Credit Suisse Pleads Guilty, Pays $2.6 b
Credit Suisse has done what no other bank of its size and significance has done in over two decades: plead guilty to criminal wrongdoing. In a sign that banking giants are no longer immune from criminal charges, despite concerns that financial institutions have grown so large and interconnected that they are too big to jail, US federal prosecutors demanded that Credit Suisse’s parent company plead guilty to helping thousands of American account holders hide their wealth. As part of a deal, the Swiss bank met the demands, agreeing to one count of conspiring to aid tax evasion in a scheme that “spanned decades.” Credit Suisse, which has a giant investment bank in New York and whose CEO, Brady W Dougan, is an American, will also pay $2.6 billion in penalties and hire an independent monitor for up to two years. The rebuke from federal prosecutors as well as from the Federal Reserve and New York’s state banking regulator, Benjamin M Lawsky, is intended as a blow against overseas tax dodging and the shadowy world of Swiss bank secrecy. The deal also signals a shift in prosecutors’ tactics. It is the most prominent bank to plead guilty in the US since Drexel Burnham Lambert in 1989, and the largest to do so since the Bankers Trust in 1999, a bank a fraction the size of Credit Suisse. For Credit Suisse, other than the fines and the reputational stain of being a felon, the implications are likely to be limited. The bank may lose some clients but is otherwise expected to survive largely unscathed. The plea deal also enables it to move beyond a case that had prompted a congressional hearing and had thrust the bank into an international squabble over tax dodging. If the bank had continued to fight the case, it would have been indicted.