Credit Suisse may face CRIMINAL charges
http://www.bloomberg.com/news/2014-04-30/credit-suisse-bnp-paribas-char…
According to Bloomberg, Credit Suisse may face criminal charges for helping Americans evade taxes, which dates all the way back to 2011. BNP is also mentioned because they performed business with "prohibited countries."
This deviates from the norm where you see these banks settle with U.S. Regulators instead of going to court for criminal charges. If they do settle, this will go into billions and billions of dollars (a la JPM, if not more), and the EU will likely step in and claim the US is playing favorites to US-based banks. Also, according to a former federal prosecutor, criminal charges could close a bank. Damn, could you imagine that?
I guess I see why so many people are not going to banking or leaving. It's no secret that investment banks are losing out to recruiting top-talent to tech companies, tech start-ups, and the buy side that now recruits at top-schools. These regulations are tough, and the penalties are just as inane, but I see why Skip peaced out of BarCap.
Thoughts.....
I don't think this is the main reason people are starting to go into tech/IT and the buy side versus IB. we live in a litigious society, no one industry is immune, but IB gets the most attention because it's the easiest to pick on (most of the media is against "wall street," so you get better ratings by focusing on this instead of Apple trying to sue Samsung out of $2bn).
the CS issue is purely because we've come at a crossroads with swiss bank secrecy laws. the US law is clear that citizens must disclose offshore assets to remain tax compliant, where as the swiss law is clear that you can't release client information without consent (I'm paraphrasing, I'm not an attorney), so who has jurisdiction? the US cannot close a swiss bank, but they can ban them from activity in the US, and since CS or any other foreign bank closing US operations would be a huge shock to the system, my guess is that if this doesn't get dropped altogether, it will set a precedent, but probably without jailtime.
the BNP issue is because of dealings with countries on our OFAC list. all banks & brokerages maintain lists of countries with whom they cannot do business (Iraq) or with whom you can do business if given approval (Cayman Islands), and since BNP is a French bank and OFAC is a strictly US thing, the jurisdiction is confusing. unfortunately, I don't know of any rules on cross-border banking regulations. again, this is not a US bank (even though they have US operations), so in my opinion it's a question of jurisdiction. I will be very curious to see how this all shakes out.
Too bad the US government doesn't face criminal charges for the theft they levy on Americans. Still cannot believe we bullied Switzerland into breaking their sacrosanct banking laws.
What do you guys think will happen to Credit Suisse if found guilty? Would they have to shut-down their investment banking business? Or even if they settle for billions, could that lead to them shutting down as well?
Yep, if you work there might as well start looking for a new gig. Will probably just go ahead and shut down GS too.
Dolores ut ex aliquid praesentium quae. Quisquam magni voluptatibus officia ullam ea facilis. Ratione omnis est optio facilis repudiandae.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...