US steps up probe of Credit Suisse and UBS over sanctions breaches, 28 September 2023

The US Department of Justice (DOJ) has stepped up its probe into Credit Suisse and UBS over suspected compliance failures that allowed Russian clients to evade sanctions, according to people familiar with the situation. 

What began as a series of subpoenas sent to a range of banks early this year has developed into a full-scale investigation focusing on Credit Suisse, said the people, who requested anonymity to speak about an ongoing inquiry. The DOJ has briefed US-based lawyers for UBS about Credit Suisse’s alleged exposure to sanctions violations since UBS acquired its smaller rival in June, the people said. The DOJ is also looking into possible compliance failures at UBS, one of them said.

The probe is still at an early stage and may not result in charges or a settlement, the people said. Still, it comes at a delicate time for the Zurich-based bank, which is absorbing thousands of employees from Credit Suisse. Along with Credit Suisse’s business, which boosted its wealth management business by almost a third to over $4 trillion, UBS also inherited Credit Suisse’s legal woes, the main cause of its collapse in March.

The DOJ has asked for information about how the banks handled the accounts of sanctioned clients over the past several years but has not requested interviews with executives or staff yet, one of the people said. The probe covers both restrictions imposed after Russia’s invasion of Ukraine in 2022 and previous rounds put in place following its 2014 annexation of Crimea, another person said. More than a thousand wealthy Russians have been blacklisted by the US over the last decade...

A spokesperson for UBS declined to comment. A spokesperson for the Department of Justice declined to comment...