360° Coverage : Credit Suisse Under Fire From Senate For Aiding Tax Evaders

2 Updates

Credit Suisse Under Fire From Senate For Aiding Tax Evaders

Feb 27 2014, 1:13pm CST | by

The tax evasion charges against Credit Suisse were escalated considerably this week, with the Senate cracking the whip on the Swiss bank for its role in helping U.S. citizens evade taxes. U.S....

Filed under: news

 
 
 

29 weeks ago

Credit Suisse Under Fire From Senate For Aiding Tax Evaders

Feb 27 2014, 1:13pm CST | by

The tax evasion charges against Credit Suisse were escalated considerably this week, with the Senate cracking the whip on the Swiss bank for its role in helping U.S. citizens evade taxes. U.S. regulators have been investigating a number of Swiss banks over tax-evasion charges for well over a year now, and Credit Suisse figured at the top of the list due to its sizable presence in the country. Top executives at Credit Suisse admitted in the Senate hearing that a group of bankers had indeed been found guilty of advising U.S. clients on ways to evade taxes, but that senior officials had no knowledge of these wrong-doings. The bank also reiterated its inability to hand over the details of the 20,000 bank accounts that the Department of Justice (DoJ) has been demanding for a while now, stating Swiss secrecy laws that prohibit the bank from disclosing account information.

The bank settled a related matter with the SEC last Friday for $196 million. Considering the fact that its competitor UBS settled tax evasion charges with the U.S. in 2009 for $780 million, we expect Credit Suisse to shell out roughly a billion dollars over the coming months and share details of thousands of accounts with the DoJ to put this contentious issue behind it.

See our complete analysis of Credit Suisse | UBS

The Swiss banking system has thrived for decades on the back of the secrecy privileges it provides account holders, allowing it to amass the $2 trillion in offshore assets it boasts today. And while the Swiss government’s unyielding support of privacy in its banking system has been the target of scorn from governments across the globe for decades, extreme pressure from the likes of the U.S., U.K., Germany and France since the 2008 recession has forced the Swiss government to relent and agree to various tax agreements with some of these countries (see UBS and Credit Suisse Will Take Lumps from Swiss-British Tax Agreement)

The U.S. DoJ in particular has been ardent in pursuing the Swiss banks for assisting U.S. citizens, starting with the crackdown of UBS in 2009. UBS ended up paying a $780 million fine and also handed over details of nearly 4,500 secret accounts to the U.S. The DoJ then shifted its focus to other Swiss banks and demanded that they furnish information about all U.S. clients holding accounts worth at least $50,000 over the last 10 years – something that the Swiss government partially agreed to last September (see The Swiss-U.S. Tax Accord Is Both Good And Bad News For Credit Suisse).

But things got more serious after a Senate subcommittee released its U.S. Offshore Tax Evasion report this Tuesday, which specifically detailed malpractices by Credit Suisse employees to earn more business. The report triggered a Senate hearing, with the DoJ also drawing flak for not exploring readily available options like serving the bank a subpoena to get the account details and reaching a conclusion on the long-drawn dispute quickly.

The increased visibility of the tax evasion charges against Credit Suisse following the hearing is bad news for the bank, as it is now under considerably higher pressure to settle, and may have to cough up more to reach an agreement with the DoJ. It should be noted that Credit Suisse no longer offers offshore accounts to U.S. clients, so the issue does not impact future growth in the bank’s Swiss assets under management. However, the expected settlement figure will dent operating margins for the bank’s wealth management unit in the quarter in which it is reached. The impact of this on the bank’s share value can be understood by making changes to the chart below.

See More at Trefis | View Interactive Bernstein Research (Powered by Trefis)

Like our charts? Embed them in your own posts using the Trefis WordPress Plugin.

