Switzerland's financial regulator sanctioned Credit Suisse for violating money-laundering rules in a series of scandals including FIFA and Venezuela's state-backed oil firm.
Bern-based Finma said on Monday it concluded two separate enforcement procedures against Credit Suisse involving cases as recent as 2016. The conclusion: Credit Suisse's methods for dealing with cases of suspected money-launderers was rickety and inept for years.
Finma said most violations happened before 2014, and an above-average number emanated from Clariden Leu, a boutique bank subsidiary which Credit Suisse fully integrated six years ago.
Brazil, Venezuela, Sports
The laundry list of violations ticked off by Finma hits homethat Credit Suisse has stumbled over some of the biggest current scandals in Swiss banking: FIFA, the world's governing soccer body; Brazilian state-controlled oil firm Petrobras; and PDVSA, Venezuela's state oil company.
«Finma has decreed measures to further improve anti-money laundering processes and to accelerate the implementation of steps already initiated by the bank,» the regulator said. Credit Suisse acknowledged the shortcomings, and said it has launched various initiatives since 2015 to address them, in a statement on Monday.
Risky Client
Finma said Credit Suisse came up short in spotting the suspected corruption in the prominent cases. A separate investigation on a politically exposed individual who is meant to command extra regulatory attention from banks, found the bank's anti-money laundering process failed, as did control mechanisms and risk management.
The PEP client affords the most illustrative view of what Credit Suisse did wrong: Finma said the bank was «too slow» in identifying him or her as potentially more risky, and failed in due diligence and documentation including investigation and plausibility checks on the client and their transactions.
Poor Management
The PEP's business was taken care of by hugely successful private banker – who has since been criminally convicted. The banker broke Credit Suisse's compliance rules repeatedly and on record for years, Finma said.
Instead of being disciplined, Credit Suisse «rewarded him with high payments and positive employee assessments,» the regulator said in rebuking the bank's supervision.
The banker isn't identified, but may be Patrice Lescaudron, who was sentenced to five years prison in February for a fraud scheme involving Russian clients. Credit Suisse wasn't party to the criminal trial, but later reversed its stance on the erstwhile private banker.
Outside Minder
The measures by Credit Suisse, including breaking up legal and compliance as well as beefing up the latter massively and rolling out a bank-wide «single client view,» have been introduced since CEO Tidjane Thiam took over three years ago.
Finma said it is appointing an outside monitor to ensure that the bank follows through, and is requiring Credit Suisse to meet the single client view measure by the end of next year.
Having an outside monitor isn't new for Credit Suisse: ex-prosecutor Neil Barofsky was appointed the Swiss bank's monitor when Credit Suisse agreed to pay $2.5 billion to settle a long-running U.S. tax evasion probe. Barofsky stayed longer than planned when his job that was renewed after Credit Suisse in 2016 paid $5.3 billion for mis-selling mortgage securities.
More to follow
