Compliance
Compliance Corner: FINMA, Credit Suisse

The latest compliance news: regulatory developments, punishments, guidance, permissions and new product and service offerings.
Credit Suisse
A report in the Wall Street Journal has said
that Credit
Suisse overlooked warnings for years while a private
banker stole from billionaire clients. The banker, Patrice
Lescaudron, was sentenced to five years in prison in 2018 for
fraud and forgery. He admitted cutting and pasting client
signatures to divert money and make stock bets without their
knowledge, causing more than $150 million in losses, according to
the Geneva criminal court.
Swiss regulator FINMA had censured Credit Suisse in 2018 for
inadequately supervising and disciplining Lescaudron as a top
earner, and said that he had repeatedly broken internal rules,
but it revealed little else about the bank’s actions in the
matter. Credit Suisse said it discovered Lescaudron’s fraud in
September 2015 when a stock he had bought for clients
crashed.
However, the report, commissioned by FINMA in 2016 and reviewed by
The WSJ, found that Lescaudron’s activities triggered
hundreds of alerts in the bank that weren’t fully probed in the
2009-15 period studied. In addition, around a dozen executives or
managers in Credit Suisse’s private bank knew Lescaudron was
repeatedly breaking rules but turned a blind eye, proposed
lenient punishment for his misconduct or otherwise glossed over
the issues because he brought in around $25 million in revenue a
year, the report found.
“This specific document corresponds to the early stages of a
closed legacy case review. Such review did not reveal any facts
that would support the criminal complaints against Credit
Suisse," a spokesperson told WealthBriefing about the
matter.
FINMA hasn't imposed any fine on Credit Suisse, neither has it ordered any disgorgement of profits nor any limitation of business activities, as was made clear in 2018.