Credit Suisse `regrets` misconduct, blames rogue staff

The head of Credit Suisse expressed regret Wednesday that his bank helped US clients hide billions from the tax man, but blamed the wrongdoing on a small band of rogue employees. The bank could and should have done more to stop workers from aiding and abetting tax evasion on behalf of American account holders, chief executive Brady Dougan said. "Credit Suisse acknowledges that misconduct, centered on a small group of Swiss-based private bankers, previously occurred at our bank," Credit Suisse said in a statement to a US Senate panel that led a years-long investigation of "Swiss bank secrecy." A Senate inquiry found that the bank, Switzerland`s second largest, undertook elaborate efforts to help thousands of wealthy US clients evade billions of dollars in taxes. "Credit Suisse`s management team regrets very deeply that despite the industry-leading compliance measures we put in place, we have some Swiss-based private bankers who appear to have violated US law," said Dougan, the first American to lead a major Swiss bank. "While I am extremely dismayed by the conduct, Mr Chairman, I also believe that leadership requires facing up to the past, and taking responsibility for what our employees did." An internal probe found no evidence that Credit Suisse management was aware of the problems, the bank said. The Senate report, based on a two-year investigation, maintained that Credit Suisse had "nearly 19,000 US customers with hidden Swiss assets totalling nearly $5 billion" as of 2006. That represents some 85 percent of the bank`s more than 22,000 US customers in 2006 with Swiss accounts whose assets, at their highest, exceeded $13.5 billion, the report said. That amount is more than "twice as much as what was said so far," Swiss business lawyer Douglas Hornung told AFP, speculating that Credit Suisse could face US fines reaching $2.0 billion. This would dwarf the $196-million fine Credit Suisse was slapped with last week by regulators for providing unregistered brokerage and investment advisory services to US clients.Senator Carl Levin, chairman of the subcommittee that led the investigation, took Credit Suisse to task for failing to live up to promises of transparency after a similar 2008 investigation. "It`s five years later, and the sad truth is that the era of bank secrecy is not over," Levin said, adding that efforts to collect unpaid taxes on hidden offshore assets seem to have "stalled." Levin demanded that the bankers "turn over the names of the people you aided and abetted in tax evasion," noting that so far they had given only 238 names. Among the practices revealed by the Senate, several Swiss bankers were sent to the United States to secretly find new clients, leaving no paper trail, at events like golf tournaments sponsored by the bank. Levin said former Credit Suisse clients were taken to meetings in Zurich on remote-controlled buttonless elevators, received bank statements hidden inside magazines, and were issued secret US credit cards allowing them to draw on their Swiss accounts. "We should have caught it," Dougan said of the misbehavior. Dougan testified alongside Hans-Ulrich Meister, who heads Credit Suisse`s private banking division; Robert Shafir, in charge of the bank`s US business; and chief council Romeo Cerutti. Meister said his bank shared "absolutely the same goal" as US authorities in ending secretive accounts. Levin countered that banks continued to hide behind Switzerland`s secrecy laws, but he also expressed regret that US authorities have yet to make arrests in the case. From 2008 to 2011, after a tax-evasion scandal broke at Swiss bank UBS, Credit Suisse began phasing out its evasive practices, asking clients to close their accounts or declare them. By late 2013 the number of Swiss accounts held by US clients at Credit Suisse fell by 85 percent, the report said. Swiss President Didier Burkhalter played down the harsh tone of the hearings and noted that the US Senate has yet to ratify a double-taxation deal to underpin closer cooperation on tax issues between the two countries. Credit Suisse is one of 14 Swiss banks under US investigation for allegedly accepting tens of billions of undeclared dollars from US citizens. Source :  http://zeenews.india.com/business/news/companies/credit-suisse-regrets-misconduct-blames-rogue-staff_95242.html