The US Department of Justice has stepped up its probe into Credit Suisse Group and UBS Group over suspected compliance failures that allowed Russian clients to evade sanctions, according to people familiar with the situation.
What began as a series of subpoenas sent to a range of banks early this year has developed into a full-scale investigation focusing on Credit Suisse, said the people, who requested anonymity to speak about an ongoing inquiry.
The DOJ has briefed US-based lawyers for UBS about Credit Suisse’s alleged exposure to sanctions violations since UBS acquired its smaller rival in June, the people said. The DOJ is also looking into possible compliance failures at UBS, one of them said.
The probe is still at an early stage and may not result in charges or a settlement, the people said. Still, it comes at a delicate time for the Zurich-based bank, which is absorbing thousands of employees from Credit Suisse. Along with Credit Suisse’s business, which boosted its wealth management business by almost a third to over US$4 trillion (S$5.5 trillion), UBS also inherited Credit Suisse’s legal woes, the main cause of its collapse in March.
The DOJ has asked for information about how the banks handled the accounts of sanctioned clients over the past several years but has not requested interviews with executives or staff yet, one of the people said.
The probe covers both restrictions imposed after Russia’s invasion of Ukraine in 2022 and previous rounds put in place following its 2014 annexation of Crimea, another person said. More than a thousand wealthy Russians have been blacklisted by the US over the last decade.
A spokeswoman for UBS declined to comment. A spokesperson for the Department of Justice declined to comment.
US Frustration
Internally, DOJ officials saw the takeover as an opportunity to advance the Credit Suisse investigation, two of the people said.
Investigators have taken requests for information to UBS directly, rather than routing through official diplomatic channels, which can be slower, according to two other people familiar with the case.
Formally, any requests for help from foreign prosecutors must be funneled through the Swiss Federal Office of Justice, except in rare cases of cooperation such as the joint US-Swiss raids on FIFA in 2015. The FOJ says that to date it’s received no requests related to Credit Suisse, UBS and Russian sanctions.
https://www.straitstimes.com/business/banking/ubs-credit-suisse-face-growing-probe-over-alleged-russian-sanctions-evasion
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