Credit Suisse helped to convict one of its former private bankers over dealings with a billionaire ex-prime minister of Georgia. In a change of heart, the Swiss bank is now a prominent defender of the imprisoned Frenchman.
The 54-year-old Frenchman who went from cosmetics salesman to a lavishly paid eastern European banker is persona non grata at Credit Suisse. The former employee is at the center of one of the biggest scandals at the Swiss bank: he stood trial on charges of fraud, forgery of document and corporate fraud after Bidzina Ivanishvili, an oil magnate and former prime minister of Georgia, accused him of cheating him out of more than 100 million Swiss francs ($100.9 million).
Credit Suisse wasn't officially party to the criminal trial, but views itself as a damaged party: the bank accused its former employee of embezzling 45 million francs in commissions and trading fees. In February, he was convicted of fraud, forgery, and mismanagement and sentenced to five years jail.
Appeal in Geneva
Almost five months later, Credit Suisse is appealling the former private banker's conviction on the mismanagement charge, according to «Bloomberg»: the bank has hired securities law firm Schellenberg Wittmer to overturn the charge, which is tied to the accounts of two well-known individuals.
What's behind Credit Suisse's sudden change of heart? The lawyers for oligarch Ivanishvili think they know: the mismanagement charge would imply that Credit Suisse didn't check up on its staff enough. Each of the banker's criminal convictions opens up a Pandora's box of potential civil suits, as finews.com reported in February.
Damage Claims?
The banker's conviction wasn't surprising – he confessed on his first day in court. The bank is now in the crosshairs of clients damaged by the banker's crimes: his conviction «will be a wonderful starting point for a lot of civil proceedings,» as the lawyer for two claimants said earlier this year. Credit Suisse had maintained that the erstwhile private banker acted alone, and the bank didn't know that he used client money to cover trading losses.
By contrast, the clients claim that Credit Suisse was grossly negligent in entrusting the banker with big Russian and Georgian clients, simply because he had lived in Moscow for several years. The reversal illustrates that despite the banker dismissed to jail, the scandal is all but over for Credit Suisse: the bank is far more attractive than its former employee for civil suits to make claims over potential damages.
