Credit Suisse fined £150m for ‘tuna bonds’ scandal

·2 min read
A sign on the facade of a Credit Suisse Group AG bank branch in Zurich, Switzerland
A sign on the facade of a Credit Suisse Group AG bank branch in Zurich, Switzerland

Credit Suisse has been fined almost £150m as part of a global settlement for its role in the "tuna bonds" scandal that tipped Mozambique into a financial crisis.

The bank will pay a total of $475m (£344m) to settle an investigation into the role it played in the $2bn scandal that sent shockwaves through the east African country.

A subsidiary for the Swiss bank pleaded guilty of conspiracy to commit wire fraud at a hearing in Brooklyn on Tuesday, while Credit Suisse entered into a three-year deferred-prosecution agreement with the US Justice Department.

The case centres around a 2013 deal in which Credit Suisse helped arrange $2bn of loans and bond issues for Mozambique to help fund maritime projects.

The deals were found to have involved hidden debts and bribes, ultimately resulting in Mozambique's donors such as the International Monetary Fund cutting off financial support and triggering a slowdown for the country's economy.

Three former bankers at the Swiss bank later pleaded guilty to charges that included committing money laundering and conspiracy to violate United States anti-bribery laws.

Credit Suisse has struck a $475m global resolution agreement to settle the probe into its role in the matter. It has been attempting to distance itself from historic scandals.

The UK's Financial Conduct Authority said it had fined Credit Suisse £147m as part of this global agreement, saying the fine was for serious financial crime due diligence failures.

Mark Steward, the regulator's enforcement and market oversight chief, said: “The FCA’s fine reflects the impact of these tainted transactions which included a debt crisis and economic harm for the people of Mozambique."

Credit Suisse has also agreed to write off $200m of debt owed by Mozambique as a result of the loans.

Mr Steward said: "The fine would have been higher if not for Credit Suisse agreeing to provide the debt write-off of $200m. The FCA will continue to pursue serious financial crime control failings by regulated firms.”

Credit Suisse said the settlement deals "resolve inquiries into the bank’s arrangement of loan financing for Mozambique state enterprises and related securities transactions that took place between 2013 and 2016". It said it expected to take $230m in charges in the third quarter of the year.

"Credit Suisse is satisfied with the completion of the proceedings by US, UK and Swiss regulatory authorities into the bank’s arrangement of loan financing for Mozambique state enterprises and can now draw a line under the observation matter."

The bank is still set to face a civil trial in London over the Mozambique case in September 2023.

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