Arab Press

بالشعب و للشعب
Friday, Aug 22, 2025

Credit Suisse Was Alerted to Banker’s Misconduct Years Before Charges

Credit Suisse Was Alerted to Banker’s Misconduct Years Before Charges

Credit Suisse Group AG overlooked red flags for years while a rogue private banker stole from billionaire clients, according to a report by a law firm for Switzerland’s financial regulator.

The private banker, Patrice Lescaudron, was sentenced to five years in prison in 2018 for fraud and forgery. He admitted cutting and pasting client signatures to divert money and make stock bets without their knowledge, causing more than $150 million in losses, according to the Geneva criminal court.

The regulator, Finma, publicly censured Credit Suisse in 2018 for inadequately supervising and disciplining Mr. Lescaudron as a top earner, and said he had repeatedly broken internal rules, but it revealed little else about the bank’s actions in the matter. Credit Suisse said it discovered Mr. Lescaudron’s fraud in September 2015 when a stock he had bought for clients crashed.

However, the report, commissioned by Finma in 2016 and reviewed by The Wall Street Journal, found Mr. Lescaudron’s activities triggered hundreds of alerts in the bank that weren’t fully probed in the 2009-15 period studied. In addition, around a dozen executives or managers in Credit Suisse’s private bank knew Mr. Lescaudron was repeatedly breaking rules but turned a blind eye, proposed lenient punishment for his misconduct or otherwise glossed over the issues because he brought in around $25 million in revenue a year, the report found.

It said Mr. Lescaudron’s “disregard of internal directives and guidelines, the inadequate safeguarding of client documentation as well as unauthorized settlements of client transactions had been known to the bank since June 2011.”

The report found the irregularities were analyzed and escalated to a certain extent, but not enough. “None of the parties involved felt responsible for conclusively analyzing the already known as well as the resulting questions and drawing the necessary conclusions,” it said.

A business-risk manager who reported some of the incidents to superiors told law-firm investigators that he had feared further escalation would be seen as disloyal or that he would lose his job, according to the report.

Credit Suisse lost a bid last year in Switzerland’s Supreme Court to prevent the 272-page report by Swiss law firm Geissbühler Weber & Partner from being accessed by Geneva prosecutors still investigating the bank over the matter.

According to the report, the bank fired two executives after its own investigations into the fraud, and three more got written sanctions in their employment files.

A Credit Suisse spokesman said the report was part of the early stages of the review Finma concluded in 2018. It said the review “did not reveal any facts that would support the criminal complaints against Credit Suisse.” After Finma’s 2018 rebuke, Credit Suisse said it had improved its systems and added hundreds more compliance staff.

Mr. Lescaudron served a two-year pretrial detention and was released in 2019. He killed himself last year.

Finma declined to comment. The law firm said it couldn’t comment. The Geneva prosecutor’s office declined to comment on its investigation. A lawyer for Mr. Lescaudron’s family declined to comment.

The Journal reviewed a copy of the law firm’s April 2017 report obtained by some former clients of Mr. Lescaudron who formed a group called CS Victims. The former clients include Bidzina Ivanishvili, a billionaire former prime minister of Georgia who is suing Credit Suisse in Singapore and Bermuda for around $800 million, alleging breach of trust. Credit Suisse is contesting Mr. Ivanishvili’s claims and denies any wrongdoing.

A spokesperson for CS Victims said the report shows Credit Suisse ignored alerts and warnings and had multiple opportunities to prevent Mr. Lescaudron’s crimes but chose not to. The spokesperson said the bank “must now accept responsibility and compensate the clients without delay.”

The law firm’s report said it didn’t find misconduct by Credit Suisse employees executing Mr. Lescaudron’s falsified orders. But it said the fact the orders could be falsified for so long without anyone noticing showed weaknesses in the bank’s antifraud measures.

The high-profile case is among several controversies that have bruised Credit Suisse’s standing with shareholders and the global rich who expect it to be a fortress for their money. Finma started enforcement proceedings in September over the bank’s handling of employee surveillance after a spying scandal, and Swiss federal prosecutors charged it with failing to prevent money laundering through the bank by a Bulgarian criminal organization and an employee more than a decade ago.

In January, Credit Suisse said it would post a fourth-quarter 2020 loss because of an $850 million legal charge for toxic security sales.

