Topline
Credit Suisse has been ordered to pay billionaire Bidzina Ivanishvili, Georgia’s richest man and the country’s former prime minister, $926 million in compensation for failing to safeguard his assets, another setback for the troubled bank following a string of controversies as Swiss rival UBS prepares to finalize its takeover.
UBS recently said it would acquire Credit Suisse in an emergency takeover.
Key Facts
A judge at the Singapore International Commercial Court determined Ivanishvili had suffered a loss of $926 million from Credit Suisse after he was defrauded by Patrice Lescaudron, one of the firm’s private bankers who misappropriated funds from numerous wealthy clients.
The court said the sum was the difference between Ivanishvili’s $1.1 billion portfolio under Credit Suisse and the returns it would have been expected to achieve had it been managed by a “competent, professional investment manager where the trust fund was not affected by fraud.”
The court ordered Credit Suisse to pay Ivanishvili the sum as compensation for his loss, minus $79.4 million it had already paid.
The judgment follows a similar ruling from a court in Bermuda last year, which ordered the bank to pay damages of $607.5 million.
The Singapore court said the amount paid for the Bermuda ruling could change so as to avoid “double recovery” on account of the court’s decision.
In a statement, Credit Suisse told Forbes’ the Singaporean court’s judgment “is wrong and poses very significant legal issues,” adding that it will “vigorously pursue an appeal.”
Key Background
A leaked report from Switzerland’s financial regulator revealed Credit Suisse ignored numerous warning signs that one of its top bankers, Lescaudron, was flouting compliance procedures and defrauding accounts to fund a luxury lifestyle for more than a decade. The bank has long claimed Lescaudron, who died by suicide three years ago, was a rogue actor and it was considered to be a wronged party in the Swiss criminal case against the banker, who was convicted in 2018. The revelations sparked numerous lawsuits from clients and was one of a string of scandals the bank has dealt with in recent years. Rival bank UBS announced plans to take over Credit Suisse in March amid fears the bank’s spiraling fortunes could take the financial system with it, a deal that is due to close in coming weeks.
Forbes Valuation
$4.9 billion. That’s Ivanishvili’s estimated net worth, according to Forbes’ real time tracker. Ivanishvili built his fortune from metals and banking in Russia following the fall of the Soviet Union, later selling up and returning to Georgia in the early years of the 21st century. He is Georgia’s richest man and currently ranks 551st on Forbes’ list of the world’s richest people.
Further Reading
Not Just Trump And Bloomberg: Here Are The Billionaire Politicians Of The Decade (Forbes)
UBS Warns Rushed Credit Suisse Rescue Could Be ‘Considerably More Difficult And Risky’ Than Expected (Forbes)