Credit Suisse ignored more than 100 red flags, says regulator
On Sunday, the NZZ am Sonntag paper reported that the management of Credit Suisse had overlooked breaches of regulations for years and that bank leads the pack when it comes to the most ongoing FINMA investigations.
In recent years, FINMA has initiated five proceedings
against the bank to remedy these omissions. The most recent cases concern the
billions lost via the Greensill and Archegos funds. There have also been
investigations into money laundering and executive espionage. A report shows
that Credit Suisse ignored more than 100 red flags in total.
The SonntagsBlick paper highlighted one such red flag around
the time when Urs Rohner was head of the board of directors. It concerns a
client advisor who managed the funds of wealthy Eastern Europeans that earned
the bank some CHF25 million francs a year. According to the SonntagsBlick, he
was alleged to have invested his clients' assets in high-risk investments
without their knowledge, falsified documents and lined his own pockets in the
process. Despite warnings, he allegedly continued to work for the bank and was
only fired in 2015 after making massive speculations.
The SonntagsZeitung paper wrote that the bank's heavy losses
also have political consequences. The Credit Suisse issue is on the agenda of
the House of Representatives’ economic committee next week. The main topic for
discussion will be whether and how the regulation of the big banks should be
strengthened. The greatest need for action is in the area of risk management,
where there are clear gaps. A member of FINMA will also be present to answer
questions.
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