Swiss Federal Prosecutor opens an investigation into Credit Suisse

Switzerland’s Federal Prosecutor announced on Sunday 2 April that it has opened an investigation into the state-backed takeover of Credit Suisse by UBS Group. The prosecutor is looking into potential breaches of the country’s criminal law by government officials, regulators and executives at UBS & Credit Suisse.

There were “numerous aspects of events around Credit Suisse” that warranted investigation and which needed to be analyzed to “identify any criminal offenses that could fall within the competence of the prosecutor the Federal Prosecutor office announced in a statement.

“The Office of the Attorney General wants to proactively fulfill its mandate and responsibility to contribute to a clean Swiss financial center and has set up a monitoring system so that it can take action immediately on any issues that fall within its area of responsibility,” Federal Prosecutor office added.

Federal Prosecutor office gave no indication of any specific aspects of the merger agreement it might look into or how long the investigation might last.

Mark Pieth, professor emeritus of the University of Basel said, “It’s astonishing that the prosecutor would comment, but this situation so out of the ordinary that they had to say something.”

It is surmised that the prosecutor could be probing breaches of secrecy provisions by officials, or the trading on inside information, adding that the wiping out of some bondholders as planned under the deal is also problematic.

The Swiss Shareholders Association, Ethos and other small shareholder rights associations have been saying for years that to protect the Swiss Economy, an independent regulatory group is required in order to ensure greater governance, or as the Office of the Attorney General says “proactively fulfill its mandate and responsibility to contribute to a clean Swiss financial center and has set up a monitoring system”.
https://www.suishare.com/21st-century-governance/

We recommend that the Office of the Attorney also take a close look at the Bank Ombudsman, and the roles they perform in the causality of the current crisis.

The US Senate still has Credit Suisse on the hook for continued help to ultra-wealthy Americans on evading US taxes. Hearings in Washington continue.

The Swiss public and politicians are concerned about the level of state support, with nearly 260 billion Swiss francs in liquidity and guarantees offered by the government and Swiss National Bank.

Half of Swiss economists think the takeover of Credit Suisse was not the best solution. They warned that the situation had dented Switzerland’s reputation as a banking center.

It is surmised that over 30% of Credit Suisse staff could lose their jobs due to the takeover.  Only?

Perhaps UBS would be well counselled to take the Credit Suisse customers, take over the Credit Suisse assets, but keep in mind the definition of Einstein regarding insanity. To paraphrase it with Credit Suisse in mind: continuing to perform bank processes with the people responsible for the current disaster……

UBS should be wary of poisoning their own well.