Credit Suisse fined US$2.6b for helping rich evade tax using false names

PUBLISHED : Tuesday, 20 May, 2014, 9:09am
UPDATED : Wednesday, 21 May, 2014, 12:10am

Credit Suisse became the largest bank in 20 years to plead guilty to a US criminal charge, and will pay a US$2.5 billion fine to the authorities for helping Americans evade taxes, US Attorney General Eric Holder said.

We deeply regret the past misconduct that led to this settlement
BRADY DOUGAN, CREDIT SUISSE

But the Swiss bank was able to keep its top management in place, and New York state's banking regulator said it had decided not to revoke Credit Suisse's licence.

US prosecutors said the bank helped clients deceive American tax authorities by concealing assets in illegal, undeclared bank accounts, in a conspiracy that spanned decades, and in one case began more than a century ago.

"This case shows that no financial institution, no matter its size or global reach, is above the law," Holder said in Washington.

Credit Suisse will pay financial penalties to the US Department of Justice, the Internal Revenue Service, the Federal Reserve and New York's banking regulator, the New York State Department of Financial Services, to settle the matter.

It had already paid just under US$200 million to the Securities and Exchange Commission.

"We deeply regret the past misconduct that led to this settlement," Credit Suisse chief executive Brady Dougan said.

Credit Suisse, Switzerland's second-biggest bank, said it would take an after-tax charge of 1.6 billion Swiss francs (HK$13.9 billion) in the second quarter.

In a move aimed at appeasing investors, Credit Suisse also announced it would begin paying out roughly half its profits to shareholders once it hits a key capital ratio, and would reduce assets, sell real estate and take other actions to do so. The bank said it expects to reach the 10 per cent capital ratio goal by the end of the year.

Dougan and chairman Urs Rohner had come under pressure from Swiss politicians to resign.