Markus Diethelm has to prove himself by deflecting the continued charges the bank faces from Georgia's former head of state.
Starting Monday, Credit Suisse faces a three-week trial in the Singapore courts that could end up having it cough up several hundred million more dollars in a case that has already cost it plenty.
On the sides of the plaintiffs, former Georgian prime minister Bidzina Ivanishvili and his family. They are asking for additional damages of about $800 million related to a wide-ranging fraud case related to Credit Suisse Life (Bermuda) centering around former private banker Patrice Lescaudron.
The trial will be a crucial first test for the 65-year-old general counsel Markus Diethelm after his inscrutable predecessor Romeo Cerutti lost the trust of major shareholders when questions were raised relating to his defense of the charges in the case.
Large Sums
To wit, a Bermuda court already ruled in March against the bank and in favor of Ivanishvili, stating it had turned a «blind eye» by not taking adequate action to prevent Lescaudron’s fraud. In June, as finews.com reported, the size of the settlement was revealed to be $607 million. At the time, Credit Suisse indicated it would appeal the verdict.
Lescaudron was the integral player in the scheme. He faked signatures and created dummy portfolio statements to illegally transfer millions of dollars, mainly from Ivanishvili, to cover losses in other client portfolios. He was convicted in 2018 for fraud and forgery but released from prison early – only to commit suicide in 2020.
Further Appeals
If Credit Suisse loses in Singapore, it intends to appeal the case, according to «Reuters». The news service also indicated the bank doesn't intend to settle the matter out of court.
If both the Bermudan and Singaporean entities of Credit Suisse end up being convicted, efforts would have to be made to find out exactly what payments were made from each given that damages can only be paid out once.
Switzerland's second-largest bank also faces legal steps in its own country related to the case. There is currently a criminal investigation underway by the Geneva district attorney, and the Georgian could file charges in Switzerland against the bank.
Risk Culture
Credit Suisse has dug deeply into its pockets for its legal mishaps in recent years. In the first half of 2022 alone, it booked legal provisions of about $1.1 billion.
It would almost be a form of redemption if the bank could extricate itself from its past missteps. In parallel, however, it needs to drastically overhaul its risk culture.
