Swiss prosecutors file charges against Credit Suisse and UBS

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Swiss prosecutors have filed charges against Credit Suisse and its owner UBS over alleged organisational “deficiencies” linked to a roughly $7mn payment at the centre of the Mozambique $2bn “tuna bonds” scandal.

The office of the attorney-general said Credit Suisse, which was taken over by Swiss rival UBS in 2023, failed to maintain adequate controls and did not report the suspicious transaction until 2019.

In its statement, the prosecutor alleged Credit Suisse, its parent group and their successor companies at UBS “failed to prevent the offence because of organisational shortcomings”.

Prosecutors also charged a former Credit Suisse compliance officer with money laundering for allowing $7mn to be sent to the UAE in 2016, after $7.8mn had first been paid into a company account at a Credit Suisse group entity.

Mozambique paid the $7.8mn to Palomar Capital, a vehicle used by Andrew Pearse, a former Credit Suisse banker who pleaded guilty to handling $45mn in kickbacks to set up the hidden loans but avoided a US prison term this year.

The tuna bonds case stems from a $2bn deal in 2013 in which Mozambique — one of the world’s poorest countries — borrowed heavily from international investors to fund maritime security projects and a state tuna fishing fleet.

However, much of the money was secretly misused, with officials and bankers accused of taking bribes and leaving the country with huge debts.

The case marks Switzerland’s potentially most significant action to date tied to the scandal, which involved more than $2bn in state-backed loans.

“We firmly reject the Office of the attorney-general’s conclusions and will vigorously defend our position,” UBS said in a statement.

Jonas Hertner, a Zurich lawyer, said the case could become an important test of whether a company’s criminal liability survives a merger in Switzerland. Swiss courts have previously suggested that UBS might inherit Credit Suisse’s criminal exposure, but the issue has not been definitively settled, he added.

In 2023, UBS agreed a settlement with Mozambique over Credit Suisse’s involvement in the ship-financing scandal, drawing a line under a dispute that stretched back to the bank’s 2013 financing of a coastal patrol force and tuna-fishing fleet.

UBS has been working to settle a long list of legal disputes it inherited after rescuing Credit Suisse. The acquisition saddled Switzerland’s largest bank with numerous legacy cases, including regulatory probes, investor lawsuits and misconduct claims stretching back more than a decade.

The lender has already settled several of these legacy legal issues. In August, UBS agreed to pay $300mn to resolve a US case related to the mis-selling of residential mortgage-backed securities by Credit Suisse in the run-up to the 2008 financial crisis.

UBS also agreed in May to pay $511mn following a US Department of Justice investigation into how Credit Suisse helped wealthy Americans hide more than $4bn from authorities.

Shares in UBS were 0.3 per cent lower in afternoon trading in Zurich at SwFr30.92, but are up more than 8 per cent since the start of the year.