Credit Suisse Settles with Government

International banking giant, Credit Suisse, has reached an agreement with the Department of Justice and the New York County District Attorney. The government has agreed to defer prosecution of the Swiss bank in return for payment of $536 million. If the company does not commit any further violations, it will not be prosecuted. The monitoring of the bank’s behavior will be undertaken by Swiss authorities and the Federal Reserve Bank of New York.

The government said that for a 10 year period Credit Suisse had helped clients in Iran and other foreign countries, against which there were economic sanctions, to secretly conduct financial transactions in US dollars. In addition to clients in Iran, Credit Suisse helped other clients in Libya, Sudan, Burma, and Cuba. Credit Suisse was one of several banks involved in the two year investigation. However, it is the largest of the banks involved. So far, the case has resulted in fines assessed against banks of more than $1 billion.

The investigation revealed that Credit Suisse had moved or processed more than $700 million for clients under sanction between 1995 and 2006. Additionally, the government said that the bank had manipulated and processed $1.1 billion in payments to hide their Iranian origins. Also, using code names to hide the true identities of the banks involved, a division of the bank located in London had illegally invested $150 million for banned banks in Libya and the Sudan.

Credit Suisse accepted responsibility and cooperated in the investigation. These factors were instrumental in the bank obtaining the deferred prosecution agreement. Credit Suisse said that in 2005 it had ended the business giving rise to the illegalities. Moreover, it claimed to have performed its own internal investigation and cooperated with American authorities. Additionally, the bank said that it had closed its Tehran office in 2006 and had ended all business with sanctioned countries in 2007.

It appears that the United States is attempting to exert pressure on Iran to end its nuclear program through aggressive financial sanctions. While direct sanctions on the country may have limited effect, it seems that the goal is to increase the pressure by removing the country’s access to international bankers. Moreover, it seems likely that the United States in conjunction with the New York County District Attorney, whose jurisdiction is Manhattan, are using the same aggressive tactics against other rogue states.

For more information, please see The Wall Street Journal, “Credit Suisse’s Secret Deals,” December 17, 2009, page A3, and The New York Times article.

About Richard Serafini

Welcome to my blog. I am an attorney and practice in the area of corporate trial work. Areas of particular emphasis are white collar defense, securities litigation, health care litigation, internal investigations, RICO, and financial litigation. I will be posting interesting developments in my areas of interest. I hope that you find this blog helpful and informative.