Credit Suisse Banker Case Said to Widen With 3 New Suspects

  • All suspects are former employees of Zurich-based bank
  • Fourth criminal complaint filed against original banker

Geneva prosecutors are widening their probe into Credit Suisse Group AG and one of its ex-wealth managers, identifying another three former employees as suspects in a case looking into unauthorized trades on the accounts of rich eastern Europeans, according to two people familiar with the investigation.

The trio have been summoned for questioning later this month by the Geneva prosecutor’s office on suspicion of money laundering, according to the people, who asked not to be identified because the investigation is ongoing. The men, along with the ex-banker at the heart of the case, can’t be named because of Swiss rules covering identification of suspects in criminal cases.

Prosecutors and Credit Suisse clients are looking at records from the trading of the ex-wealth manager, who admitted to the bank last year that he carried out trades without knowledge of customers including billionaire and former Georgian prime minister Bidzina Ivanishvili.

Credit Suisse is seeking to restore investor confidence as it accelerates a restructuring after unrelated losses on trading positions at its investment bank caught management unaware. Its stock fell 1.3 percent Friday in Zurich, bringing its decline this year to 38 percent.

New Suspects

The new suspects include a colleague of the banker until his departure in 2008, while the two others worked for Credit Suisse in the 1990s and then separately became business partners of the wealth manager. A new criminal complaint, the fourth against the French main suspect, has been filed by a Russian company for fraud. He’s in a Geneva prison, charged with fraud and criminal mismanagement.

A lawyer for one of the suspects said “he is not a central figure and knew nothing of his illegal activities or clients.” A spokesman for the Geneva prosecutor’s office declined to comment.

Anna Sexton, a spokeswoman for Credit Suisse, declined to comment. One man didn’t want to comment, a receptionist at his office said. An attorney for the other didn’t immediately return calls seeking comment. 

New Focus

The widening scandal comes at a bad time for Credit Suisse, which is trying to appease shareholders. Chief Executive Officer Tidjane Thiam told investors at the bank’s annual meeting in Zurich last week that restructuring efforts will continue to weigh on the bank’s performance this year.

Credit Suisse said in March that the banker, who worked in Moscow but was based in Geneva at the time of his January arrest, was a lone wolf who “concealed his deceptions from colleagues and that this is to the best of its knowledge an individual case.” The clients who’ve brought a case against him -- Ivanishvili and two Russians -- disagree.

“This type of management, catastrophic and leading inevitably to enormous losses for its clients, could not have been achieved without the help of multiple departments at the core of the bank, as well as by the participation, active or passive, or at least with the full knowledge, of numerous people,” Ivanishvili’s lawyers wrote in a filing with prosecutors on Jan. 27. 

They went one step further in March, accusing Credit Suisse of money laundering for failing to put adequate procedures in place to prevent the cleaning of dirty money. The Zurich-based bank said it is cooperating with prosecutors and put the blame on its former employee.

Top Matrix Holding Ltd., an investment vehicle owned by former Russian senator Vitaly Malkin, in March filed the fourth complaint against the banker for criminal mismanagement, abuse of confidence and fraud. A lawyer for Malkin, a former business associate of Ivanishvili, didn’t have an immediate comment. The jailed banker’s attorney didn’t immediately return a message seeking comment. 

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