Credit Suisse to pay $ 475 million to resolve Mozambican scandal accusations


WASHINGTON / ZURICH, October 19 (Reuters) – Credit Suisse Group AG (CSGN.S) will pay US and UK authorities around $ 475 million to resolve bribery and fraud charges linked to Mozambique’s $ 2 billion corruption scandal dollars, while its affiliate pleaded guilty to a conspiracy charge in New York, US and UK agencies said Tuesday.

The settlement with the Securities and Exchange Commission (SEC), the Department of Justice and the UK Financial Conduct Authority (FCA) is the latest blow to the scandal-ridden Swiss bank and was announced minutes before the financial regulator Swiss did not reprimand her for a long time. lead the corporate espionage saga.

The US and UK charges stem from nearly $ 1 billion of bond offerings and a syndicated loan that Credit Suisse helped organize between 2013 and 2016 to fund a tuna fishing industry project in the Mozambique. Much of the proceeds was diverted via bribes to Credit Suisse bankers and Mozambican officials.

The three former Credit Suisse bankers, along with two intermediaries and three Mozambican government officials, were indicted in 2018 for money laundering and fraud against U.S. investors who had invested in the loans. U.S. prosecutors said at least $ 200 million in loans had been diverted to the eight defendants. Former bankers pleaded guilty in 2019.

Through the actions of its bankers, Credit Suisse fraudulently deceived investors and violated U.S. corruption laws, authorities said Tuesday.

The bank will pay a criminal fine of $ 175 million to the Department of Justice, $ 99 million to the SEC and $ 200 million to the UK authorities, and will also write off Mozambique’s $ 200 million in debt. As a result, the bank said it plans to take on $ 230 million in charges in the third quarter of 2021.

Credit Suisse’s European subsidiary also pleaded guilty in a U.S. federal court to one count of conspiracy to commit wire fraud, while the group reached a three-year deferred prosecution agreement with the Department of Justice.

This will require the bank to continue to cooperate with any ongoing investigation and to improve its compliance systems.

Credit Suisse’s European subsidiary has also agreed with the Swiss regulator to appoint an independent third party to oversee its transactions and risk controls.

“Credit Suisse is pleased with the completion of proceedings initiated by US, UK and Swiss regulators regarding the bank’s arrangement for the financing of loans to Mozambican state-owned enterprises,” the bank said in a statement. .


The Swiss bank is already reeling from a series of scandals, including heavy losses due to the collapse of the American family office Archegos, customer losses resulting from the collapse of the supply chain finance company Greensill and allegations that she snooped on her former top wealth management executive Iqbal. Khan.

President Antonio Horta-Osorio, who joined the bank in April from Britain’s Lloyds, said the scandals were the most serious he had ever seen.

The Federal Financial Market Supervisory Authority, FINMA, said on Tuesday the bank had “serious organizational flaws” surrounding commercial espionage which ultimately triggered the departure of chief executive Tidjane Thiam.

FINMA said it reprimanded two people and opened enforcement proceedings against three additional people, without naming them.

Referring to the spy case, Credit Suisse said it had “taken decisive steps to strengthen its governance and relevant processes.”

Tuesday’s resolution is the latest development in the multi-year Mozambique saga for Credit Suisse, with a private litigation ongoing. The African nation is suing Credit Suisse and shipbuilder Privinvest in the High Court in London for the missing money. Read more

The corruption scandal prompted donors, including the International Monetary Fund, to cut support for Mozambique, triggering a currency collapse and default.

He also involved other major lenders.

A London-based affiliate of Russian bank VTB, which worked with Credit Suisse to arrange one of the bonds in 2016, also agreed on Tuesday to pay $ 6 million to settle the SEC charges that led investors into fault.

“VTB takes today’s settlement seriously and has fully cooperated with the SEC investigation,” the bank said.

Reporting by Chris Prentice in Washington, Kanishka Singh in Bengaluru and John Revill in Zurich; additional reporting by Michael Shields and Rachel Armstrong; written by Michelle Price; Editing by Jonathan Oatis, Will Dunham and Richard Pullin

Our Standards: The Thomson Reuters Trust Principles.

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