Credit Suisse Asked by Lawmakers About Sanctions Compliance

(Bloomberg) -- Credit Suisse Group AG was asked by U.S. lawmakers about its compliance with sanctions imposed on Russia, as scrutiny of firms managing the wealth of rich Russians increases.

Carolyn Maloney, chairwoman of the Committee on Oversight and Reform, and Stephen Lynch, who chairs the Subcommittee on National Security, in a letter Monday asked Chief Executive Officer Thomas Gottstein to hand over information related to the matter. The Wall Street Journal reported on the letter earlier Monday.

The role of Switzerland as a place for Russia’s wealthy to stash their money is coming under increased examination, after Ukrainian President Volodymyr Zelenskiy criticized the nation. Gottstein said earlier this month that about 4% of the assets run by his bank’s wealth management arm were with Russian clients, either in the country or nationals living abroad.

The lawmakers cited earlier Financial Times reporting on a securitization deal Credit Suisse completed tied to a portfolio of loans to wealth clients. That portfolio had suffered defaults in 2018 tied to previous rounds of sanctions of Russian individuals. Credit Suisse asked investors who had received information about the deal to destroy it after details of the securitization were reported, the FT said.

Credit Suisse said in a March 3 statement that the request for investors who didn’t participate in the deal to destroy documents related to a non-disclosure agreement they signed. The transaction and the request “are entirely unrelated to the ongoing conflict in Eastern Europe,” the bank said at the time. A spokesman for the bank declined to comment on the lawmakers’ letter Monday. 

Credit Suisse has stopped pursuing new business in Russia and is helping its clients unwind their Russia exposure, Bloomberg reported earlier Monday. The bank has moved roles out of the country and is assisting employees to relocate elsewhere.

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