According to recent reports, the U.S. Department of Justice is investigating whether or not financial professionals at premier institutions assisted Russian oligarchs in evading sanctions imposed by the country. Two of the banks that are reportedly being investigated are Credit Suisse Group AG and UBS Group AG.
U.S. DOJ Investigates Credit Suisse & UBS
A report by Bloomberg states that a recent round of U.S. government subpoenas included these selected Swiss banks. Prior to the crisis that shook the 166-year-old bank which ultimately led to UBS’s proposed acquisition of its competitor — the information requests were sent out. In addition, people familiar with the investigations claimed that subpoenas were sent to staff of several large institutions in the United States as well.
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As per information obtained, the inquiries currently being conducted by the Justice Department are centered on determining which bank personnel interacted with “sanctioned clients” and how these clients in question were screened over the course of the past several years. Following that, more investigations may be conducted into those bankers and advisers to figure out if they broke any sanction laws.
Credit Suisse Catered Russian Clients?
Credit Suisse had a well-established reputation for serving affluent Russians before the Russian invasion of Ukraine led to further sanctions. The Swiss bank earned between $500 million and $600 million in annual revenue from its Russian customers while the bank was at the height of its success; managing close to $60 billion in assets for Russian customers.
Credit Suisse held over $33 billion for individual Russian clients when it opted to cease doing business with them in May of last year. This was approximately 50% more than UBS, albeit the firm having a larger wealth management division.
In the event that U.S. sanctions are violated by banks, severe fines may be imposed. After entering a guilty plea in 2014 to U.S. charges for conducting transactions with sanctioned Sudanese, Iranian, and Cuban companies, the Paris-headquartered BNP Paribas agreed to pay roughly $9 billion as part of the settlement.
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