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February 28, 2014

Credit Suisse CEO Joins Wall Street Clueless Club

“One of the best lines to come out of the financial crisis was by Michael Lewis in a March 2008 column for Bloomberg News: “Jimmy Cayne plays bridge, and Stan O’Neal golfs while their firms collapse, not because they don’t care their firms are collapsing, but because they don’t know that their firms are collapsing,” he wrote.”

“For those who don’t recall, Cayne was the head of Bear Stearns Cos. who snuck away to play in bridge tournaments while Bear careened toward disaster. O’Neal was the head of Merrill Lynch & Co. who played 20 rounds of golf on four different courses between Aug. 12, 2007, and Sept. 30, 2007, while Merrill lost $8.4 billion on subprime-mortgage bonds.”

“Why bring this up? Because we have a new wrinkle on this old adage that senior executives of large banks have no idea what actually goes on inside the bowels of the companies they get paid stunning amounts of money to run. Yesterday Credit Suisse Group AG Chief Executive Officer Brady Dougan said his bank’s top bosses didn’t know the employees there were helping clients hide billions of dollars from the Internal Revenue Service. And his statements obviously deserve to be taken seriously, given that he was testifying under oath.”

“ ‘Some Swiss-based private bankers went to great lengths to disguise their bad conduct from Credit Suisse executive management,’ Dougan told the U.S. Senate Permanent Subcommittee on Investigations at a hearing on the bank’s tax-evasion services. ‘While that employee misconduct violated our policies, and was unknown to our executive management, we accept responsibility for and deeply regret these employees’ actions.’ “

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Read full Bloomberg View article here.

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