The head of Credit Suisse expressed regret on Wednesday that his bank helped US clients hide billions of dollars from the tax man, but blamed the wrongdoing on a small band of rogue employees.
Chief executive Brady Dougan conceded that the bank, Switzerland’s second-largest, undertook elaborate efforts to gain new, secret US clients.
“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,” Dougan, the first American to lead a major Swiss bank, told US lawmakers. “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.
“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 damning US Senate report found that the bank at its peak in 2006 had more than 22,000 US customers with Swiss accounts, whose assets stood as high as US$12 billion.
No one has stood trial, and the bank has not been held accountable, according to the report.
Analysts say Credit Suisse could face fines of up to US$2 billion, which would dwarf the US$196 million fine regulators imposed last week for providing unregistered brokerage and investment advisory services to US clients.
Dougan testified alongside Hans-Ulrich Meister, who heads Credit Suisse’s private banking division; Robert Shafir, running the bank’s US business; and chief council Romeo Cerutti.
Swiss President Didier Burkhalter downplayed the harsh tone of the hearings and said that the US Senate has yet to ratify a double-taxation deal to underpin closer cooperation on tax issues between the two countries.
Fourteen Swiss banks are under US investigation for allegedly accepting tens of billions of undeclared dollars from US citizens.