Credit Suisse is facing another setback as the Swiss bank announced on Wednesday that a potential court judgment against one of its subsidiaries would force it to pay a total sum in excess of $500 million.
The pending judgment will be passed by a Bermuda court against the bank’s local life insurance subsidiary, Credit Suisse Life Bermuda.
“Credit Suisse has previously taken reserves against this matter and intends to pursue all available legal actions. We will consider whether any further reserves are required as part of our first-quarter results, due to be published on April 27, 2022,” the bank stated.
Stealing from a Billionaire
Though the bank did not provide any details about the case, the Financial Times reported that the lawsuit is related to the former Georgian billionaire Prime Minister, Bidzina Ivanishvili. He is trying to reclaim funds that were stolen by a former Credit Suisse employee.
Ivanishvili filed multiple criminal complaints against Credit Suisse in Switzerland and sued its insurance subsidiary in Bermuda.
Citing anonymous sources, the report claimed that the Bermuda court will pass the judgment in favor of Ivanishvili as soon as next week.
The dispute between Ivanishvili and Credit Suisse started in 2011 when he was one of the wealthy clients of the Swiss investment bank. Then, it surfaced that Credit Suisse private banker Patrice Lescaudron defrauded some of the clients, including Ivanishvili, to fund his lavish lifestyle.
However, Credit Suisse maintained that Lescaudron was a successful rogue operator who duped the bank’s clients without the knowledge of his superiors and colleagues. He was convicted in 2018 and died by suicide in 2020.
But, a Finma report released last February found that Credit Suisse ignored several warning signs, suspicious transactions and even four disciplinary proceedings.
Meanwhile, the Swiss bank is riddled with other controversies as well. It is currently facing a criminal trial in Switzerland for serious anti-money laundering lapses, while a recent data leak showed a long history of the bank in serving clients with criminal records.
