Credit Suisse to pay $333 million to settle tax suit

ZURICH – Credit Suisse Group agreed to pay €238 million ($333 million) to settle a French criminal probe into allegations the bank helped clients stash undeclared funds.

The deal brings to an end the investigation into suspicions of laundering tax fraud proceeds, top financial prosecutor Jean-Francois Bohnert said in court on Monday. Under the terms of the agreement, the Swiss bank makes no admission of guilt.

“It is an important moment for Switzerland’s banking history” and the relation of the country with the French tax authorities, Judge Stephane Noel said during the Paris hearing, after detailing the amounts and approving the resolution of the criminal allegations.

The settlement comes three days before a Credit Suisse strategy announcement aimed at putting an end to years of scandals and losses that have eroded investor confidence. Last week, the Swiss lender wrapped up some other investigations. It agreed to pay US$495 million (S$704 million) to resolve a case related to its sale of residential mortgage-backed securities and won a key class-action US lawsuit over allegations of price-fixing in the foreign exchange market.

Credit Suisse said in a statement that it is “pleased to resolve this matter, which marks another important step in the proactive resolution of litigation and legacy issues”.

The French authorities have often resorted to settlements in recent years to end large probes and in June, the French authorities sealed a €1.25 billion deal with McDonald’s to end a tax case. Overall, the largest amount France collected in a criminal case involved Airbus, where the planemaker paid €2.1 billion in 2020.

The bank last week also won a key class action US lawsuit over allegations of price-fixing in the foreign exchange market, vindicating its decision to fight rather than settle a lawsuit that originally threatened it with as much as US$19 billion in potential damages.

Monday’s case began in 2016 and hit headlines the following year with raids in five nations – France, Germany, the Netherlands, Britain and Australia. The Dutch authorities said after the raids that the tip that sparked the investigation came from one or more informers.

The case is similar to another probe in France into local rival UBS Group AG that culminated last year in penalties worth €1.8 billion for the Swiss bank. UBS has lodged a further challenge to try to overturn the finding at France’s top court.