Tag: Suisse

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Credit score Suisse studies a loss as regulators open an investigation.

Credit Suisse reports a loss as regulators open an investigation.

Credit Suisse announced Thursday that it suffered a first-quarter loss on loans to the collapsed mutual fund Archegos Capital Management. This debacle has led the Swiss financial regulator to investigate whether the bank has done poorly in monitoring the risk of its investments.

The loss of 252 million Swiss francs, about $ 275 million, from January to March was due to Archegos’ CHF 4.4 billion loss wiping out a sharp rise in sales and forcing some top executives to leave. Credit Suisse announced on Thursday that it had sold bonds to investors to support its capital.

The Zurich-based bank has suffered a number of disasters this year that have seriously damaged its reputation and finances. Swiss regulators are also investigating a spy scandal and the $ 10 billion sale by Credit Suisse that was packaged by Greensill Capital. Funding was based on funding for companies, many of which had low credit ratings or were not rated at all. Greensill collapsed in March and his ties with former UK Prime Minister David Cameron sparked a political scandal.

The Swiss supervisory authority known as Finma said it would “particularly investigate possible deficiencies in risk management” at Credit Suisse. Finma also said it “will continue to exchange information with relevant authorities in the UK and US”.

Without the loss of Archegos, Credit Suisse would have achieved a pre-tax profit of 3.6 billion Swiss francs, according to the bank. Sales for the quarter rose 30 percent to 7.6 billion Swiss francs as Credit Suisse brought in fees from brisk trading in the equity and bond markets.

The quarterly loss, which was described as “unacceptable” in a statement by the bank’s CEO, Thomas Gottstein, compared to a profit of 1.3 billion Swiss francs in the first quarter of 2020.

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World News

Credit score Suisse takes $4.7 billion hit from Archegos hedge fund scandal

Credit Suisse takes $4.7 billion hit from Archegos hedge fund scandal

A Swiss flag flies over a Credit Suisse sign in Bern, Switzerland

FABRIC COFFRINI | AFP | Getty Images

Credit Suisse announced several senior executives leaving Tuesday and proposed cutting its dividend as it weighs the heavy losses from the Archegos Capital saga.

The Swiss lender now expects a pre-tax loss of around 900 million francs (960.4 million US dollars) for the first quarter after taking on a burden of 4.4 billion francs as a result of the scandal.

“The significant loss in our Prime Services business due to the failure of a US-based hedge fund is unacceptable,” CEO Thomas Gottstein said in a trading update.

Brian Chin, CEO of the Investment Bank, and Lara Warner, Chief Risk and Compliance Officer, will be stepping down from their roles with immediate effect, the bank said.

Last week, Credit Suisse announced that it was expecting heavy losses following the collapse of US hedge fund Archegos Capital. The bank was forced to dump a sizeable amount of shares in order to sever ties with the troubled family office.

The board has also waived its bonuses for the 2020 financial year, the bank announced on Tuesday. Chairman Urs Rohner gave up his “chairman’s fee” of 1.5 million francs.

At its Annual General Meeting on April 30, Credit Suisse, together with the amended compensation report, will propose a dividend of CHF 0.10 gross per share.

“In particular, following the major US hedge fund issue, the board of directors is changing its proposal to distribute dividends and withdrawing its proposals for variable compensation for the board of directors,” the Swiss lender said in a trade update.

The company has suspended its share buyback program and does not intend to resume buying shares until it has returned to its target capital ratios and restored its dividend.

Credit Suisse stocks were trading 0.1% below the flatline by mid-morning trading in Europe.

Another scandal

Last month, the bank announced a restructuring of its wealth management business and a suspension of bonuses to contain the damage from the collapse of UK supply chain finance firm Greensill Capital.

The Board has launched two separate inquiries into the Greensill and Archegos sagas, to be conducted by third parties, “to examine not only the direct problems that arise from each of them, but also the wider implications and lessons learned . ” “”

On May 1, Chin will be replaced at the head of the investment bank by Christian Meissner, currently Co-Head of the international wealth management investment banking advisory service at Credit Suisse and Deputy Chairman of Investment Banking.

Joachim Oechslin was appointed Interim Chief Risk Officer and Thomas Grotzer Interim Global Head of Compliance on Tuesday. All three will report to CEO Gottstein.

“Combined with the recent issues related to supply chain finance funds, I have found that these cases have caused significant concern to all of our stakeholders. Together with the Board of Directors, we are determined to address these situations,” Gottstein said in a statement .

