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October 19, 2021

Posted  October 19, 2021

Credit Suisse Group AG, together with related subsidiaries, and VTB Capital plc will collectively pay more than $481 million to resolve charges related to the financing of hundreds of millions in loans to the government of Mozambique and an entity owned by that government, Empresa Moçambicana de Atum S.A. (EMATUM), which was formed to develop a tuna fishing project.  Credit Suisse, which pleaded guilty to defrauding investors and entered into a settlement agreement with the SEC, will pay nearly $475 million to U.S. and international authorities, as well as restitution to individual investors.  As part of its guilty plea, Credit Suisse admitted that it made material misrepresentations and omissions in statement to investors including about the planned use of loan proceeds; about $50 million in kickback payments to a Credit Suisse subsidiary and $150 million in bribes to government officials; about the existence and maturity dates of other loans to the government of Mozambique; about other red flags prior to and during the EMATUM financing; and about the risk of default.  In addition, the SEC charged that Credit Suisse violated the internal accounting controls and books and records provisions of the Foreign Corrupt Practices Act. Credit Suisse’s payment consists of a $99 million payment to the SEC ($65 million as a penalty and $34 million in disgorgement and interest), a $247.52 million criminal monetary penalty to the U.S., with $175.6 million to be paid and the remaining to $47.2 million to be credited to related settlements, and $200.7 million to the United Kingdom’s Financial Conduct Authority.  In addition, Credit Suisse agreed to provide $200 million as debt relief to Mozambique. VTB will pay $6.4 million to resolve SEC charges that it mislead investors in a related bond offering structured by VTB Capital and Credit Suisse, which the SEC found failed to disclose the true nature of Mozambique’s debt and the high risk of default on the bonds.  SEC; DOJ

Tagged in: Criminal Proceedings, FCPA, Financial and Investment Fraud, Misrepresentations,