The Swiss banking giant has a long history of making the news and mostly for the wrong reasons. This blog reviews the many scandals to have hit Credit Suisse over the last four decades, culminating in the latest revelations that have resulted in huge fines, the layoff of thousands of employees, and its stock to fall by 60%.

Credit Suisse is no stranger to scandal. 

The Swiss banking giant has been mired in impropriety dating back to 1986 when it helped Philippines dictator Ferdinand Marcos hide millions of dollars stolen from the country.

Since then, Credit Suisse has been involved in numerous other scandals, however, the latest threatens to overshadow them all. The Zurich-based bank is currently in the midst of arguably the biggest crisis in its history, with many commentators unsure of its future. 

This article provides a synopsis of the various scandals that have enveloped Credit Suisse, the current state of events, and why all financial institutions must now ensure they are fully compliant through the use of modern automated technologies. 

Credit Suisse scandals timeline: 1986 to the present day 

1986: Fake names and deposits of an ill-gotten fortune 

Credit Suisse opened bank accounts for Philippines dictator Ferdinand Marcos and his wife under fake names in order to conceal their identities and hold millions of dollars stolen from the state.

1999: Circumventing a regulatory probe in Japan

Japanese authorities found Credit Suisse to be guilty of obstructing the country’s financial regulatory body from carrying out an investigation into activity that helped clients to cover up losses. This not only resulted in a fine but also the revoking of the institution’s banking licence. 

2009: Breaching sanctions against Iran and Sudan 

Credit Suisse agreed to settle a US Justice Department probe into sanction breaches that proved lucrative for the bank between 1995 and 2007. The settlement led to the forfeiture of $536 million, the largest ever entered against an entity for International Emergency Economic Powers Act (IEEPA) violations.

2011, 2014, 2016, 2017: Multiple cases of massive tax evasion

Credit Suisse helped clients in the United States, Germany, Italy, and elsewhere in Europe to evade tax over a number of years. As a consequence, it was made to pay billions of dollars in fines, including a $2.6 billion payment in 2014 for the tax evasion scandal affecting the United States. 

2018: Corrupt Hong Kong hiring scheme

The bank agreed to pay a $47 million penalty after reaching a resolution with the United States Department of Justice (DOJ) for offering jobs to friends and family of Chinese officials in return for help in winning new business.

What is behind the 2022 Credit Suisse scandal?

All of the instances of financial malfeasance listed above, lead us to the present day and the latest predicament that Credit Suisse finds itself embroiled in.

The 2022 scandal made headlines in February 2022 when the bank became the first in history to undergo a criminal trial in Switzerland. Authorities charged the bank with direct involvement in a Bulgarian cocaine-smuggling ring, with millions of euros laundered directly through the bank.

Furthermore, in February 2022 Credit Suisse suffered a massive data leak. The information disclosed on thousands of customer accounts revealed that the bank’s clientele included people traffickers, drug traffickers, and individuals involved in torture. 

The consequences of the 2022 scandal: fines, job losses, and a reputation in tatters

The reality is that this latest scandal has been even more damaging as it comes off the back of all the previous cases of regulatory failings and financial corruption.

For instance, the recent €238 million fine levied by French prosecutors was in relation to a tax evasion scheme between 2005 and 2012, and narrowly allowed the bank to avoid criminal proceedings. What makes the Bulgarian drug money scandal so damaging is the nature of it; the fact that one of the world’s largest banks aided and abetted a criminal gang to launder millions of euros. 

The financial fallout, the impact on the bank’s workforce, and the reputational damage caused by this series of scandals has been enormous.  

Since 2020, Credit Suisse has faced $4 billion in litigation costs and suffered losses of $4.09 billion. In October 2022, the bank also reached a $495 million settlement with United States regulators over its role in the 2008-2009 financial crisis. This fine follows a 2017 penalty of $5.28 billion for its role in the subprime mortgage crisis.

Credit Suisse recently announced that it would lay off 9,000 employees: 2,700 by the end of 2022 and a further 6,300 by the end of 2025. To stabilise itself, it is seeking $4 billion in a fundraising round, from the Saudi National Bank and others. As a result, in 2022 Credit Suisse’s stock price has fallen by almost 60%. 

New CEO Ulrich Koerner is attempting to begin a new chapter for the bank by reaching settlements that will conclude all investigations into malpractice and corruption. However, the bank continues to deny responsibility for many of the more recent scandals and that it largely acted in accordance with the law. 

How automated technology can help banks comply with their AML and KYC obligations 

According to the Financial Times, Credit Suisse has admitted that it has had a lax approach to regulatory compliance, resulting in an organisation-wide failure to identify risks.

As the UK’s Financial Conduct Authority recently reported, Credit Suisse aren’t alone. Many banks are still failing to comply with anti-money laundering (AML) and know your customer (KYC) regulatory frameworks, often as a result of poor onboarding processes and a reliance on outdated manual workflows.

RiskScreen’s mature, integrated technologies are already providing numerous banks with the support they need to fight illicit activity and to avoid punitive action.

We build solutions that allow the data that you hold on your customers to be used to maximum effect in order to identify and manage the risk of financial crime, thus ensuring compliance with ever-evolving regulatory standards.

Our award-winning technology not only bolsters your AML defences, but it has also been designed to improve compliance efficiency at every stage of the customer lifecycle.

Whatever your requirements, you can rest assured that your anti-money laundering (AML) and know your customer (KYC) processes will be immediately transformed, with full scalability in order to future-proof your compliance programme.

For a no-obligation demonstration of how RiskScreen can work for your organisation, contact us today.


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