The Strategist

Credit Suisse gets $ 135 million fine in New York

11/14/2017 - 13:48

Swiss bank Credit Suisse agreed to pay $ 135 million to the bank authority of New York to settle a lawsuit on illegal activities in the foreign exchange market.

dennis smith
dennis smith
Currency traders of Credit Suisse used chats to exchange confidential information about clients, coordinated transactions and tried to manipulate currency quotations or interest rates.

According to the regulator’s conclusion, the bank has been carrying out "unjustified actions" at least from 2008 to 2015. Its management was accused of "deliberately contributing to a corrupt culture" and the lack of effective control over the activities of employees.

As part of the settlement, Credit Suisse agreed to tighten control and ensure compliance with all US banking rules. The bank, like many other foreign creditors, operates in the United States through foreign affiliates, which are licensed and regulated by the state of New York.

Since 2014, New York has been studying the question of whether banks are manipulating exchange rates. In 2014 and 2015, Citigroup, JPMorgan Chase & Co, Barclays and Royal Bank of Scotland paid a total of $ 10 billion in fine for their traders cheating customers.

Earlier this year, the French bank BNP Paribas agreed to pay New York $ 350 million to settle a lawsuit about manipulating exchange rates, and Barclays paid $ 635 million in 2015.

Meanwhile, Credit Suisse faces yet another investigation. A deal with the debt of Mozambique with the participation of the Swiss bank and the French BNP Paribas will be investigated by the FBI.

The Wall Street Journal reported last year that Mozambique invested $ 2 billion in debt. Since then, the investigation has been conducted by financial regulators in the US, UK and Switzerland.

FBI investigators are going to find out who helped officials from Mozambique to appropriate funds, and how much banks contributed to corruption. This initiative will allow to open a criminal case in the future.

FBI agents have already visited Maputo, the capital of Mozambique, to find out whether local officials received illegal payments from banks.

In April 2016, the International Monetary Fund reported that the authorities of Mozambique hid information on government-guaranteed commitments of more than $ 1 billion. The IMF froze Mozambique's support program. Director of the IMF's African Department Antoinette Sayeh indicated: funds were provided to Mozambique by Credit Suisse. The British regulator c checking. The total amount of Mozambique's loan obligations was disclosed in the prospectus of issuing sovereign eurobonds and included all current debt obligations. Kroll company hired by the IMF concluded that Privinvest (owned by businessman Iskandar Safa, arms and equipment supplier), the final recipient of funds raised by Mozambique, overstated the cost of the equipment purchased for this money by $ 700 million. Also, commitments of $ 500 million were not taken into account.