Geneva cops hold banker over VIP client losses

A banker who reportedly lost tens of millions for a VIP client has been arrested, Swiss investigators said Wednesday.

Geneva cops hold banker over VIP client losses
Photo: AFP

The individual has been detained by Geneva police and his home searched, the public prosecutor for the canton (region) of Geneva told AFP, without giving further details.

The Zurich daily Tages Anzeiger earlier reported that the banker, working for Credit Suisse, had exceeded his authority, losing more than 50 million Swiss francs ($50 million) for a wealthy client.

The daily Le Temps put the losses at closer to 100 million francs and said the client was a Georgian oligarch.
Two other clients have lost 70 million francs and are preparing to file a criminal complaint against Credit Suisse, Le Temps said.
In all three cases, an investment was made in a US pharmaceutical firm, Raptor, whose stock value plummeted after it failed to get regulatory approval in the United States for one of its medications, the French-language daily said.

In its financial report for the third quarter of 2015, Credit Suisse  stated under a section on “customer account matters” that some clients have raised concerns about a “former relationship manager” whose management of their accounts led to investment losses.

“A few clients have claimed that a former relationship manager in Switzerland has exceeded his investment authority in the management of their portfolios, resulting in excessive concentrations of certain exposures and investment losses,” says the report, released in October 2015.

“Credit Suisse AG is investigating the claims, as well as transactions among the clients,” it said.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.


Switzerland’s banks remain among the world’s most secretive

Despite the progress made over the years, the Swiss financial sector continues to be one of the least transparent in the world. But there is good news too.

Switzerland’s banks remain among the world’s most secretive
Switzerland remains one of the world's least transparent nations. Photo AFP

Switzerland is in the third place in the 2020 Financial Secrecy Index released by the non-governmental organisation (NGO) Tax Justice Network (TJN), which rates 133 nations based on their financial transparency.

Two other European countries, Luxembourg and the Netherlands, are also ranked among the top 10 least transparent nations on the TJN’s list.

Despite being in the third place, Switzerland ranks better this year than it did in the previous edition of the Index, which is released every two years — it slipped from the first to third place. The Cayman Islands and the United States took the first and second spots, respectively.

Switzerland reduced its risk of being an offshore haven for tax cheats by 12 percent, “finally improving enough to move off the top of the index”, TJN said. 

READ MORE: Switzerland's strangest taxes – and what happens if you don't pay them

This improvement is mainly due to Switzerland extending its international network for the automatic exchange of customer information to more than 100 countries. 

Also, in a referendum held last year, Swiss voters accepted the Federal Act on Tax Reform and AVS Financing (TRAF). This legislation introduced major changes in the Swiss tax system by ending some preferential tax schemes and replacing them with new regulations which are in line with international standards.

This tax reform prompted the European Union to change Switzerland's status from ‘tax haven' to one which is EU-compliant, removing strict controls on transactions within the EU. 

So why, despite all the reforms, does Switzerland still rank among the world’s least transparent nations?

According to a Swiss NGO Alliance Sud, wealthy people from poor countries can still hide their money here from the tax authorities of their home nations.

Alliance Sud noted that despite the progress made in the past years by Swiss financial institutions, “the fight against tax evasion remains insufficient”.

Switzerland is the world’s biggest centre for managing offshore wealth, with a quarter of global assets invested here.

For years, it has been placed on various lists of tax havens where wealthy foreigners could park their money. Faced with widespread criticism for this practice, Switzerland passed an anti-money laundering law in 1997 and introduced strict regulations against tax evasion.