Credit Suisse Laundering Curbs Hit -- WSJ
September 18 2018 - 3:02AM
Dow Jones News
By Brian Blackstone and Pietro Lombardi
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (September 18, 2018).
ZURICH -- Credit Suisse Group AG was ordered to bolster its
anti-money-laundering processes by Switzerland's financial
regulator on Monday, but avoided any financial penalties for its
shortfalls.
The regulator, Finma, stopped short of imposing fines on the
Swiss banking giant after uncovering shortfalls over nearly a
decade through 2014 in the bank's dealings with South American oil
companies and Swiss-based FIFA, the world's top governing body for
soccer.
Investors shrugged off the rebuke, with Credit Suisse shares
down just 0.3% in early afternoon trading in Europe.
Finma said in a statement that it "identified deficiencies in
the bank's adherence to anti-money-laundering due diligence
obligations in relation to suspected corruption" involving FIFA,
Brazil's Petróleo Brasileiro SA (PBR) and Venezuela's Petróleos de
Venezuela SA.
Credit Suisse disclosed in 2015 that it had received inquiries
from U.S. and Swiss government authorities regarding its banking
relationships with FIFA-related individuals and entities.
The Swiss watchdog ordered the bank to strengthen its controls
and said it would appoint an independent third party to monitor
implementation. Finma acknowledged "some substantial" improvements
in Credit Suisse's money-laundering controls and its
cooperation.
"We are grateful to Finma for its acknowledgment of the
improvements that have been made to our compliance and control
framework over the last few years and of the additional measures
already planned by the bank," Credit Suisse said in a
statement.
The findings are "part of an ongoing review of legacy cases
across the Swiss banking sector," it added, noting that the cases
originated between 2006 and 2014, which was before the arrival of
Chief Executive Tidjane Thiam. "Finma has not imposed any fine on
Credit Suisse, not ordered any disgorgement of profits nor any
limitation of business activities," the bank said, adding that it
has hired more than 800 compliance specialists in less than three
years.
Still, the Finma report underscores the challenge Swiss banks
face to turn the page from past controversies. In July,
Switzerland's largest bank, UBS Group AG, was censured by the U.S.
Office of the Comptroller of the Currency over "systemic
deficiencies" in its anti-money-laundering systems at branches in
New York, Connecticut and Florida.
The findings from Finma come at a challenging time for Credit
Suisse, which is nearing the end of a three-year strategic overhaul
initiated by Mr. Thiam, who joined the bank in mid-2015. As part of
the overhaul, the bank has turned its focus to managing wealthy
clients' money while maintaining a streamlined investment bank.
Credit Suisse posted annual losses from 2015 to 2017, but is on
track to run a profit this year. Still, its share price is down
about 18% so far this year.
Finma also said it found shortcomings in Credit Suisse's
relations with a "politically exposed person," or PEP.
"Finma established that the bank had failed to adequately
record, contain and monitor the risks arising over a number of
years from the PEP business relationship and the responsible (and
since criminally convicted) client relationship manager," the
watchdog said.
Write to Brian Blackstone at brian.blackstone@wsj.com and Pietro
Lombardi at Pietro.Lombardi@dowjones.com
(END) Dow Jones Newswires
September 18, 2018 02:47 ET (06:47 GMT)
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