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Business

Credit score Suisse replaces executives after reporting large loss from Archegos.

Credit Suisse replaces executives after reporting big loss from Archegos.

Credit Suisse announced Tuesday that it would replace its investment bank head and head of risk and compliance after losses from its stake in Archegos Capital Management, the collapsed hedge fund, totaled nearly $ 5 billion.

The Zurich-based bank is in turmoil after a series of disasters that have damaged its reputation and are likely to diminish its global clout. Credit Suisse also warns of the risks that can lurk in the financial system as bankers and investors seek returns when interest rates are at rock bottom and stock values ​​are already frothy.

Credit Suisse detailed the financial impact of its dealings with Archegos for the first time on Tuesday, stating that it would post a loss of CHF 900 million for the first quarter after a charge of CHF 4.4 billion or CHF 4.7 billion US dollars in connection with the hedge was posted fund. The losses were higher than some estimates.

Brian Chin, CEO of Credit Suisse investment bank, will leave the company on April 30th. Lara Warner, chief risk and compliance officer, will resign immediately, the bank said.

Credit Suisse senior executives will be waiving their 2020 and 2021 bonuses, the bank said. Credit Suisse will also be canceling plans to buy back its own shares in order to boost the share price. However, the bank, eager to dispel any questions about its general health, said its capital is still at what is considered acceptable.

Credit Suisse shares fell by more than 2 percent in Zurich trading early Tuesday. They have lost a quarter of their value since the beginning of March.

Thomas Gottstein, CEO of Credit Suisse since last year, said the bank would hire outside experts to investigate what led to the “unacceptable” loss of Archegos and the bank’s stake in Greensill Capital, which collapsed last month be.

Credit Suisse’s asset management unit oversaw $ 10 billion in funds that Greensill packaged on the basis of funding from companies, many of which had poor credit ratings.

“Serious lessons are learned,” said Gottstein.

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Business

Whistle-Blower Says Credit score Suisse Helped Purchasers Skip Taxes After Promising to Cease

Whistle-Blower Says Credit Suisse Helped Clients Skip Taxes After Promising to Stop

The Swiss bank also hired Mr. Wray, then a partner at King & Spalding in Washington, who served as head of the Department of Justice’s crime department and oversaw the Enron task force. (Mr. Wray became director of the FBI three years after negotiating the final plea for Credit Suisse.)

“It is a mystery to me why, under the agreement, the US government did not require the bank to spit out some names of US customers with secret Swiss bank accounts,” said Carl Levin, then a senator in Michigan who was leading an investigation into Offshore Tax Avoidance said after the 2014 opposition agreement.

In the interview, Mr Neiman, the whistleblower’s attorney, said that in July 2014, after the plea deal was signed and Credit Suisse awaited his final conviction, he told officials from the Justice Department’s tax department and federal prosecutors who was on worked on the case that his client had information that the bank was still camouflaging money held by some US account holders. He gave them a name in particular – Dan Horsky, the retired economics professor who lived in Rochester, NY

The tip was checked out. The following year, federal agents arrested Mr. Horsky, who had amassed a fortune of $ 200 million and hidden with the help of Credit Suisse bankers using offshore shell companies, court documents show. The deal lasted several months after the bank signed its pleading agreement.

It is unclear why the Justice Department failed to notify the court and change the terms of its settlement with Credit Suisse based on information from the whistleblower – either prior to Credit Suisse’s final conviction or after Mr Horsky’s case became public. At the time of the conviction, lawyers on both sides told the court that they had no information that could affect the agreement.

Officials with authority to make the decision to review the Credit Suisse case for possible violations in 2014 and 2015 – including James Cole, who was then assistant attorney general, and Dana Boente, the US attorney at Eastern District of Virginia – did not respond to requests for comment.

In 2015, Mr Horsky pleaded guilty to defrauding the US government and said he would work with prosecutors. In 2017 he was sentenced to seven months in prison. Some details of his conviction have been sealed, and a federal judge denied a request from Bloomberg News to lift the seal. The judge said he denied the application after consulting with the Justice Department and Mr Horsky’s lawyers.

Mr Neiman’s client could be amply rewarded if the prosecution imposed further fines on Credit Suisse. According to an IRS rule, whistleblowers can receive up to 30 percent of the amount of additional money the government receives. And, said Mr. Neiman, the whistleblower has more American account holder names than Mr. Horsky’s, although he wouldn’t say how many.