Credit Suisse has agreed to pay France €238 million to settle claims it has broken money laundering laws by luring wealthy clients to Switzerland.
The deal solves one of the Swiss lender’s main problems ahead of a major restructuring this week.
It is the latest case to be resolved in a series of European investigations into undeclared Swiss bank accounts. In France alone, prosecutors have settled similar claims with HSBC and are pursuing sentences in court against UBS.
Monday’s settlement with Credit Suisse, which involves no admission of guilt, is one of the bigger recent deals involving a new French legal structure that seeks to resolve investigations faster and avoid lawsuits that could take years.
The troubled bank is preparing to unveil a major overhaul under chief executive Ulrich Körner on Thursday and would have liked to pre-approve the French investigation, according to people familiar with the matter.
“We are trying to reduce the number of lawsuits,” said a person close to Credit Suisse, which has been affected by a series of scandals and lawsuits around the world.
Credit Suisse may have waited for the next steps in a parallel lawsuit involving UBS “if this was a bank that was doing well and everything was in order,” but opted for certainty in an investigation first started in 2016, the person added.
Another person close to the settlement said talks with Credit Suisse had lasted two years and were complicated by a fluctuating parade of executives as the bank went through several crises.
Credit Suisse also reached a $495 million settlement with US prosecutors last week over a financial crisis-era mortgage bond case.
Credit Suisse was accused by French authorities of encouraging wealthy customers in France to set up bank accounts in Switzerland between 2005 and 2012, which were then out of the reach of the French tax authorities.
Part of the investigation focused on how the bank handled 4,999 French customers with assets under management totaling €2 billion, according to the French judge overseeing the settlement. The judge noted that Credit Suisse staff held customer meetings “very discreetly, in hotels, in restaurants and never in official buildings”.
At the time, Credit Suisse is said to have made an estimated 65 million euros in profits from those customers, who have since settled their individual French tax claims under amnesty agreements, state prosecutors said.
Credit Suisse said in a statement it was “glad to resolve this matter”. The sanctions imposed are divided between a fine of 123 million euros and 115 million euros in damages and interest payments to the state.
Credit Suisse had already settled a similar tax case in Italy in 2016 and is still investigating in the Netherlands.
In 2017, HSBC reached the first settlement using the new legal format in France, which allows parties to avoid a guilty plea in exchange for immediate sanctions, similar to some legal settlements in the US. HSBC agreed to pay €300 million to settle claims it had lured French customers to its Swiss bank.
Aerospace group Airbus has paid the largest no-court settlements of 13 in France to date, with a €2 billion fine for bribery allegations. But some of the sanctions imposed were much lower. Luxury goods group LVMH paid $10 million last year to settle allegations that a former intelligence chief had spied for the company.
UBS was ordered by French judges last year to pay 1.8 billion euros for helping wealthy customers with tax evasion, but is now appealing to a higher court. UBS’s former top in-house attorney Markus Diethelm joined Credit Suisse this year as a general counsel.