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article imageGiant Swiss bank to plead guilty to U.S. criminal charges

By Nathan Salant     May 19, 2014 in Business
Washington - Worldwide banking giant Credit Suisse Group is expected to plead guilty Monday to criminal charges connected to efforts to enable high-income Americans avoid U.S. taxes.
Under a plea agreement with U.S. and New York State authorities, the bank is expected to pay $2.5 billion in penalties, according to the Reuters news service.
Announcement of the deal is expected after markets close on Monday, Reuters said.
The deal is said to be especially significant because it is the first time a bank's parent company has pleaded guilty to criminal charges for the past 10 years, the USA Today newspaper reported.
Regulators have been hesitant to charge financial institutions with crimes because that could force them out of business, as what happened with Drexel Burnham Lambert in 1990 and accounting giant Arthur Anderson in 2002.
Credit Suisse was said to have agreed to pay $2.5 billion because a larger fine would have damaged its credit rating, Reuters said.
Credit Suisse, the U.S. Federal Reserve and the N.Y. Department of Finance declined to comment, and the U.S. Department of Justice was not available for comment, Reuters said.
Credit Suisse had been negotiating with the four agencies, Reuters said.
The Wall Street Journal newspaper reported Monday that Credit Suisse CEO Brady Dougan and Chairman Urs Rohner would keep their positions under the settlement.
Money from the settlement will be allocated between the U.S. government and New York, with the United States expected to get close to 2 billion of the expected fine, Reuters said.
But the fine could detrimentally affect Credit Suisse in other ways, since many pension and mutual funds are not permitted to invest in institutions with criminal records, and other potential clients could shy away, the Journal said.
"If you're a customer and you have a choice between a bank that has a reputational hit versus one that doesn't, you might decide to go with the one that doesn't," Andrea Bonime-Blanc of GEC Risk Advisory told the Journal.
More about Credit Suisse, New york, US, Tax evasion, Washington
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