Credit Suisse Fined $511M for Tax Evasion, Whistleblowers to Share 15%-30%

Credit Suisse, a prominent global financial institution, has once again found itself in the spotlight due to misconduct allegations. A subsidiary of the bank has pleaded guilty to helping Americans hide assets to evade taxes, in violation of a 2014 settlement agreement with U.S. authorities. This latest development comes after the bank received an emergency bailout in 2023 and is now under the ownership of UBS.

The guilty plea reveals a series of transgressions by Credit Suisse. Following the 2014 settlement, the bank opened over 20 accounts that could be used for tax evasion. It also continued to hold large accounts that should have been reported and closed, and assisted high-net-worth clients in transferring assets without notifying the Internal Revenue Service. The bank acknowledged that as of around 2018, it was aware of at least 475 accounts linked to Americans, holding a total of $4 billion in assets.

UBS, the new owner of Credit Suisse, expressed satisfaction in resolving another legacy issue for the bank. The misconduct has led to a $511 million fine for Credit Suisse. To date, two bankers have come forward as whistleblowers in this case, with the possibility of more individuals doing so. These whistleblowers could receive between 15% and 30% of the settlement amount, making it one of the largest tax whistleblower rewards in U.S. history. The identities of the two Credit Suisse whistleblowers remain undisclosed, as they fear prosecution under Swiss banking secrecy laws, which prohibit bank employees from discussing client information with anyone outside the institution, including foreign tax authorities.

This case highlights the ongoing challenges faced by financial institutions in complying with international tax regulations. The significant reward for whistleblowers underscores the importance of internal reporting mechanisms and the potential consequences for banks that fail to adhere to regulatory standards. The resolution of this issue by UBS demonstrates the new owner's commitment to addressing the legacy problems of Credit Suisse and ensuring compliance with global financial regulations.