The bank has decided to cease paying lawyer's fees for its staff ensnared in the U.S. crackdown on hidden offshore accounts. The move is an attempt by Credit Suisse to reduce its risks.
Credit Suisse is tired of paying: the bank has stopped paying legal fees for two employees which in 2011 were hit with U.S. charges of aiding tax evasion, according to «Neue Zürcher Zeitung» (in German, behind paywall).
The bank is even reportedly in court with a third employee who has been paying his own legal fees in a similar case since 2014. Credit Suisse told «NZZ» that the amount and proportionality of didn't warrant continuing to pay. An source however told the paper that two of the bankers charged had planned to plead «not guilty», which in turn would mean millions in legal defense fees which Credit Suisse didn't want to pay.
The bank said it hasn't been paying all of the costs stemming from its dealings with U.S. clients anyway, a bank spokesman told finews.com. «Specifically, this pertains to two individuals who have been in court since 2011, with legal fees of over $1 million, with unclear prospects in court.»
Pushed into Plea?
«NZZ»'s account is slightly different: Credit Suisse has had enough of paying legal fees for bankers who won't simply sign a confession, as so far four of eight bankers accused have. Their guilty pleas have saved the bank time, legal and court fees, and worry.
In 2014, Credit Suisse paid $2.8 billion and pled guilty to U.S. charges of helping Americans cheat on their taxes. Though the plea was highly unusual, it can be preferable to firms in order to the riskier airing of dirty laundry in court.
Employee Consequences
What is good for the bank can be detrimental to individuals involved, Denise Chervet, who is head of a Swiss bank employee group, told «NZZ»: employees have no idea what the penalty will be if they are found guilty in court. Employees also have an obligation to provide for the welfare of employees under labor law. And lastly, a guilty plea would obviously complicate an employee's efforts to find a new job.
Chervet recently moved to protect the rights of employees whose names were on confidential bank files which are slated for handover to U.S. officials are part of the 2014 deal. The group objected to files being handed over without employee names being redacted. Switzerland's data privacy office supports this view.
