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October 20, 2021

Credit Suisse to pay $475m to settle Mozambican corruption scandal

By Verdict Staff

Credit Suisse will pay around $475m to the US and the UK regulators to settle bribery and fraud charges in connection with $2bn Mozambican corruption scandal.

The Swiss banking group said that it will pay a $175m criminal fine to the Justice Department, $99m to the US Securities and Exchange Commission (SEC), and $200m to Britain’s Financial Conduct Authority (FCA) in settlement.

Additionally, the bank will forgive $200m of debt owed by Mozambique.

As a result, Credit Suisse expects to take a $230m hit in the third quarter of 2021.

The Scandal

The Swiss investment bank set up nearly $1bn in bond offerings and a syndicated loan between 2013 and 2016 to fund a tuna fishing industry project in Mozambique.

According to US prosecutors, at least $200m of the loans had been diverted to Credit Suisse bankers and Mozambique officials.

In 2018, money laundering and defrauding charges were filed against three former Credit Suisse bankers, two middlemen as well as three Mozambican government officials for swindling money from US investors who had invested in the loans.

In 2019, the accused bankers pleaded guilty.

Authorities accused Credit Suisse of fraudulently misleading investors and violating US bribery laws through the actions of its bankers.

Serious breaches of supervisory law’

The Swiss Financial Market Supervisory Authority FINMA closed its proceeding against Credit Suisse with connection to an investigation into its past observation activities.

In its ruling, FINMA said it has found shortcomings in the bank’s corporate governance as well as errors in the internal investigation.

The Swiss regulator stated that Credit Suisse did not pay enough attention to the risks stemming from specific sovereign lending transactions.

FINMA has ordered the bank to remediate all deficiencies identified by 30 June 2022.

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