Credit Suisse said it was cooperating with Finma in the spying enforcement proceedings and would incorporate lessons learned. It denies the allegations in the federal criminal charges.

Chief Executive Thomas Gottstein said in December the bank would be more disciplined to avoid future litigation.

Mr. Lescaudron joined Credit Suisse in 2004 after working for a cosmetics company in Russia and as an auditor. He hadn’t worked in banking but swiftly became one of the bank’s top revenue producers as a handler to Russian and post-Soviet state billionaires.

Newsletter

Related Articles

Arab Press
0:00
0:00
Close
Dogfights in the Skies: Airbus on Track to Overtake Boeing and Claim Aviation Supremacy
Tim Cook Promises an AI Revolution at Apple: "One of the Most Significant Technologies of Our Generation"
Are AI Data Centres the Infrastructure of the Future or the Next Crisis?
Miles Worth Billions: How Airlines Generate Huge Profits
Zelenskyy Returns to White House Flanked by European Allies as Trump Pressures Land-Swap Deal with Putin
Beijing is moving into gold and other assets, diversifying away from the dollar
Trump Backs Putin’s Land-for-Peace Proposal Amid Kyiv’s Rejection
Zelenskyy to Visit Washington after Trump–Putin Summit Yields No Agreement
Iranian Protection Offers Chinese Vehicle Shipments a Cost Advantage over Japanese and Korean Makers
United States Sells Luxury Yacht Amadea, Valued at Approximately $325 Million, in First Sale of a Seized Russian Yacht Since the Invasion of Ukraine
Saudi Arabia accelerates renewables to curb domestic oil use
Cristiano Ronaldo and Georgina Rodríguez announce engagement
Asia-Pacific dominates world’s busiest flight routes, with South Korea’s Jeju–Seoul corridor leading global rankings
Private Welsh island with 19th-century fort listed for sale at over £3 million
Sam Altman challenges Elon Musk with plans for Neuralink rival
Australia to Recognize the State of Palestine at UN Assembly
The Collapse of the Programmer Dream: AI Experts Now the Real High-Earners
Armenia and Azerbaijan to Sign US-Brokered Framework Agreement for Nakhchivan Corridor
British Labour Government Utilizes Counter-Terrorism Tools for Social Media Monitoring Against Legitimate Critics
WhatsApp Deletes 6.8 Million Scam Accounts Amid Rising Global Fraud
Texas Residents Face Water Restrictions While AI Data Centers Consume Millions of Gallons
India Rejects U.S. Tariff Threat, Defends Russian Oil Purchases
United States Establishes Strategic Bitcoin Reserve and Digital Asset Stockpile
Thousands of Private ChatGPT Conversations Accidentally Indexed by Google
China Tightens Mineral Controls, Curtailing Critical Inputs for Western Defence Contractors
JPMorgan and Coinbase Unveil Partnership to Let Chase Cardholders Buy Crypto Directly
British Tourist Dies Following Hair Transplant in Turkey, Police Investigate
WhatsApp Users Targeted in New Scam Involving Account Takeovers
Trump Deploys Nuclear Submarines After Threats from Former Russian President Medvedev
Germany’s Economic Breakdown and the Return of Militarization: From Industrial Collapse to a New Offensive Strategy
Germany Enters Fiscal Crisis as Cabinet Approves €174 Billion in New Debt
IMF Upgrades Global Growth Forecast as Weaker Dollar Supports Outlook
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
UN's Top Court Declares Environmental Protection a Legal Obligation Under International Law
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
President Trump Diagnosed with Chronic Venous Insufficiency After Leg Swelling
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
Iranian President Reportedly Injured During Israeli Strike on Secret Facility
Kurdistan Workers Party Takes Symbolic Step Towards Peace in Northern Iraq
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
AI Raises Alarms Over Long-Term Job Security
Russia Formally Recognizes Taliban Government in Afghanistan
Saudi Arabia Maintains Ties with Iran Despite Israel Conflict
Mediators Edge Closer to Israel-Hamas Ceasefire Agreement
Germany Seeks Taliban Deal to Deport Afghan Migrants
Emirates Airline Expands Market Share with New $20 Million Campaign
Robots Compete in Football Tournament in China Amid Injuries
×