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Swiss police raided Credit Suisse CS 0.41%
The offices of Group AG last week, the bank said, as part of an investigation into collapsed financial firm Greensill Capital.
The failure of Greensill in March hammered the Swiss bank. Credit Suisse managed $ 10 billion in investment funds that funded Greensill’s supply chain finance loan programs. Credit Suisse has recovered around $ 7 billion of the $ 10 billion invested so far in the Credit Suisse-Greensill funds.
“During a formal proceeding that is not directed against Credit Suisse, data was collected,” a bank spokesperson said in an emailed statement. He said the bank is fully cooperating with the authorities.
Swiss newspaper NZZ am Sonntag previously reported on the searches of Credit Suisse offices, claiming they were part of a Zurich prosecutor’s investigation into Greensill. The newspaper said Switzerland’s economic affairs department had filed a criminal complaint alleging unfair competition violations related to Greensill.
Zurich’s public prosecution and economics department did not immediately respond to requests for comment.
A spokesperson for Greensill, which is under the control of a UK bankruptcy administrator, did not immediately respond to a request for comment.
Switzerland’s main financial regulator, Finma, is conducting ongoing civil enforcement proceedings against Credit Suisse regarding its management of Greensill. For several years, the bank’s asset management arm bought supply chain finance loans generated by Greensill and placed them in investment funds that were sold to investors as relatively safe investments. .
In fact, many of Greensill’s loans were for subprime borrowers and were not part of traditional supply chain finance, a type of short-term cash advance for businesses.
Weeks after Greensill’s collapse, the bank was hit even harder when another client, family office Archegos Capital Management, imploded, costing Credit Suisse $ 5.5 billion to exit trading. .
At a shareholder meeting Friday to vote for two new board members, Credit Suisse chairman António Horta-Osório said the bank had made significant progress since it started in April on improving risk management.
To avoid further explosions, he added new roles and reworked the way he manages risk. The board members who joined on Friday, Axel Lehmann and Juan Colombas, both held high-risk positions in financial institutions.
Write to Margot Patrick at [email protected]
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Published in the print edition of October 4, 2021 under the title “Credit Suisse Is Raided in Greensill Collapse Inquiry”.
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