Credit Suisse is bracing for a tough couple of days in Geneva, where a former banker is standing trial for embezzlement. The claimants are rich Eastern European clients eager to retrieve assets they kept at the Swiss banking giant.
The trial starts on Monday and is slated to last for almost two weeks. The accused, a 54-year-old French citizen and former private banker of Credit Suisse stands accused of fraud, forgery of document and corporate fraud.
The charges levied by Geneva attorney general Yves Bertossa accuse the Frenchman of acting to the detriment of rich sastern European clients at Switzerland’s second-largest bank. They claim damages totaling more than 100 million Swiss francs.
Who's to Blame
Six claimants will testify against the former banker, including Bidzina Ivanishvili, the billionaire and former prime minister of Georgia. Another claimant is former Russian senator Vitaly Malkin, according to a report by «AWP» (paywall).
Even though Bertossa has focused his investigation on the private banker, the whole affair is very much about Credit Suisse itself. The claimants know that they won’t be able to retrieve their money from the accused – which will move the spotlight back on the banking giant.
The claimants lawyers hope that the verdict against the banker will help them claim their money back from the bank, «Bloomberg» said. They say that the bank ought to have stopped the banker from embezzling the money, and that it failed in its due diligence obligations.
Pointing of Fingers
The former banker used the asset entrusted to him for speculative trading, and took asset from other eastern European clients to cover for the book losses incurred. His lawyer says that the banker admits 99.9 percent of the charges and has cooperated with authorities.
The Frenchman himself pointed an accusing finger at Credit Suisse, claiming the bank made a fatal error and set the ball moving. His lawyer told «Bloomberg» that Ivanishvili had wanted to invest $600 million in equities in 2009 to profit from the impending stock market rally. However, according to the claim by the banker, the Singapore branch failed to execute the order, forcing the defendant to make fictitious transactions to cover up.
A Nervous Start to 2018
The wealthy clients are not happy about Genevan authorities handling of their claims either: some 100 million francs in assets and a villa on the French Riviera were frozen.
The bank repeatedly said it fully cooperated with the Geneva authorities. Credit Suisse said that its former relationship manager had violated internal regulation and Swiss law to deceive the control systems of the bank. The case has roiled the bank, and even CEO Tidjane Thiam has been forced to address it.
In the end, it will be down to the judge to decide whether the claimants will be able to place their demands with the bank. Thus the trial is as much about the banker’s offenses as about potential compensation claims against the bank.
