Credit Suisse CEO admits misconduct but blames staff

Wednesday 26 February 2014 18.26
Credit Suisse CEO Brady Dougan said the bank took compliance with US tax laws 'very seriously'
Credit Suisse CEO Brady Dougan said the bank took compliance with US tax laws 'very seriously'

Credit Suisse, accused of helping US clients hide billions from the taxman, has acknowledged there had been "misconduct" by some of its employees but said management was unaware.

"Credit Suisse acknowledges that misconduct, centred on a small group of Swiss-based private bankers, previously occurred at our bank," it said in a statement submitted to the US Senate.

However it insists that the bank management had been unaware of the misdeeds. 

The document included the statement Credit Suisse chief Brady Dougan was set to give before a US Senate panel, a day after a scathing Senate inquiry showed his bank had used elaborate measures to help some 19,000 wealthy US clients evade taxes. 

"We deeply regret that, despite the industry-leading compliance measure we have put in place, before 2009, some Credit Suisse private bankers appear to have violated US law," the statement said, citing a "broad and deep" independent investigation commissioned by the bank.

The internal probe "found no evidence that Credit Suisse's executive management was aware of these problems," it said, adding though that "we accept responsibility for and deeply regret these employees' actions".

The US Senate report, based on a two-year investigation, maintained yesterday that Credit Suisse had "nearly 19,000 US customers with hidden Swiss assets totalling nearly $5 billion" as of 2006.

That figure represents some 85% of the bank's more than 22,000 US customers in 2006 with Swiss accounts whose assets, at their highest, exceeded $13.5 billion, the report said.

Among the bank's cloak-and-dagger practices, Swiss bankers were sent to the United States to secretly find clients, leaving no paper trail, at events sponsored by the bank - such as at golf tournaments in Florida.

The bank also helped its clients find "intermediaries" who could help them create offshore shell companies to hide the money trail from the Internal Revenue Service, the Senate report said.

In the draft of his statement, Mr Dougan insisted that "Credit Suisse takes the issue of compliance with the US tax and securities laws very seriously, and we are absolutely committed to a culture of respect for US laws".