The collapse of Silicon Valley Bank last week affected markets and financial institutions around the world. One of the most affected was the bank Credit Suissewhich was once again in the eye of the storm due to the drop in its shares on the Stock Market, which has left it just one step away from losing a quarter of its value.
By itself, the entity was in a delicate moment, which was reflected in the publication of its annual report -which was even postponed for a week- in which acknowledged “material weaknesses” with regard to its internal controls and to which was added the refusal of its main shareholder to increase its participation to avoid a possible collapse.
On top of all this, Credit Suisse was already undergoing a deep restructuring after a series of scandals they will leave him as a “weak link” in the Swiss banking sector.
Greensill bankruptcy
The bankruptcy of the financial firm Greensill in 2021 – a British company that used complex financial arrangements to lend money to companies to pay their bills – had a direct impact on the asset management arm of the bank since I had invested some $10 billion there, by means of four funds.
When an insurer refused to renew Greensill’s contracts, Credit Suisse began to liquidate them, albeit with great difficulty in establishing the value of these funds.
Despite the efforts, the british went bankrupt and it wobbled the companies that depended on it for their liquidity. Among those affected were also its creditors such as the Japanese giant SoftBank.
Archegos Fund
Just four weeks later, the US fund Archegos found itself unable to continue with its injections of money in order to cover its investments in derivatives. This triggered into a sell off on wall street which affected large banks, with Credit Suisse being the most affected, with losses of 5 billion dollars.
Loans in Mozambique
In October 2021the Swiss bank was embroiled in a scandal of corruption in Mozambique related to loans to state-owned companies dating from 2013 to 2016.
The money should have gone to finance maritime surveillance, fishing and shipyard projects but instead was diverted for bribes.
Given this, the authorities of USA and the United Kingdom sanctioned Credit Suisse for USD 475 million dollars.
Violation of quarantine rules
This scandal was uncovered by the local media clickwhich revealed in December 2021 that he President of the Bank, Antonio Horta-Osorio, there was breached the movement restrictions and the insulation standards imposed by the coronavirus pandemic.
This episode prompted further investigations by other media that revealed more breaches of health restrictions by Horta-Osorio to attend a tennis match at Wimbledon.
This controversy led the banker to resign just nine months after taking office.
Swiss Secrets
In February 2022he Organized Crime and Corruption Reporting Project (OCCRP), a consortium of 47 media outlets that includes the world and The New York Timespublished an investigation -in which he participated infobae– known as Swiss Secrets in which they revealed that the bank housed funds from clients involved in criminal and corruption cases.
The investigation was based on a long list of accounts and bank movements that go from 1940 to the end of 2010.
Trial in Bermuda
A month later, in March 2022a court in Bermuda confirmed that the former Georgian prime minister, Bidzina Ivanishvilithere was lost investments managed by former Credit Suisse banker Patrice Lescaudron.
Lescaudron had been fired from the entity in 2015 and convicted three years later for fraud in Geneva. Finally, he committed suicide two years later, in 2020.
Cocaine laundering in Bulgaria
One of the criminal cases in which Credit Suisse was involved was the one involving the money laundering linked to a Bulgarian cocaine network. This episode, uncovered in June 2022resulted in a fine of 2 million Swiss francs that the bank had to face.
Two agreements for old litigation
In October 2022, Credit Suisse settled ongoing litigation in the United States dating back to the 2008 financial crisis over mortgage-backed securities.
The case was closed after an agreement in which the bank agreed to pay USD 495 million.
meanwhile, in Francethe entity agreed to pay €238 million to avoid being prosecuted for illegal customer prospecting and aggravated tax fraud, between 2005 and 2012.
Greensill, the sequel
A few weeks ago, at the end of Februarytwo years after the bankruptcy scandal of a British firm, the Swiss Authority for Financial Markets (Finma) accused Credit Suisse of having “seriously breached its prudential obligations” talking about Risk management.
(With information from AFP)
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Source-www.infobae.com