US lawmaker investigate whether Credit Suisse is properly enforcing Russian sanctions

Because of Credit Suisse's shady compliance record, US lawmakers have demanded more information about the bank's handling of sanctions against Russian oligarchs.

The move comes just weeks after it was revealed that the bank had asked investors to destroy documents related to its wealthiest clients' assets, further damaging the bank's reputation.

Now, Carolyn Maloney, the chairwoman of the powerful US Congressional Committee on Oversight and Reform, has pressed Suisse CEO Thomas Gottstein to explain why the bank asked investors to destroy documents related to its wealthiest clients' private jets and yachts.

Maloney made the request in a letter to Gottstein earlier today, which was co-signed by committee member Stephen Lynch.

Credit Suisse refused to comment on the letter, referring instead to a previous statement about the investor presentation.

It is the first European bank to be subjected to this level of increased oversight from US lawmakers.

Given the stories that have emerged around the Swiss banking giant in recent weeks, this kind of reputational thrashing and unintended oversight was probably unavoidable.

The Swiss lender was heavily featured in the "Credit Suisse Secrets" data dump last month over a slew of shady dealings with autocrats and organized gangsters.

"No data, client-related or otherwise, has been erased within Credit Suisse and, for clarity, this is in no way linked to the recent implementation of additional sanctions — with which we are fully compliant," according to the statement.

According to the Financial Times, the request to destroy data was made to prevent information about a Credit Suisse division that made loans to oligarchs who were later sanctioned from leaking.

The Financial Times story, according to Maloney's letter, "raises significant concerns about Credit Suisse's compliance" with US and allied sanctions imposed in response to Russia's invasion of Ukraine.

The committee was "particularly concerned," she and Lynch said. Switzerland's request for data destruction came as the United States, the European Union, and others announced sanctions against Russia.

Credit Suisse sent letters to hedge funds and other investors earlier this month requesting that they destroy documents related to a securitization of loans backed by "jets, yachts, real estate, and/or financial assets."

They were also instructed to "destroy and permanently erase" any confidential information provided by Credit Suisse in connection with the transaction, citing a "recent data leak to the media" that had been "verified by our investigators."

Credit Suisse has been asked to produce documents dating back to January 2017, including a list of all securitisation deal participants, communications related to the storage, destruction, or holding of confidential information about loans backed by yachts and private jets, and know-your-customer and due diligence documents related to loans securitised as part of the transaction. The bank was given until April 11 to submit the documents, according to the letter.

The move by Credit Suisse came after the Financial Times reported that the bank had offloaded risks related to $2 billion in loans to a group of hedge funds. The FT report quoted extensively from the transaction's investor presentation, which revealed the bank's international wealth management franchise's closely guarded business secrets.

By fLEXI tEAM