credit suisse: Credit Suisse pays $495 million to settle legacy case

Credit Suisse has agreed to pay $495 million to settle a case brought against it in the US, the latest payout related to previous mistakes that have tarnished the Swiss bank’s reputation.

Credit Suisse said it will make the payout to settle claims by the New Jersey Attorney General related to the bank’s pre-2008 Residential Mortgage Backed Security (RMBS) business.

The attorney general’s office alleged that Credit Suisse “deceived investors and engaged in fraud or deception in connection with the offering and sale of RMBS.”

The attorney general’s office had sought more than $3 billion in damages in a case filed in 2013.

“Credit Suisse is pleased to have reached an agreement that allows the bank to resolve the only remaining RMBS matter involving claims from a regulator and the largest of its remaining exposures to its legacy RMBS dossier,” the bank said in a statement.

“The settlement, for which Credit Suisse is fully prepared, marks another important step in the bank’s efforts to proactively resolve litigation and legacy issues.”

Credit Suisse chairman Axel Lehmann pledged last week to reform the bank after a “terrible” 2021 in which it lost billions of dollars.

Switzerland’s second-largest bank is trying to recover from a series of scandals, including losing more than $5 billion to the collapse of investment firm Archegos last year, when it also stole client funds linked to defunct financier Greensill Capital had to block.

The bank, one of Europe’s largest and one of Switzerland’s global systemically important banks, has had to raise capital, halt share buybacks and cut its dividend, but its recovery efforts have been hampered by a series of legal scandals.

In June the bank was found guilty of failing to prevent money laundering by a Bulgarian cocaine trafficking gang.

A Bermuda court ruled in March that former Georgian Prime Minister Bidzina Ivanishvili and his family should be awarded more than half a billion dollars in damages from the local life insurance arm of Credit Suisse.

Last October, Credit Suisse pleaded guilty to defrauding investors over an $850 million loan to Mozambique intended to fund a tuna fishing fleet, paying US and UK regulators $475 million to get the to settle the case.

The US Department of Justice is also investigating whether Credit Suisse continues to help US clients hide assets from authorities eight years after the Swiss bank paid for a $2.6 billion tax evasion settlement.

Credit Suisse, whose share price has more than halved over the past 12 months, is expected to release details of a much-anticipated strategic review on October 27 alongside its third-quarter results.

https://economictimes.indiatimes.com/news/international/business/credit-suisse-pays-495-million-to-settle-legacy-case/articleshow/94912799.cms credit suisse: Credit Suisse pays $495 million to settle legacy case

Russell Falcon

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