Bermuda Court Orders Credit Suisse to Provide Information Relating to $1 Billion Fraud
For the second time in as many months, a court has ordered Credit Suisse to turn over documents to victims of an estimated $1 billion fraud carried out by Credit Suisse personnel over seven years, despite the bank’s own efforts to shield the information from its own clients, Metigen, which represents certain victims, announced today.
This month, the Supreme Court of Bermuda ruled that Credit Suisse Life, the Bermuda insurance division of Credit Suisse, must hand over documents to victims that the bank had thus far attempted to shield from its own clients. The ruling follows a similar decision by a federal court in New York.
“For five years, the client victims of Credit Suisse have asked the bank to provide answers explaining how it missed such a brazen fraud committed by its own employee for almost a decade,” said a Metigen spokesman for the affected victims. “At every turn, Credit Suisse has fought its own clients and refused to help. We are pleased that now courts in two countries have ordered Credit Suisse to finally do what’s right and look forward to reviewing any information produced to determine the extent of any legal claims the victims may have against the bank.”
The documents include emails between Credit Suisse employees during the fraud and details of the transactions which led directly to estimated losses of $400m on the life insurance policies. The Court also ordered that Credit Suisse should provide details of the PwC internal report into the crime which Credit Suisse has refused to share with the affected clients. The documents also concern the fees and commissions paid to other divisions of Credit Suisse as a result of illegal activity on the life accounts. The Chief Justice gave his preliminary view that Credit Suisse Life should pay the costs of the two-day hearing, which involved cross-examination of the Bank’s Swiss law experts by English leading counsel.
The ruling comes as Credit Suisse seeks to recover from the resignation of CEO Tidjane Thiam on 7th February amid an ongoing spying scandal and reported power struggle with the Chairman, Urs Rohner, whose own resignation was demanded by some of the Bank’s largest shareholders. Thomas Gottstein, who ran Credit Suisse’s Swiss operations, has been appointed the new CEO with a brief to clear up the Bank’s culture.
The spokesperson added: “We are delighted with the ruling and look forward to Credit Suisse’s full compliance with the Court’s decision. Credit Suisse has continually flouted its obligations to discover all relevant documents, and has tried to hide behind Swiss law in actively trying to prevent our clients’ efforts to uncover the truth behind the huge losses and the failures of Credit Suisse entities to prevent the same.
It has been clear for some time that there are fundamental flaws in Credit Suisse’s corporate culture and failures at the highest level. We hope that the appointment of Mr. Gottstein, with his experience in wealth management, will lead to a change in direction for Credit Suisse, including in relation to how clients are treated. We look forward to working with him to bring this situation to a conclusion.”
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