It is a new headache for Switzerland’s second-largest bank, which is reeling from accumulated multimillion-dollar losses from risk management and regulatory compliance errors.
Both Credit Suisse and the former employee have denied wrongdoing. The bank said it would appeal the conviction.
The judges examined whether Credit Suisse and the former employee did enough to prevent a Bulgarian gang of cocaine traffickers from laundering proceeds through the bank between 2004 and 2008.
The court said on Monday that it found deficiencies in Credit Suisse both in managing relationships with the criminal organization’s clients and in monitoring the application of anti-money laundering rules.
“These deficiencies allowed the withdrawal of the assets of the criminal organization, which was the basis for the conviction of the former bank employee for qualified money laundering,” the court said.
“The company could have avoided the infraction if it had complied with its organizational obligations,” said the president of the court when handing down the sentence, adding that the former employee’s superiors had been “passive.”
Credit Suisse said the case grew out of an investigation going back more than 14 years.
The bank faces a fine of 2 million Swiss francs ($2.1 million). The court also ordered the confiscation of assets worth more than 12 million francs that the drug gang held in Credit Suisse accounts, and ordered the bank to forfeit more than 19 million francs, the amount that could not be confiscated. due to internal deficiencies of Credit Suisse.
The court sentenced the former employee, whose name cannot be cited under Swiss privacy laws, to a suspended 20-month prison sentence and a fine for money laundering.
Experts on corruption and money laundering have argued that the fact that Switzerland has taken legal action against a global banking player like Credit Suisse can send a powerful message in a country famous for its banking industry.
“This has the potential to be a watershed moment for Switzerland,” Mark Pieth, a money-laundering expert at the University of Basel, said on the eve of the trial.
“What is significant about this case is that Switzerland is taking legal action against a company and not just any company: Credit Suisse is one of the jewels in the Swiss crown.”
By Paul Carrel, Reuters agency
Source: Ambito
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