Credit Suisse Group AG (NYSE:CS) is to appeal a conviction from Switzerland's Federal Criminal Court for failing to stop money laundering by a Bulgarian cocaine trafficking ring that marked the first criminal offence by a major Swiss bank.
Switzerland's second-biggest bank was fined 2mln Swiss francs (US$2.1mln), with the court ordering the bank to forfeit assets worth more than Sfr12mln that the drug gang held in accounts at Credit Suisse.
The court also ordered the bank to surrender more than Sfr19mln that could not be confiscated due to internal problems.
During the trial, which included testimony on murders and cash stuffed into suitcases, a former Credit Suisse employee was found guilty of money laundering.
The ex-employee was accused of helping conceal the criminal origins of money by handling more than Sfr146mln in transactions, including Sfr43mln in cash.
Seen as a test case for prosecutors to take a tougher line against the country's banks, Alice de Chambrier, the federal prosecutor, welcomed the verdict as "good for transparency".
Credit Suisse did not do enough to prevent the cocaine trafficking gang from laundering profits through the bank between 2004 and 2008, the court ruled, noting deficiencies in both the management of client relations with the criminal organisation and in the monitoring of anti-money laundering rules.
The ex-employee and Credit Suisse have both denied any wrongdoing and Credit Suisse intends to appeal the conviction.
The bank said the case stemmed from an investigation that lasted more than 14 years, and said, "Credit Suisse is continuously testing its anti-money laundering framework and has been strengthening it over time, in accordance with evolving regulatory standards."
"Generating compliant business growth in line with legal and regulatory requirements is key for Credit Suisse."