Credit Suisse Group AG (NYSE:CS) (Credit Suisse Group AG (NYSE:CS)) has lost a long-running court case against a former prime minister of Georgia over funds stolen by a former employee of the Swiss bank, the Financial Times reported.
It now faces having to pay in excess of US$500mln once the court in Bermuda releases its findings.
The bank’s Bermuda life insurance unit was sued four years ago by Bidzina Ivanishvili, who is estimated to be worth US$6bn, for alleged "breaches of duty”.
The dispute dates back to 2011 when he was a client of the bank.
Lawyers say Ivanishvili invested US$755mln in life insurance with CS Life in Bermuda and lost US$400mln to rogue banker Patrice Lescaudron.
Ivanishvili’s losses prompted lawsuits in Singapore and New Zealand, but Bermuda accounts for almost half of his total losses, according to his lawyers.
In his private banker role at Credit Suisse, Lescaudron financed a lavish lifestyle around luxury houses, sports cars, Rolex watches and Chanel jewellery by defrauding some of the Swiss bank's most sensitive accounts.
In a statement, Credit Suisse said it had previously set aside reserves for this matter and planned to pursue all legal actions.
Credit Suisse has been rocked by a serious of scandals recently. It was fined for arranging a fraudulent loan to Mozambique, was tarnished by its involvement with the financial services firm Greensill scandal, incurred US$5.5bn in losses when US family office Archegos failed and was reprimanded by regulators for spying on executives.