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April 7, 2014

Credit Suisse Is Said to Be Facing Double-Barreled Inquiries

“After years of false starts and stops, the Justice Department is nearing the end of an investigation into the role Credit Suisse played in hiding American wealth offshore. But at the same time, a new investigation is beginning, threatening to entangle the giant Swiss bank for even longer.

“The biggest danger to Credit Suisse, suspected of sheltering billions of dollars for American clients who evaded taxes, comes from federal prosecutors. While the Justice Department has considered a so-called deferred-prosecution agreement that would suspend any indictment in exchange for a large cash penalty and other concessions, it is also pushing for a guilty plea from a Credit Suisse subsidiary, people briefed on the case said, a punishment that banks generally avoid in all but the gravest cases. The cash penalty, the people said, is expected to exceed the $780 million that Switzerland’s largest bank, UBS, paid to resolve a similar case in 2009.

“The Credit Suisse case, the outcome of which depends on settlement talks in the coming weeks, will most likely strike a blow at overseas tax shelters, a hallmark of Switzerland’s banking system. And while the case will resolve a major liability for Credit Suisse, it won’t put the shelter problem to rest.”

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Read full NY Times Dealbook article here.

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