Credit Suisse (CS) Flags Potential $500 Million Hit

Credit Suisse (NYSE: CS) could pay roughly $500 million after a Bermuda court ruling found that the bank mismanaged money belonging to a Georgian billionaire, the bank warned.

Bidzina Ivanishvili, a former prime minister of Georgia, brought a case against Credit Suisse in Bermuda and Singapore, citing a breach of trust and saying he sustained an $800 million loss from forged trades conducted by his private banker Patrice Lescaudron.

Ivanishvili demanded $400 million in damages in Bermuda’s Supreme Court. The trial lasted five weeks and ended in December.

Credit Suisse issued a statement saying it expects a court ruling against the bank, involving over $500 million in damages. The judgment comes as a result of Ivanishvili’s lawsuit, according to the reports.

Lescaudron was given a prison sentence of five years in 2018 in Switzerland for fraud and forgery. He then admitted he was forging client signatures to divert money and purchase stocks without clients’ approval, causing them over $150 million in losses.

Lescaudron apologized to his clients and Credit Suisse and served a two-year pretrial prison sentence. He was released in 2019 and committed suicide in 2020.

The Swiss bank has been fending off Ivanishvili’s allegations for years, claiming it was a victim of a rogue banker who broke the rules.

However, court evidence in Bermuda showed that a number of executives and managers of Credit Suisse knew that Lescaudron was breaching the rules but chose to ignore the breach as he brought the bank around $25 million each year.

By Senad Karaahmetovic

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