The Financial Conduct Authority has reportedly added Swiss banking giant Credit Suisse to its list of firms that require tougher supervision, reports the Financial Times.
In a letter sent in May, seen by the FT, the watchdog asked Credit Suisse to provide evidence of the steps it would take to prevent misconduct and improve accountability.
The newspaper stated that Credit Suisse is being urged to address “persistent” cultural issues, adding there had not yet been “sufficient evidence of effective remediation”.
One source told the FT that only about 20 of the roughly 60,000 firms that fall under the FCA’s remit are on the watchlist at any given time, underlining the significance of the move.
Credit Suisse told Portfolio Adviser: “We do not comment on our discussions with regulators, nor would it be appropriate for us to do so.
“As we have summarised before, we are now well advanced in executing the plan to strengthen our businesses and our risk culture.
The FCA declined to comment when contacted by Portfolio Adviser.
A persistent pattern of behaviour
Credit Suisse has regularly hit the headlines for all the wrong reasons over the past few decades, so it is not the greatest surprise it has fallen foul of the UK regulator.
In 1999, it was fined by the Japanese authorities and had its licence revoked after bankers were found to have destroyed evidence linked to an investigation about how it helped local companies conceal losses.
A year later its knuckles were rapped by the Swiss watchdog for accepting more than $200m in funds during the 1990s linked to Nigerian dictator Sani Abacha.
In 2004, a banker was arrested for allegedly helping members of Japan’s second-largest organised crime gang launder more than JPY 5bn (£30.2m). He was later acquitted, however, as he said he was not aware the money was linked to the yakuza.
In 2009, Credit Suisse was fined $536m (£435m) for circumventing US sanctions against countries including Iran and Sudan.
Tax evasion accusations
In 2011, the bank paid €150m (£128m) to settle a German tax evasion investigation and was fined nearly £6m by the UK regulator, then known as the Financial Services Authority, for systems and control failings related to the sale of structured capital at risk products to investors.
Its troubles shifted back to the US the following year, where four bankers were charged with fraudulently overstating the price of sub-prime bonds in 2007.
In 2013, the bank was fined HK$16m (£1.6m) for “regulatory breaches and internal control failings relating to position limit failures” by the Hong Kong Securities and Futures Commission.
In 2014, the US fined the bank $2.6bn after it admitted helping American citizens evade taxes.
Tax evasion also reared its ugly head in 2016 when Credit Suisse forked out €109.5m to settle similar charges in Italy.
The same year, it paid $16.5m to the US regulator after serious issues were identified in its anti-money laundering (AML) policies.
Back to Asia in 2017, the bank was fined $700,000 for AML failures linked to Malaysian sovereign wealth fund 1MDB.
Allegations of tax evasion emerged again in 2018, with homes and offices in the Netherlands and France raided. Investigations were subsequently opened in the UK, Germany and Australia.
Concerns over its business dealings with South American oil giants Petrobras (Brazil) and PDVSA (Venezuela), along with football association Fifa prompted the Swiss watchdog in 2018 to order the bank to review its AML controls.
That same year, a former banker called Patrice Lescaudron was hit with a five-year jail term for forgery, while the bank’s Hong Kong arm became embroiled in scheme where it offered jobs to the children and family members of Chinese officials in a bid to win business contracts. It was also fined for selling unsuitable products in the special administrative region.
In 2019, Credit Suisse was caught spying on its executives, resulting in chief executive Tidjane Thiam resigning.
Roaring ’20s not looking promising
The following year saw the bank caught up in a Bulgarian drug ring after it allegedly laundered more than $146m over a four-year period.
It was then battered by the collapse of two firms in 2021: Archegos Capital Management and Greensill Capital. The former saw the bank take a $5.5bn hit, while the former resulted in the suspension of $10bn of investor funds.
That year also saw it pay $350m to settle what is known as the ‘tuna bonds’ bribery scandal, which reportedly helped push Mozambique into crisis in 2016.
Credit Suisse bankers allegedly earned kickbacks for offering better terms on loans arranged for the country between 2012 and 2016.
This year has already seen its fair share of bruising Credit Suisse headlines and we are only in June.
Former chairman Antonio Horta-Osorio was forced to step down in January, less than a year after he took up the post, after he admitted to breaching Covid rules twice in 2021.
In February it was revealed that a Panama Papers-style document leak had put the spotlight on Credit Suisse’s clients, accusing the bank of serving customers who were human rights abusers and sanctioned individuals. Allegations the bank denies.
