Credit Suisse, the second Swiss bank, has agreed to pay 238 million euros in France to avoid criminal prosecution for illegal solicitation of customers and aggravated laundering of tax fraud between 2005 and 2012, according to an agreement validated Monday by the president of the court from Paris.
This agreement comes a week after the settlement of a dispute in the United States, concerning mortgage-backed securities, and before a highly anticipated update on Thursday on the plans of the new boss, Ulrich Körner, to turn around the number two in the sector. Swiss bank, shaken by repeated scandals.
The update on its strategy has given rise to intense speculation, especially concerning the amount of a possible capital increase and the assets that the bank could sell in order to find funds to finance its restructuring.
But investors are also paying close attention to invoices for disputes to assess the amounts the bank will need.
Read alsoCredit Suisse, the collapse of a former flagship
By agreeing to sign this legal agreement in the public interest (Cjip) concluded with the National Financial Prosecutor's Office (PNF), Credit Suisse AG avoids a lawsuit in France and settles its dispute both with the tax authorities, to which it will pay 115 million euros in damages, only with the public prosecutor, paying a fine of 123 million euros.
2 billion euros of hidden assets
The investigation by the financial prosecutor's office began in April 2016 after receiving reports in the context of mutual financial assistance for laundering tax evasion and illegal direct banking.
The investigations revealed that 5,000 French clients had had a Credit Suisse account for many years, which had not been declared to the French tax authorities.
The hidden assets amounted to 2 billion euros, recalled the president of the court Stéphane Noël.
The tax authorities imposed an adjustment on all customers, for a total amount of 168 million euros.
“
Credit Suisse did not send any account statements.
The canvassing did not respect French legislation, the sales representatives traveled to France, in complete discretion.
They identified prospects
” with “
visits to hotels, restaurants, never to the official premises of the French establishment
”, he added.
The PNF calculated the fine by taking into account "
increasing factors
", namely "
the systemic nature, a long period, the creation of tools to conceal
", detailed the prosecutor François-Xavier Dulin.
"
The bank has created offshore structures to help its customers in their desire not to declare certain assets to the French administration
", he underlined.
The PNF also took into account the “
lowering
” factors which are the “
corrective measures taken by the bank, the cooperation of the bank (with justice), the compensation of 115,000 million
” to the tax authorities.
A page turns"
The bank has twelve months to pay these sums, in three instalments.
"
It is a historical page, the vestige of an old era that the bank
has just settled", insisted during the hearing the bank's lawyer, Charles-Henri Boeringer.
In a press release, Credit Suisse recalled that this public interest judicial agreement did not include an admission of guilt and marked "
an important step in the proactive resolution
" of disputes.
Before Credit Suisse, HSBC Private Bank, a Swiss subsidiary of British banking giant HSBC, had already agreed to pay 300 million euros to escape a trial in France for laundering tax fraud on November 14, 2017. This was the very first public interest agreement signed in France.
Last week, Credit Suisse also reached an agreement with the New Jersey attorney general to settle a dispute over mortgage-backed securities.
This was Credit Suisse's latest litigation in the United States over these structured products that were at the heart of the 2008 financial crisis.
Investors welcomed these announcements of legal settlements and the action climbed more than 2% on the Swiss Stock Exchange at midday.
In 2014, Credit Suisse had to pay a hefty $2.6 billion fine in the United States after pleading guilty to helping clients lie to US tax authorities to hide assets and income in undeclared accounts.