Compliance Corner: FINMA, Credit Suisse

Editorial Staff 9 February 2021

Compliance Corner: FINMA, Credit Suisse

The latest compliance news: regulatory developments, punishments, guidance, permissions and new product and service offerings.

Credit Suisse
A report in the Wall Street Journal has said that Credit Suisse overlooked warnings for years while a private banker stole from billionaire clients. The banker, Patrice Lescaudron, was sentenced to five years in prison in 2018 for fraud and forgery. He admitted cutting and pasting client signatures to divert money and make stock bets without their knowledge, causing more than $150 million in losses, according to the Geneva criminal court.

Swiss regulator FINMA had censured Credit Suisse in 2018 for inadequately supervising and disciplining Lescaudron as a top earner, and said that he had repeatedly broken internal rules, but it revealed little else about the bank’s actions in the matter. Credit Suisse said it discovered Lescaudron’s fraud in September 2015 when a stock he had bought for clients crashed.

However, the report, commissioned by FINMA in 2016 and reviewed by The WSJ, found that Lescaudron’s activities triggered hundreds of alerts in the bank that weren’t fully probed in the 2009-15 period studied. In addition, around a dozen executives or managers in Credit Suisse’s private bank knew Lescaudron was repeatedly breaking rules but turned a blind eye, proposed lenient punishment for his misconduct or otherwise glossed over the issues because he brought in around $25 million in revenue a year, the report found.

“This specific document corresponds to the early stages of a closed legacy case review. Such review did not reveal any facts that would support the criminal complaints against Credit Suisse," a spokesperson told WealthBriefing about the matter.

FINMA hasn't imposed any fine on Credit Suisse, neither has it ordered any disgorgement of profits nor any limitation of business activities, as was made clear in 2018.

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