Credit Suisse's settlement in the Mozambique case does not put the affair to bed. Criminal investigators are still breathing down its neck, while it deals with several legal claims.
Credit Suisse’s $475 million settlement with the U.S. Department of Justice (DOJ), the U.S. Securities and Exchange Commission (SEC), Britain's Financial Conduct Authority, and Swiss Finma does not draw a definitive line under the Mozambique affair.
Door-Opener For More
The bank's admission of guilt to one count of violating U.S. federal wire fraud law could lead to various complications for future capital market business in the U.S. and open the door to civil lawsuits.
Credit Suisse didn’t comment on whether it is counting on receiving more lawsuits. However, if there are criminal law repercussions in relation to the Mozambique case, the bank's third-quarter report on November 4 should reflect these.
IMF Action?
It proved disastrous for Mozambique that the «tuna bonds» were not disclosed to other creditors and the International Monetary Fund (IMF). As a consequence, the IMF and other donors withdrew their support for the East African country.
This in turn led to Mozambique being unable to service its outstanding debts in 2018 and defaulting. The International Monetary Fund could file a claim against the bank as a result of this; a spokesperson for the IMF didn't immediately respond to a request for comment.
Upcoming Trials
In 2019, Mozambique's attorney general filed a lawsuit at the Commercial Court in London, naming Credit Suisse along with three of its former bankers, as well as an Abu Dhabi warship manufacturer and a contacting firm linked to it. Credit Suisse felt it had been deceived by its ex-employees and filed a counterclaim at the High Court in London in early 2020 claiming damages against Mozambique for guarantees breached by the country.
Separately, investors who bought roughly $622 million of «tuna bonds» filed a civil action case in the High Court at the end of 2020. The bond creditors include Banco Comercial Portugues and the United Bank for Africa. Mozambique is also a defendant alongside the bank in the trial, which is scheduled for September 2023.
FBI On Its Back
The issues loom under the close watch of the U.S. authorities, during which Credit Suisse must fulfill conditions set as part of the deferral of prosecution agreement.
At the same time, Switzerland's Finma has announced that it will have an independent third-party audit the improvement measures and their effectiveness at the bank. On top of it all, the FBI's criminal investigation into the corruption allegations is also still ongoing, the justice department said.
