Credit Suisse shares fall on US investigation report

The investigation is focused on clients in the United States with South American passports who allegedly failed to declare hundreds of millions of dollars to the tax authorities.
The logo of the Swiss bank Credit Suisse, in Zurich, Switzerland. (Photo | AP)
The logo of the Swiss bank Credit Suisse, in Zurich, Switzerland. (Photo | AP)

ZURICH: Credit Suisse shares tumbled again on Wednesday following a report of a US investigation into whether Switzerland's second-biggest bank continued to help clients evade taxes after a 2014 settlement deal.

Just after 0900 GMT, shares were down three percent to 4.25 Swiss francs ($4.02), regaining some ground after losing more than four percent at the start of trading. The fall went against the trend of the Swiss stock exchange's main SMI index, which was up 0.16 percent.

The US Department of Justice is reportedly investigating whether the bank continued to help clients hide assets from the taxman eight years after a settlement with US authorities.

The investigation is focused on clients in the United States with South American passports who allegedly failed to declare hundreds of millions of dollars to the tax authorities, Bloomberg News reported Tuesday, citing sources familiar with the matter.

In 2014, Credit Suisse reached a settlement with the US authorities, paying a $2.6-billion fine after pleading guilty to helping clients prepare garbled returns to evade taxes, in broad investigations targeting Swiss banks.

"Credit Suisse does not tolerate tax evasion," a spokeswoman for the Zurich-based bank told AFP.

"We have implemented extensive enhancements since 2014 to root out individuals who seek to conceal assets from tax authorities. Our clear policy is to close undeclared accounts when identified," she said.

"Credit Suisse is cooperating extensively with US authorities," the spokeswoman added.

But the report only increased the pressure ahead of an October 27 update on how the bank's new management intends to turn around Credit Suisse, which has been shaken by a series of scandals.

It has lost more than 67 percent of its value since the March 2021 bankruptcy of the British financial firm Greensill.

Credit Suisse shares have gone through several recent chaotic spells on the stock market, including at the start of last week.

Prices hit a historic low of 3.158 Swiss francs, with some on social media evoking the possibility of a "Lehman Brothers moment", in reference to the US bank which collapsed, triggering the 2008 financial crisis.

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