Credit Suisse fined $2.5bn after pleading guilty to US tax charge

Credit Suisse has agreed to pay a $2.5bn fine to authorities in the US for helping Americans evade taxes after becoming the largest bank in 20 years to plead guilty to a US criminal charge.

The bank’s guilty plea resolves its long-running dispute with the US over tax evasion, but could have implications for the clients and counterparties that do business with the group.

Credit Suisse said it had not seen a material impact in the past few weeks on its business, and that clients faced no legal obstacles from doing business with it despite the guilty plea.

Switzerland’s second largest bank escaped what could have been the worst outcome for its business - its top management stayed in place and it will not have to hand over client data, protected by Swiss secrecy laws. And the New York state bank regulator decided not to revoke the bank’s license in the state.

US prosecutors said the bank helped clients deceive US tax authorities by concealing assets in illegal, undeclared bank accounts, in a conspiracy that spanned decades, and in one case began more than a century ago.

“This case shows that no financial institution, no matter its size or global reach, is above the law,” Attorney General Eric Holder said at a news conference in Washington.

“We deeply regret the past misconduct that led to this settlement,” Credit Suisse CEO Brady Dougan said yesterday.

The Justice Department has not often pursued such convictions of financial companies, especially large ones that could become destabilised following an indictment. But US politicians have pushed for tougher punishment for big banks in response to the 2007-2009 financial crisis.

Credit Suisse will pay the penalties to the US Department of Justice, the Internal Revenue Service, the Federal Reserve and New York’s banking regulator, the New York State Department of Financial Services. It had already paid just under $200mn to the Securities and Exchange Commission.

Switzerland’s left-wing Social Democrats renewed a call first made last week for Dougan and other executives to step down to allow the bank to make a fresh start. Asked whether he had considered such a move, Dougan, a 24-year veteran of the bank who took over as CEO in 2007, said resignation had “never been a consideration” and he remained committed to the bank.