Swiss regulator raps Credit Suisse for anti-corruption failings

In a blow to the bank’s reputation, Credit Suisse has been censured by the Swiss financial watchdog for failings in anti-money laundering cases involving the world football federation FIFA and state-owned oil companies in South America.

The Swiss Financial Market Supervisory Authority (FINMA) said in a statement that Credit Suisse had infringed its “anti-money laundering supervisory obligations” between 2006 and 2014.

FINMA will appoint an independent auditor to oversee the bank’s anti-money laundering processes, but stopped short of forcing it to return any profits that the nation’s second-biggest bank might have illegally reaped. FINMA has no authority to fine banks it supervises.

The Swiss watchdog has been investigating several Swiss banks since 2015 “in relation to suspected corruption involving FIFA, Petrobras and PDVSA [Petróleos de Venezuela]”, the authority said.

The Swiss regulator also found that Credit Suisse had failed to discipline one of its top-performing client relationship managers, despite “repeated and on-record” breaches of the bank’s compliance policy.

Instead of disciplining the star private banker who breached compliance regulations for years, FINMA said Credit Suisse boosted his pay.

A banking source identified the manager as Patrice Lescaudron, jailed for five years by a Geneva court in February for abusing the trust of clients, including Bidzina Ivanishvili, a former prime minister of Georgia, the Financial Times reports.

Credit Suisse has  until the end of next year to strengthen its internal processes to combat money laundering.

The bank said in a statement the Swiss watchdog had uncovered “legacy weaknesses”, adding it has acted to bolster compliance since chief executive Tidjane Thiam (pictured) took over from his predecessor, Brady Dougan, in March 2015.

“We are grateful to FINMA for its acknowledgement of the improvements,” the bank said in a separate statement. “We have noted that as a result of this review, FINMA has not imposed any fine on Credit Suisse, not ordered any disgorgement of profits or any limitation of business activities.”

Pedro Gonçalves
Pedro Gonçalves is Financial Correspondent at International Investment.

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