Financial News

  • 21 May 2014, 7:08

Credit Suisse Fined $2.6bn Over Tax Dodgers

Credit Suisse has agreed to pay a $2.6bn (1.5bn) fine imposed by the US government, after it helped wealthy Americans evade taxes.

The Swiss giant became the largest bank in two decades to plead guilty to a US criminal charge.

Despite paying the massive fine, the bank's management was allowed to stay in place and the New York state regulator said it would not revoke its permit to operate.

Prosecutors said it helped clients allegedly deceive US tax authorities by hiding assets in illegal, undeclared accounts.

Authorities said it was a conspiracy that spanned decades, and in one case began more than a century ago.

US attorney general Eric Holder said: "This case shows that no financial institution, no matter its size or global reach, is above the law."

Assistant attorney general for the tax division Kathryn Keneally added: "We also appreciate that Switzerland has taken important steps to ensure that its banking community will no longer be a haven for US tax evasion."

American officials have pushed for higher penalties in the wake of the global financial crisis, and since January's enactment of the strict Foreign Account Tax Compliance Act.

Credit Suisse, Switzerland's second largest bank, will pay a large financial penalty to the Department of Justice, along with smaller sums to the Internal Revenue Service, the Federal Reserve and New York's banking regulator, the Department of Financial Services.

It had already paid just under $200m (120m) to the Securities and Exchange Commission.

Credit Suisse Chief Executive Brady Dougan said: "We deeply regret the past misconduct that led to this settlement."

"We have seen no material impact on our business resulting from the heightened public attention on this issue in the past several weeks."

Neither Mr Dougan nor chairman Urs Rohner were found to be personally guilty of misconduct.

The bank's fine is around three times the $780m paid by rival UBS in 2009.

Part of the agreement means that nine staff members can no longer be employed by the bank, including its head of offshore banking for North America.

The penalty has caused a political furore in Switzerland, amid questions about the future of senior management of the bank and bonus clawback possibilities.

The country's finance minister said her government was satisfied with the US deal that allowed to put the criminal investigation behind it - but admitted other banks remain in the American crosshairs.

Eveline Widmer-Schlumpf said banks including regional lenders remain in talks to resolve charges of misconduct, as part of the US crackdown on foreign banks suspected of helping American tax cheats.

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