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Fort Lauderdale Federal Crime Attorney > Blog > Corruption > Swiss watchdog raps Credit Suisse for anti-corruption failings

Swiss watchdog raps Credit Suisse for anti-corruption failings

ZURICH (Reuters) – Credit Suisse (CSGN.S) failed to adequately combat money laundering in suspected corruption cases linked to soccer’s ruling body FIFA and Venezuelan and Brazilian state oil companies, Switzerland’s financial watchdog FINMA said on Monday, dealing a blow to the bank’s reputation.

Watchdog 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 it might have illegally reaped. FINMA has no authority to fine banks it supervises.

Switzerland’s second-biggest bank behind UBS (UBSG.S) also fell short of its obligations to fight corruption while managing “a significant business relationship” with a politically exposed person, the authority said on Monday.

Credit Suisse said in a statement the Swiss watchdog had uncovered “legacy weaknesses”, adding it has acted to bolster compliance since Chief Executive Tidjane Thiam took over from his predecessor, Brady Dougan, in March 2015.

Instead of disciplining a 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 in February.

“The identified shortcomings occurred repeatedly over a number of years, mainly before 2014,” FINMA said, adding that many of the problems emerged from group subsidiary Clariden Leu AG, which was fully merged into Credit Suisse in 2012.

“FINMA identified deficiencies in the anti-money laundering process, as well as shortcomings in the bank’s control mechanisms and risk management,” the authority added.

The independent auditor will monitor Credit Suisse to ensure it follows through on improvements.

The enforcement action against Credit Suisse emerged from FINMA’s investigation into several Swiss financial institutions starting in 2015 in relation to suspected corruption involving FIFA, Brazil’s Petrobras (PETR4.SA) and the Venezuelan state oil company PDVSA. [PDVSA.UL]

The shares fell 0.1 percent at 0840 GMT, in line with the benchmark Swiss Market Index .SSMI.

By: John Miller

September 17, 2018

https://www.reuters.com/article/us-credit-suisse-money-laundering/finma-finds-shortcomings-in-credit-suisses-anti-money-laundering-processes-idUSKCN1LX0D9

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