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

 
 
 

33 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

7 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 (NewCo) and slashing the workforce ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 
Update
1

7 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 the double tragedies of MH370 and MH17" hits h ...
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

EU strengthens sanctions against Syria
Brussels, Oct 21 (IANS) The European Union (EU) Monday announced it was strengthening sanctions against Syria.
 
 
Lufthansa pilots' strike causes 1,500 flight cancellations
Berlin, Oct 21 (IANS) German airline Lufthansa cancelled over 1,500 flights Monday after its pilots union announced to extend the 35-hour strike to include long-haul fleets.
 
 
Norwegian doctor recovers from Ebola infection, discharged
Oslo, Oct 21 (IANS) A Norwegian doctor, who was infected with the Ebola virus in Sierra Leone, has been discharged from hospital after recovery from the deadly disease, doctors at Oslo's Ulleval hospital said.
 
 
'Lebanon at a high risk for Ebola'
Beirut, Oct 21 (IANS) Lebanon is at a high risk of being affected by deadly Ebola virus, which has ravaged parts of West Africa and prompted a worldwide health scare, the country's health minister said Monday.
 
 
 

Latest from the Network

1,074 new dengue cases in Chinese province
Beijing, Oct 18 (IANS) China's Guangdong province has reported 1,047 new cases of dengue fever, health authorities said Saturday. Six people have already died in Guangdong -- five in Guangzhou and one in adjacent...
Read more on Business Balla
 
Blake Lively 'always' wanted to be mum
Blake Lively has ''always'' wanted to be a mother. The 27-year-old actress is expecting her first child with husband Ryan Reynolds and she admits she's been dreaming of this moment since she was a youngster. Speaking...
Read more on Celebrity Balla
 
Kris Jenner 'torn apart' by Bruce's new relationship
Kris Jenner feels ''torn apart and angry'' that Bruce Jenner is dating her former assistant. The 58-year-old matriarch split from the 64-year-old Olympic gold medalist last October following 22-years of marriage but is...
Read more on Celebrity Balla
 
Cheryl Fernandez-Versini won't move to France
Cheryl Fernandez-Versini doesn't want to move to her husband's home country of France. The 'X Factor' judge, 31, who comes from Newcastle, is adamant she won't be relocating any time soon to suit her new spouse Jean-...
Read more on Celebrity Balla
 
Lance Bass sets wedding date
Lance Bass has set a date for his wedding. The former *NSYNC singer and his partner Michael Turchin, who have been dating for two-and-a-half years, are to tie the knot on December 20, 2014, a representative for the...
Read more on Celebrity Balla
 
Nepal avalanche toll reaches 39
Kathmandu, Oct 18 (IANS) At least 39 climbers died while hiking on a key Nepali route after it was hit by a major snowstorm and avalanches earlier this week, BBC reported Saturday citing officials. Over 350 stranded...
Read more on Politics Balla
 
Jake Gyllenhaal says society is complicit in 'nightcrawling'
Jake Gyllenhaal says almost everybody in society ought to relate to his new movie 'Nightcrawlers'. The eagerly-awaited film concerns those people who monitor police scanners and then race to crime scenes to film eye-...
Read more on Movie Balla
 
India eves look for first win in AFC U-16 qualifiers
Dhaka, Oct 18 (IANS) India will hope to register their first win of the 2015 Asian Football Confederation (AFC) Under-16 Women's Championship qualifiers when they take on hosts Bangladesh in a crucial encounter at the...
Read more on Sport Balla
 
Moyes mulling return to management
London, Oct 18 (IANS) Former Manchester United manager David Moyes said that he is ready to revive his managerial career six months after being sacked by the 'Red Devils'. "I am ready to return. I have enjoyed the...
Read more on Sport Balla
 
Ebola fears loom over Ghana hosting AFCON
Accra (Ghana), Oct 18 (IANS) The Ghana Medical Association (GMA) cautioned the government Saturday against hosting the 2015 African Cup of Nations (AFCON), despite a request by the Confederation of African Football (...
Read more on Sport Balla