Source: Forbes Business

 
Update
2

3 weeks ago

Khazanah throws MAS RM6b lifeline

Aug 29 2014 5:01pm CDT | Source: Business Times Singapore

August 30, 2014 1:15 AMKHAZANAH Nasional will inject RM6 billion (SS$2.4 billion) over three years to resuscitate loss-making Malaysia Airlines (MAS) under a recovery plan that includes even an Act of Parliament. Other key moves are migrating its operations, assets and liabilities to a new company (N ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 
Update
1

3 weeks ago

MAS posts loss of RM307m for Q2

Aug 28 2014 5:00pm CDT | Source: Business Times Singapore

August 29, 2014 1:13 AMMALAYSIA Airlines (MAS) registered a loss of RM307 million (S$122 million) for the second quarter to end-June, but warned of worse to come in the second half when the "full financial impact of th ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Pakistanis prominent winners at UK's Asian achievers awards
London, Sep 19 (IANS/RAY) Persons of Pakistani-origin emerged as prominent winners at the 2014 Asian Achievers Awards in Britain Friday while Sir Tejinder Singh Virjee, a professor of physics at Imperial College, London, headed the list of Indian-origin recipients.
 
 
Sierra Leone launches 'stay at home' drive to fight Ebola
Freetown, Sep 19 (IANS) Sierra Leone started a three-day "stay at home" campaign to raise awareness about the Ebola virus that has killed close to 500 people in the West African country.
 
 
Kenya to have security, health centre with EU's $65 help
Nairobi, Sep 19 (IANS) The European Union Friday said it will provide 65 million dollars to build a new regional security and health center in Kenya.
 
 
Pakistan says it values China's support for SCO membership
Islamabad, Sep 20 (IANS) Pakistan Friday said it appreciates China's support for the country's quest to become member of the Shanghai Cooperation Organization (SCO) as the group has agreed to expand its membership.
 
 
 

Latest from the Network

Gemma Ward makes modelling comeback
Los Angeles, Sep 20 (IANS) Australian model-turned-actress Gemma Ward made her modelling comeback at the Milan Fashion Week after seven-year hiatus. The 26-year-old took to the catwalk for Prada's spring-summer 2015...
Read more on Celebrity Balla
 
Pakistanis prominent winners at UK's Asian achievers awards
London, Sep 19 (IANS/RAY) Persons of Pakistani-origin emerged as prominent winners at the 2014 Asian Achievers Awards in Britain Friday while Sir Tejinder Singh Virjee, a professor of physics at Imperial College,...
Read more on Celebrity Balla
 
Sierra Leone launches 'stay at home' drive to fight Ebola
Freetown, Sep 19 (IANS) Sierra Leone started a three-day "stay at home" campaign to raise awareness about the Ebola virus that has killed close to 500 people in the West African country. Declaring the campaign last...
Read more on Business Balla
 
Slovakia hails referendum's result in Scotland
Bratislava, Sep 19 (IANS) Slovakia has welcomed the result of the independence referendum in Scotland, with the Slovak Foreign and European Affairs Ministry announcing Friday it had an interest in a strong UK as a...
Read more on Politics Balla
 
Kenya to have security, health centre with EU's $65 help
Nairobi, Sep 19 (IANS) The European Union Friday said it will provide 65 million dollars to build a new regional security and health center in Kenya. The center, to be located in Nairobi, will be used to prevent and...
Read more on Politics Balla
 
'Ireland enjoys excellent ties with Britain, Scotland'
Dublin, Sep 19 (IANS) Irish Foreign Minister Charlie Flanagan Friday said his country enjoys excellent and ever-improving relations with Britain and Scotland. "The strong bonds and historic links between us all run...
Read more on Politics Balla
 
Chinese vice premier calls for regional agricultural cooperation
Beijing, Sep 19 (IANS) Chinese Vice Premier Wang Yang Friday called for greater agricultural cooperation among the Asia-Pacific Economic Cooperation (APEC) economies in the wake of food security challenge. Speaking at...
Read more on Politics Balla
 
Russian PM hails economic shift to Asia-Pacific region
Moscow, Sep 19 (IANS) Russia's shift of its economic development strategy onto the Asian-Pacific region is a "natural response" to the development of global affairs, Russian Prime Minister Dmitry Medvedev said Friday...
Read more on Politics Balla
 
Museum on human rights opens in Canada
Toronto, Sep 20 (IANS) Governor General of Canada David Johnston inaugurate the Canadian Museum for Human Rights in Winnipeg, Manitoba in central Canada Friday. The Museum can play a vital role in helping to engage in...
Read more on Politics Balla
 
Alba learnt beauty tricks from grandma
Los Angeles, Sep 20 (IANS) Actress Jessica Alba says she learnt a lot of her beauty tricks from her grandmother. The 33-year-old informs that living with her Latin grandmother, as well as her mother, as a child meant...
Read more on Celebrity Balla