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ECONOMY | 19-04-2023 10:13

Credit Suisse accused of hindering probe into Nazi accounts

Credit Suisse accused of impeding an investigation into its historical assistance to Nazis that had revealed a number of previously undisclosed accounts, including 99 allegedly linked to German officials or Nazi-affiliated groups in Argentina.

Credit Suisse Group AG was accused by US lawmakers of impeding an investigation into its historical assistance to Nazis that had revealed a number of previously undisclosed accounts.

The allegations relate to an internal probe started after the Simon Wiesenthal Center informed the lender in 2020 that it had new information about Nazi-linked accounts. While Credit Suisse agreed to investigate, the bank established an unnecessarily rigid and narrow scope, refused to follow new leads and removed the independent ombudsman overseeing it, according to a statement by the US Senate’s Budget Committee.

“When it comes to investigating Nazi matters, righteous justice demands that we must leave no stone unturned,” Senator Chuck Grassley said in the statement. “Credit Suisse has thus far failed to meet that standard.”

The accusations add to the challenges facing the Swiss lender as it’s being taken over by larger rival UBS Group AG, which last month agreed to buy Credit Suisse in a government-led rescue. While the US$3 billion price tag marked a steep discount, the emergency deal hashed out over a weekend left little time for UBS to assess risks such as potential losses on assets, legacy issues and litigation.

The spat over the internal Credit Suisse probe comes about a quarter century after the two big Swiss banks reached a US$1.25-billion settlement with victims of the Holocaust. That accord resolved claims that the banks failed to return assets to survivors of Hitler’s genocide and heirs of victims. It also covered claims by victims whose assets were looted by the Nazis and deposited in Swiss banks.

The latest internal Credit Suisse investigation was conducted by forensic research firm AlixPartners and overseen by Neil Barofsky, the former inspector general of the Troubled Asset Relief Program. Barofsky, a frequent Wall Street critic, also served as the monitor for the Justice Department’s settlement with Credit Suisse over the bank’s sale of residential mortgage-backed securities, and as monitor after the Swiss firm in 2014 admitted to helping Americans evade taxes.

Barofsky was removed as ombudsman by Credit Suisse in November. While he was initially tasked with producing a public report on his findings, the Budget Committee only obtained the document after issuing a subpoena, it said in the statement.

Credit Suisse, in a statement on its website, said the probe didn’t support key claims by the Simon Wiesenthal Center and that Barofsky’s report contained “numerous factual errors, misleading and gratuitous statements and unsupported allegations that are based on an incomplete understanding of the facts.”

“The bank strongly rejects these misrepresentations,” Credit Suisse said. The bank is fully cooperating with an inquiry by the Budget Committee and has extended the mandate of AlixPartners.

The reports the Committee obtained indicate that Credit Suisse seems to have maintained accounts for at least 99 individuals who were either senior Nazi officials in Germany or members of Nazi-affiliated groups in Argentina. A vast majority of those have not previously been disclosed. Some remained open until recently.

The probe identified 21 accounts from a list of notorious high-level Nazis provided by the SWC, including one that belonged to a Nazi commander who was sentenced at Nuremberg and another belonging to an SS commander who was convicted, according to the Budget Committee. The sentenced commander’s account remained open until 2002.

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