The Key Players in Trial of Ex-Credit Suisse ‘Star’ BankerBy
A former top Credit Suisse wealth manager was found guilty of defrauding his eastern European clients by a Swiss court on Friday and sentenced to five years in prison. Here’s what you should know about Patrice Lescaudron, as well as the prosecutor who led a two-year investigation into his crimes, the trial judge and his principal accusers.
Former wealth manager
Usually dressed in jeans and a faded dark top, Lescaudron reacted with little emotion during hours of testimony from his clients and colleagues, often staring straight ahead from his seat in the front row. Lescaudron had more than a decade’s experience working in the perfume and retailing industries but none in banking before joining Credit Suisse in 2004.
The perception he was out of his depth was something lawyers for his victims seized upon during the trial, accusing the bank of naivety in allowing someone to take over the accounts of some of their largest Russian clients just because he spent a few years in Moscow.
The “gnawing fear” that his mistakes would be discovered and two years in pretrial detention led Lescaudron to seek treatment for hypertension and then depression.
“I’ve thought a lot about what has happened since 2007.”
Ivanishvili, 61, is the former prime minister of Georgia. He made his $5.9 billion fortune in post-Soviet Russia in the 1990s before offloading the majority of his steel plants, banks and property assets between 2003 and 2006.
Ivanishvili, who lives in a glass-and-steel $45 million estate on the Black Sea coast, was Lescaudron’s biggest client and biggest victim. After Ivanishvili’s order to sell $600 million worth of bonds and buy equities in 2009 went unfulfilled, missing out on a major stock rally, Lescaudron began sending his Georgian client fake statements to cover up the missed opportunity.
Ivanishvili was summoned to testify at the trial but couldn’t because of medical treatment, his lawyer said.
Malkin, a former Russian senator, co-founded Rossiyskiy Kredit Bank with Ivanishvili in the early 1990s. By 2006, both men’s money was being managed by Lescaudron. Malkin lost at least 15 million Swiss francs ($15.6 million) on investments in Austrian property developer Meinl European Land Ltd., according to his lawyer, Christian Luescher. His overall losses were “a lot higher.”
Malkin, 65, told the court he was angry he hadn’t received even so much as an apology from Credit Suisse, a bank he thought of as “God.”
“I had no doubts about the activities of Credit Suisse until 2015,” he said. “I was mistaken.”
The Russian businesswoman made her fortune in her country’s soft-drinks market. Kurbatova’s lawyer said she lost $53 million as a result of Lescaudron’s deception. Her former husband, Yuri Sokolov, is a separate plaintiff in the case.
Sergei Egorov and Zurab Lysov
A pair of Russian oil and gas executives who together lost more than $30 million according to their lawyer, on unauthorized bets on stocks including Meinl. Egorov owns a $33 million villa on the French Riviera, which has been sequestered until the court can untangle whose money paid for the property.
Bertossa, 43, has jurisprudence in his blood as the son of Geneva’s former attorney-general. He became a Geneva magistrate at 32 and is known for his plain-spoken manner and pragmatism with high-profile financial crime cases.
He wrapped up his investigation last year into corruption at Addax Petroleum, a Swiss trading arm of China’s Sinopec in less than five months. He ordered Addax to pay $32 million in damages but took no further action against executives who’d been detained. Bertossa also led a 2015 probe into allegations of money laundering at HSBC Holdings Plc’s Swiss private banking unit which ended with the bank agreeing to pay a penalty of $43 million.
During the Lescaudron trial, Bertossa expressed little patience for what the clients might have lost given their original fortunes. Nor did he share much sympathy for Lescaudron’s plight and recommended that he be sentenced to five years in prison.
“Mr. Lescaudron, you had one responsibility: to tell your clients when you incurred losses,” he excoriated the Frenchman at one point in the trial. “You failed.”
Banna, 43, kept tight control of the courtroom over the two-week trial, calling for an impromptu recess on at least one occasion to rein in what she thought was grandstanding by a lawyer for one of the plaintiffs.
In 2015, before the Lescaudron trial, Banna cleared a Geneva financier of charges related to the management of a feeder fund that streamed clients’ money to Bernard Madoff. That verdict foiled a six-year effort by Geneva prosecutors to punish local investment managers with ties to the American con man.