Plethora of red flags went unheeded by Credit Suisse in tuna-bond scandal

The investment bank insufficiently prioritised its response to the very real threat of financial crime and focussed on individual factors rather than considering the risks in aggregate or holistically. Add to this inadequate staffing, poor systems, along with lack of challenge, and the bank is forfeiting many millions in fines again. Denis O’Connor scrutinises the final notice.

Denis O’Connoris a fellow of both the Institute of Chartered Accountants in England & Wales and the Chartered Institute of Securities and Investment. He was a member of the British Bankers’ Association Money Laundering Committee from 2003-10 and a member of the Joint Money Laundering Steering Group’s board and editorial panel between 2010 and 2016. He has been a frequent speaker at industry conferences on financial crime issues, both in the United Kingdom and abroad.

Credit Suisse’s failure to address properly at least 15 ‘red flags’ over its issuance of bonds worth $1.3 billion for the Republic of Mozambique has led to fines and penalties exceeding $547 million. After an investigation alongside the United States authorities, the Financial Conduct Authority fined Credit Suisse £147 million and the bank wrote off $200m of Mozambique sovereign debt after acknowledging its failings, thus avoiding an increased fine of £210m. [1] The US Department of Justice fined the firm $247m and placed it under “heavy monitoring” for three years following a guilty plea to a wire fraud conspiracy charge and an acknowledgement that it had defrauded investors. [2] The Securities and Exchange Commission also levied a fine of $65m, in addition to $34m in disgorgement and penalties, on the institution for fraudulently misleading investors and breaching the Foreign Corrupt Practices Act [3].