Credit Suisse Expected to pay $500 Million After losing Lawsuit

Credit Suisse Group AG is expected to pay around $500 million after it lost a lawsuit brought by a Georgian billionaire who claimed the bank mismanaged his money.

Credit Suisse has spent years fending off the claims of former Georgian Prime Minister Bidzina Ivanishvili. He sued banks in Bermuda and Singapore for a breach of trust, claiming he had lost $800 million in a fake transaction by his Geneva-based private bunker Patrice Lescaudron. Ivanishvili is seeking $400 million in damages in Bermuda's Supreme Court, and the five-week trial ended in December.

Lescaudron was sentenced to five years in Switzerland in 2018 for fraud and counterfeiting. According to the Geneva Criminal Court, he copied a client's signature admitting that they unknowingly sucked up money and bought his stock, causing losses of over $150 million. Credit Suisse sought to prevent the report from being shared with Mr Ivanishvili in Bermuda proceedings.

The regulator Finma also censured Credit Suisse in 2018 for inadequately supervising and disciplining Mr Lescaudron and said he had broken internal rules repeatedly. The company said that it caught Mr Lescaudron’s fraud in September 2015, when a stock he bought that he bought for clients crashed.

Credit Suisse had a $1.65 billion litigation clause as of the end of 2021 and it also estimated up to another $1.6 billion in potential charges not provisioned for. The bank has announced that it will assess whether additional reserves are needed for its first-quarter results due on April 27.