Ex-Credit Suisse Fraudster's Victims Turn to Newspaper Ad
The group booked a full-page ad in U.K. and European editions of the Financial Times in the latest salvo in the battle between the half-dozen wealthy customers from across eastern Europe and the Zurich-based lender.
Patrice Lescaudron was convicted more than a year ago for running a fraud scheme that caused damages of more than $140 million. The clients continue to claim they lost more than that, and the bank is not disclosing all that it knows about the disgraced banker’s deception.
“They did not believe customer assets would be stolen and mismanaged, or that they would have to fight Credit Suisse for the truth behind how fraud of this magnitude was able to take place for over ten years,” reads the ad, which ran in Friday’s edition of the Financial Times to coincide with the bank’s annual meeting in Zurich. “Since the discovery of the fraud, Credit Suisse has worked against our clients’ efforts to understand how the crimes were perpetrated and what happened to their assets,” the text continues.
Other papers including Switzerland’s Neue Zuercher Zeitung and Le Temps declined to print the ads. NZZ said in a statement that it chose not run the ad because under Swiss law it’s responsible for the entire content of the paper including ads, and that the ad in question contains “serious allegations which we were not able to check thoroughly due to shortage of time.” Le Temps said it rejected the ad “because the short-term notice of the request did not allow the identity of the advertiser and the content of the advertisement to be verified more precisely.”
Credit Suisse has maintained since the case began more than three years ago that it knew nothing of Lescaudron’s deception. The bank says it was as much the victim as his clients, which include a businesswoman who made her fortune in soft drinks, a pair of Russian construction magnates, and billionaire and former Georgian prime minister Bidzina Ivanishvili.
“Credit Suisse follows a zero-tolerance approach regarding misconduct by its employees,” the bank said in statement it posted on its website, adding that it was legally recognized as an injured party in the matter.
The full-paged ad goes on to demand Credit Suisse disclose the results of its own internal investigation into the fraud, and also ask why the bank hasn’t let its clients know the details of the findings of Swiss financial regulator Finma.
The bank responded to this point in its statement, saying, “all parties admitted to the criminal proceedings have full access to the criminal file, which contains all the information submitted by Credit Suisse AG in response to requests of the prosecutor and the court.”
Finma said in September that Credit Suisse’s supervision of Lescaudron was “inadequate” in part due to his perceived status as a star at the bank’s wealth management unit. The lender has addressed its compliance shortcomings with a series of measures that will be monitored by an independent third party, Finma said. Credit Suisse was not otherwise fined or punished by the regulator.
While the case has shone an unwelcome spotlight on Credit Suisse’s compliance, there’s been little indication of what the cost of the case might ultimately be. The bank said on Wednesday that its estimate at the end of the first quarter for group-wide losses related to legal proceedings not covered by existing provisions was between zero and 1.4 billion Swiss francs ($1.37 billion). It did not, however, specify which cases that applies to.
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