Credit Suisse Reverses 2022 Money Laundering Verdict in Swiss Court Decision

Court decision overturns Credit Suisse’s conviction, reshaping the bank’s legacy and UBS’s future.

At a Glance

  • Credit Suisse’s 2022 money laundering conviction is overturned by a Swiss appellate court.
  • The reversal stems from the death of a key ex-employee involved in the case.
  • Previous compensations and fines against Credit Suisse are canceled.
  • UBS is under investigation for potential sanctions violations affecting Russian clients.

Credit Suisse’s Overturned Conviction

Credit Suisse has overcome a significant legal challenge as a Swiss appellate court overturned its 2022 money laundering conviction. This decision follows the court’s determination that further examination of the case could undermine legal principles, especially considering the death of a crucial employee who played a central role in the accusations.

The conviction involved allegations concerning Credit Suisse’s dealings with profits from cocaine distribution. Initially, Credit Suisse was penalized with a 19 million Swiss franc fine for failing to prevent money laundering activities from 2004 to 2008. “In view of A.’s death, it was not possible to examine the bank’s alleged breach” of regulations without violating the presumption of innocence of the deceased, the Swiss Appeals court noted.

UBS’s Inheritance and Legal Challenges

UBS, which absorbed Credit Suisse amid these legal proceedings, “welcomes the court’s decision to acquit the bank in connection with a legacy matter related to Credit Suisse,” it said in a statement. The acquisition means UBS inherits both the assets and the unresolved legal risks linked to Credit Suisse, including ongoing investigations by the U.S. Office of Foreign Assets Control (OFAC) concerning potential sanctions violations tied to Russian clients.

Swiss regulators are scrutinizing UBS’s handling of Credit Suisse clients, especially regarding anti-money laundering protocols due to concerns of high-risk accounts. Additionally, UBS faces increased scrutiny over allegations connected to Russian customers that became its responsibility following Credit Suisse’s collapse and subsequent acquisition by UBS in March 2023. Handling funds tied to Russia poses significant risks due to sanctions following Russia’s actions in Ukraine.

Future Implications for UBS

The Swiss court’s ruling doesn’t erase the other legal and regulatory challenges UBS faces as it seeks to integrate Credit Suisse. UBS’s attempt to pause ongoing money laundering charges related to the Bulgarian mafia was recently denied by the Swiss Federal Criminal Court, according to the SDA news agency.

As UBS moves forward, the focus will likely remain on resolving these legacy matters while maintaining regulatory compliance, experts say.

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