10 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....

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21 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)

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Source: Forbes Business

 
Update
10

7 weeks ago

RM47mil KWSG contributions still unclaimed

Jun 9 2014 7:54am CDT | Source: Business Times Malaysia

KUALA LUMPUR: About RM47 million of contributions in the Teachers Provident Fund (KWSG) still remain unclaimed, the Dewan ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
9

7 weeks ago

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Jun 9 2014 3:50am CDT | Source: Business Times Malaysia

KANGAR: A gold shop owner lost almost RM1 million after after the safe on in his shop was broken in ...
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Update
8

7 weeks ago

Motion to debate MAS losses in Dewan Rakyat rejected

Jun 9 2014 3:39am CDT | Source: Business Times Malaysia

KUALA LUMPUR: AN emergency motion to debate the losses incurred by Malaysia Airlines last year, amounting to RM1.2 billion was rejected by the Dewan Rakyat toda ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
7

7 weeks ago

MH370 Tragedy: Hisham: RM27.6 mil spent on 1st phase of SAR

Jun 9 2014 2:11am CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia spent some RM27.6 million in its first phase of the search operations for missing Malaysia Airline flight MH370, said Acting Transport Minister, Datuk Seri Hishammuddin Hussei ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
6

7 weeks ago

9.1m litres of diesel seized in a month

Jun 8 2014 1:11am CDT | Source: Business Times Malaysia

PUTRAJAYA: The Domestic Trade, Cooperatives, and Consumerism ministry has seized some 9.1 million litres of diesel and property worth RM58 million since mounting ‘Operasi Diesel Selat ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
5

7 weeks ago

Girl, 9, awarded RM2.78m compensation for medical negligence

Jun 6 2014 4:56am CDT | Source: Business Times Malaysia

KUALA LUMPUR: A nine-year-old girl who suffered brain damage during her birth at a government hospital was awarded over RM2.78 million in compensat ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
4

7 weeks ago

Malaysia's total trade in April up 12pc

Jun 5 2014 11:52pm CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia's total trade in April 2014 rose by 12 per cent from a year ago to RM123.86 billion due to growing trading activities, International Trade and Industry Minister Datuk Seri ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
3

7 weeks ago

Works Ministry to spend RM20m for upgrading works at 50 accident black spots

Jun 4 2014 11:35pm CDT | Source: Business Times Malaysia

JOHOR BARU: The Works Ministry will implement upgrading works at 50 accident prone locations in the country that have been identified this year involving an allocation of RM2 ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
2

7 weeks ago

Najib launches loan scheme for Ramadan traders

Jun 4 2014 10:24pm CDT | Source: Business Times Malaysia

PUTRAJAYA: Prime Minister Datuk Seri Najib Razak today launches RM45 million Ramadan Bazaar Scheme 20 ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
1

7 weeks ago

Residents bring up objection against Kidex to Suhakam

Jun 4 2014 4:49am CDT | Source: Business Times Malaysia

PETALING JAYA: A group of 20 Petaling Jaya residents held a meeting with the Human Rights Commission of Malaysia (Suhakam) over their objection against the proposed RM2.2 billion Kinrara Damansara Skyway (Kidex) ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 

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