Credit Suisse is an ideal target

New lawsuits arrive almost daily for Switzerland’s second largest bank. This should make the financial industry think twice.

The so-called “CS Victims” group considers itself as such. But right now, they’re the ones dealing the most blows against Credit Suisse. The group of Eastern European oligarchs, including the former Georgian Prime Minister Bidzina Ivanishvili filed a complaint a few days ago in the Channel Island of Guernsey. The charges target a certain Green Vals Trust and a bank-arranged trustee.

But the charges are new, even unexpected, at least compared to those seen so far related to the fraud committed by the former Credit Suisse banker Patrice Lescaudron. The trustee refused to make payments to the trust in March and April on several occasions due to the “geopolitical situation in Eastern Europe”. It violated the rights of beneficiaries, including ostensibly Ivanishvili himself.

Victory in Bermuda

The accusers argue that Ivanishvili is a Georgian and French citizen and has no ties to any sanctions person or organization. This means that the beneficiaries of the trust were discriminated against. According to people familiar with the case, the damages sought are relatively modest. But that doesn’t make the deal any less explosive for Credit Suisse and the financial industry as a whole.

The group should be taken very seriously. Like previously reported, they picked up a major victory in Bermuda in March. The case is now costing them US$600 million in damages compared to an initial estimate of US$500 million. But Ivanishvili and the others are asking for $800 million in return and the two sides are set to face off in court in the fall, this time in Singapore.

American lawyers at your fingertips

Credit Suisse appears to have become an ideal target for legal action. US law firms are preparing class action lawsuits against Credit Suisse for the double fiasco linked to the collapse of Greensill’s supply chain funds and the implosion of the Archegos family office. Now it looks like new charges are in sight. Potential US plaintiffs appear to be to accuse the bank to continue serving Russian oligarchs after the outbreak of war in Ukraine in March, breaking US law.

The bank itself confirmed that charges have been brought against senior management and the board of directors linked to Archegos. It has also been reported that a US pension fund wants to take legal action against the former president. Urs Rohner. It comes just as clients of Greensill funds have publicly voiced their grievances that they may have to wait up to five years to get their money. And they also threaten legal action.

Confirm old snapshots

That virtually anything that comes to mind potentially leads to new legal charges should be food for thought. Even if the bank has only itself to blame. The measures taken by the authorities within the framework of the The Mozambican brothel and the regulatory slap last fall related to “Spygateshow a bank that went wrong – ethically. The “Switzerland SecretsThe February leaks related to its former dealings with criminals and potentates confirm many of the old clichés about the Swiss bank.

Representatives of the financial sector have sounded the alarm on “Suisse Secrets” in the face of the wave of charges that is sweeping over one of the main banks in the country. Each case means Credit Suisse is in the headlines for months, with the alleged missteps lingering in everyone’s head. This is bound to keep Switzerland and the financial sector at the center of an importunate and very public debate.

Vladimir Poutine

As far as Russian sanctions are concerned, opinions are rather clear. the accusations by the Committee on Security and Cooperation in Europe last week at a briefing are not easy to read.

“Long recognized as a destination for war criminals and kleptocrats to hide their plunder, Switzerland is a key catalyst for Russian dictator Vladimir Putin and his cronies,” the panel said.

“Panelists discussed how a compromised Switzerland affects U.S. national security and whether the United States should rethink its strategic bilateral relationship with Switzerland,” they added.

Block more assets than necessary

The Russian sanctions regime promises to be a very public source of criticism, but it can also become an inadvertent personal target when it comes to industry clients. The charges brought by CS Victims linked to Green Vals Trust show that customers not directly affected by the sanctions feel discriminated against and can take legal action.

All this is not very far-fetched. According to the Swiss government, Swiss banks are doing everything possible to ensure compliance. They freeze far more assets than necessary under Swiss rules. But this “over-compliance” could also lead to some form of belated rematch in the future.