Heat
Credit Suisse has been ordered to pay billionaire Bidzini Ivanishvili, Georgia’s richest man and the country’s former prime minister, $926 million in compensation for failing to safeguard his assets, another problem for the troubled bank after a series of controversies as Swiss rival UBS prepares to complete its takeover .
UBS recently said it would take over Credit Suisse in an emergency takeover.
Key facts
A judge at the International Commercial Court in Singapore found that Ivanishvili suffered a loss of $926 million from Credit Suisse after being defrauded by Patrice Lescaudron, one of the firm’s private bankers who embezzled funds from numerous wealthy clients.
The court said the sum was the difference between Ivanishvili’s $1.1 billion portfolio at Credit Suisse and the returns it would have been expected to have managed by a “competent, professional investment manager where the fund was not affected by fraud”.
The court ordered Credit Suisse to pay Ivanishvili an amount as compensation for his loss, less the $79.4 million he had already paid.
Verdict follows a similar ruling by a court in Bermuda last year, which ordered the bank to pay $607.5 million in damages.
A court in Singapore said the amount paid for the judgment in Bermuda could be changed to avoid “double recovery” due to the court’s decision.
Credit Suisse said in a statement Forbes’s The Singapore court’s ruling “is wrong and raises very significant legal questions,” adding that it will “vigorously appeal.”
Key background
It leaked report from the Swiss financial regulator revealed Credit Suisse ignored numerous warning signs that one of its biggest bankers, Lescaudron, had breached compliance procedures and falsified accounts to finance a luxury lifestyle for more than a decade. The bank has long claimed that Lescaudron, who died by suicide three years ago, was a rogue actor and was believed to be the victim of a Swiss criminal case against the banker, who was convicted in 2018. The revelations sparked numerous customer lawsuits and was one of a series of scandals the bank has dealt with in recent years. Rival bank UBS announced plans to take over Credit Suisse in March amid fears the bank’s growing fortunes could take the financial system down with it, a deal close in the coming weeks.
Forbes Valuation
4.9 billion dollars. It’s Ivanishvili’s estimated net worthaccording to Forbes’s real time companion. Ivanishvili made his fortune in metals and banking in Russia after the fall of the Soviet Union, later selling out and returning to Georgia in the early years of the 21st century. He is the richest man in Georgia and currently ranks 551st Forbes’s list of the richest people in the world.
Further reading
Not just Trump and Bloomberg: Here are the billionaire politicians of the decade (Forbes)
Forbes – Billionaires