Credit Suisse may have disappeared, but it is far from forgotten. The London Supreme Court is the newest location that pops up the shortcomings in the venerable Swiss bank before the emergency takeover in 2023 by arch -rival UBS.
The London Rolls building is where a legal battle of $ 440 million is being held between a Credit Suisse Investment Fund, Softbank and a subsidiary of Greensill Capital, the group founded by the Australian financier Lex Greensill. In an attempt, the fund brought the fund to reclaim hundreds of millions of dollars, saying that investors lost after the collapse of the 2021 Greensill, which in turn was reduced by Softbank.
The implosion of Greensill ensured that Credit Suisse collected $ 10 billion in money and closed money that had borrowed money through the financial financial affairs of the Supply chain, so that the savings of more than 1,000 of the most appreciated customers of the Swiss bank were taken care of.
Mr. Justice Miles, the judge who foreseen the four -week trial, ordered the release of a report drawn up on Wednesday for the Swiss regulator Finma by an external law firm. He also ordered the release of a copy of Finma’s subsequent statement about the relationship of Credit Suisse with Greensill, after requests from the Financial Times and other media organizations. Fragments of the 500 pages files are presented in the test as proof.
The previously confidential Finma files reveal new information about the nature of the relationship of Credit Suisse with Greensill, as well as the cultural shortcomings with which UBS has to deal with the continued integration of the two lenders.
Here are the highlights.
Secrets and lies
The relationship of Credit Suisse with Lex Greensill caused “enormous reputation damage” to the nowed deed bank, where her managers “naive” on information they received from the Australian financier, according to the financial regulator from Switzerland.
Finma said that the bank did not act on warnings that received about Greensill Capital and sometimes hinded researchers during her probe.
The watchdog said that questions to credit Suisse about allegations against metal magnate Sanjeev Gupta and Greensill “sometimes incomplete, misleading or incorrectly answered” by the bank.
“Critical questions were repeatedly resistance to the bank and the top management level, even when the regulator is repeatedly asked. This behavior is difficult to understand,” Finma added.
The 2022 reports also show how Lex Greensill was able to “play the different interests” within Credit Suisse “against each other”, according to Finma. A spokesperson for Lex Greensill did not immediately respond to a request to ask for comments.
Since the takeover of Credit Suisse sponsored by the State, UBS has been forced to tackle the legacy of his former rival and has so far agreed to pay hundreds of millions of dollars to arrange other legal matters. UBS says that the Finma files have to do with Legacy Credit Suisse cases that date from before the acquisition.
Anonymous tips
The Finma files show that the management of Credit Suisse has received various anonymous tips and warned them of Greensill Capital, in addition to confronting a whole series of “negative” articles of the FT and others about the group.
Greensill Capital claimed that the technology used to bring about a revolution in the steadfast niche of Supply-Chain financing, presenting his role to tackle the problem of slow invoice payments.
In a December 2022 enforcement government, Finma said that anonymous tips for the Bank’s top management did not do in -depth investigations.
“This despite the fact that the specific content and formulation of the anonymous references would suggest that they should be taken seriously,” said Finma. “The bank naively relied on information from Greensill.”
In one case, after an anonymous e -mail that expressed concern about the relationship between the bank with Greensill, Michel Degen, who led the Swiss and EMEA Asset Management Unit of the bank, wrote to members of the Credit Suisse board.
In the statement, Degen “Greensill Capital described as a successful and very professional business partner who had investigated the bank in detail,” said Finma. “He took the text used here of a statement from Lex Greensill,” the regulator added.
A lawyer representing Degen told the FT on Thursday that a statement from Greensill was added at the end of the E -mail.
“If you say that Mr. Degen repeated what Lex Greensill said, read the report wrong,” added Degen’s lawyer.
Credit Suisse fired 11 employees who, according to the files, were considered ‘jointly responsible’ to fail the bank about Greensill.
‘Namen or worse’
Finma’s reports shed more light on the consequences of an FT article that revealed in 2020 that Greensill’s Backer Softbank had invested in the Suisse funds credit, which also borrow substantial amounts to other companies supported by the Japanese technology group.
The bank initially issued a statement stating that the recent media reports contain “inaccurate and misleading statements”. After an internal investigation, however, Credit Suisse discovered that managers had signed a so -called “side letter” with Softbank that violated the rules of the funds.
The chairman of the Credit Suisse audit committee stated in an e -mail about the findings of the investigation: “The behavior of the managers is, I am sorry that, negligent or worse.”
Credit Suisse reprimanded two employees about the side letter and gave them a “last warning”. Details of this reprimand in the Finma files show that a “misleading” statement about the funds had been announced.
Company spies set
The reports also show that Credit Suisse leaders in vain tried to push Greensill to reduce financing to Gupta GFG Alliance, exposure with which large losses caused the bank’s customers after the collapse of Greensill.
According to Finma’s ruling, Credit Suisse has hired a private research agency, diligence, to produce a report on GFG in 2018 because of the growing concern about the liquidity of the group.
This was a year before a espionage scandal hit the bank, which would eventually precipitate the exit of Credit Suisse’s Chief Executive, Tidjane Thiam. The bank had individually ordered private researchers at Investigo to spy on his head of Wealth Management, IQbal Khan, after resigning to move to UBS.
The GFG report from the researchers increased various red flags around the companies of Gupta, including allegations around non -known party transactions and their suspected participation in a “carousel fraud”, according to Finma’s statement.
GFG was later investigated at the serious fraud office of the UK, but denied misconduct. GFG refused to comment.
Plans to reduce the exposure of funds to the companies of Gupta were already discussed in December 2018, in the same month that the head of the bank shared the findings of the private researchers report with colleagues.
Lex Greensill made a series of commitments to reduce the exposure to Gupta and told Credit Suisse managers: “You have it in blood from me. No IFS and no March. I can be binded to this personally”. Finma, however, discovered that the Australian “also put pressure on portfolio management to buy bonds that actually increased exposure”.
Employees often expressed an alarm about the constant high exposure of the funds to the companies of Gupta, where a senior executive e -mails a colleague: “Why is GFG back on 1 billion !!!!!”
‘I don’t know if I find that very reassuring’
The Finma files also shed light on the bank’s attempts to get a grip with the practice of Greensill to finance so-called “future claims”, a term for hypothetical future invoices on transactions that still had to be agreed.
Finma discovered that Krediet Suisse “was unable to distinguish between and to monitor the future and actual claims”, while references to the term did not appear in the documents or marketing materials of the fund.
An employee who asked a senior colleague about the practice of financing future claims, was told in April 2020 that it was “all good” because the issue was discussed with Lex Greensill. The employee replied: “Hmmm. I don’t know if I find that very reassuring”.
Greensill collapsed less than a year later, in March 2021. Two years later, Credit Suisse would follow it.