundering was a core pillar of its oversight duties.
Credit Suisse rejected the insinuations into its purported business practices before wrapping itself in the protective mantle of the Swiss flag.
“These media allegations appear to be a concerted effort to discredit not only the bank, but the Swiss financial marketplace as a whole,” it said in a statement.
The bank, which overhauled its risk and compliance leadership team after last year’s scandals, argued the accounts were “predominantly historical” in nature with over 60% closed before 2015.
“The accounts of these matters are based on partial, inaccurate, or selective information taken out of context, resulting in tendentious interpretations of the bank’s business conduct,” it added.
Suisse Secrets is just the latest in a long list of scandals. Only last month it sacked its board chairman less than a year in after Antonio Horta-Osorio was caught reportedly breaching COVID quarantine rules using the bank's private jet to attend Wimbledon tennis matches.
Archegos
Numerous banks suffered losses after last year's implosion of Bill Hwang’s opaque hedge fund Archegos, who had borrowed heavily from prime brokers to increase his return in companies like CBS Viacom. Credit Suisse however shouldered the majority of costs at $5.5 billion, prompting a report to discover a widespread cultural problem towards risk management at the bank.
Greensill
Credit Suisse sold its professional clients $10 billion in shares of funds underpinned by supply chain debts originated, packaged and financed by Lex Greensill. While the Australian entrepreneur claimed to use AI to help manage risks, clients are still at risk of losing roughly a quarter of their investment after Greensill’s empire collapsed. Credit Suisse’s board buried a report into the causes of the debacle.
Spying scandal
When a rising wealth management star departed the bank for a senior job at cross-town rival UBS, Credit Suisse authorized surveillance to determine whether Iqbal Khan planned to poach customers and employees with him. While the then CEO, Tidjane Thiam, initially survived by sacrificing his head of operations, eventually he too had to depart the bank under a cloud.
FIFA
Deficiencies were identified in the bank’s adherence to anti-money laundering due diligence obligations in relation to suspected corruption involving FIFA, the world governing body for soccer, based in Switzerland. One client relationship manager, who has since been criminally convicted, breached the bank's compliance regulations repeatedly and on record over a number of years. However, instead of disciplining the client manager promptly and proportionately, the bank went on to reward his behavior.
Tuna bond affair
The bank agreed to pay up to $475 million in fines to authorities in the United States and the United Kingdom to resolve criminal charges stemming from a foreign bribery investigation over $2 billion in deals that were meant to raise money for tuna fishing in Mozambique. Instead, investigators said more than $200 million of that money was diverted to pay bribes and kickbacks to enrich foreign officials and former bankers at Credit Suisse, in a scandal that became informally known as the “tuna bond” affair.
This story was originally featured on Fortune.com
