Credit Suisse to Pay Nearly $475 Million to U.S. and U.K. Authorities to Resolve Charges in Connection with Mozambican Bond Offerings
Credit Suisse Group AG agreed to pay nearly $475 million to U
Credit Suisse Group AG agreed to pay nearly $475 million to U.S. and U.K. authorities for orchestrating a $1 billion fraud involving secret debt offerings on behalf of Mozambique’s state-owned entities, hiding corruption, kickbacks to bankers and officials, and misleading investors about the true use of proceeds and Mozambique’s debt risks. The SEC found Credit Suisse violated antifraud provisions and internal controls by falsifying offering materials that claimed funds would support Mozambique’s tuna industry, while concealing massive hidden liabilities and bribery. Credit Suisse paid $34 million in disgorgement and $65 million in penalties to the SEC, $175 million in criminal fines to the DOJ, and over $200 million to the UK’s FCA. A VTB Capital subsidiary separately paid $6.4 million to settle related charges for its role in a 2016 bond offering that also concealed Mozambique’s default risk and diverted funds. The coordinated enforcement action, involving multiple global regulators, underscored failures in internal controls and cross-border corruption oversight.
Credit Suisse Group AG agreed to pay nearly $475 million to U.S. and U.K. authorities for orchestrating a $1 billion fraud involving secret debt offerings on behalf of Mozambique’s state-owned entities, hiding corruption, kickbacks to bankers and officials, and misleading investors about the true use of proceeds and Mozambique’s debt risks. The SEC found Credit Suisse violated antifraud provisions and internal controls by falsifying offering materials that claimed funds would support Mozambique’s tuna industry, while concealing massive hidden liabilities and bribery. Credit Suisse paid $34 million in disgorgement and $65 million in penalties to the SEC, $175 million in criminal fines to the DOJ, and over $200 million to the UK’s FCA. A VTB Capital subsidiary separately paid $6.4 million to settle related charges for its role in a 2016 bond offering that also concealed Mozambique’s default risk and diverted funds. The coordinated enforcement action, involving multiple global regulators, underscored failures in internal controls and cross-border corruption oversight. Credit Suisse Group AG agreed to pay nearly $475 million to U.S. and U.K. authorities for fraudulently misleading investors and violating the Foreign Corrupt Practices Act (FCPA) in connection with $1 billion in bond offerings and a syndicated loan for Mozambique’s state-owned entities, which concealed a hidden debt scheme and kickbacks to bankers and officials. The SEC found that Credit Suisse falsified offering materials, falsely claiming proceeds would fund Mozambique’s tuna industry while hiding the country’s unsustainable debt and corruption, due to gross failures in internal controls. Credit Suisse paid $34 million in disgorgement and $65 million in penalties to the SEC, $175 million in criminal fines to the DOJ (after credits), and over $200 million to the UK’s FCA. VTB Capital, a Russian bank subsidiary, separately paid $6.4 million to settle its role in misleading investors in a related 2016 bond offering. The resolution followed coordinated enforcement actions with U.S., U.K., Swiss, and UAE authorities, highlighting cross-border collaboration in combating international securities fraud and corruption. Credit Suisse Group AG agreed to pay nearly $475 million to U.S. and U.K. authorities for orchestrating a $1 billion fraud involving secret debt schemes tied to Mozambican state-owned entities, violating the FCPA and securities antifraud provisions by misleading investors about the true use of proceeds and concealing massive corruption and default risks. The SEC found that Credit Suisse falsified offering documents, hid bribes paid to Mozambican officials and its own bankers, and failed to maintain adequate internal controls, resulting in a $34 million disgorgement, $65 million penalty to the SEC, a $247 million DOJ criminal fine (net $175 million after credits), and a £165 million ($200+ million) penalty to the UK’s FCA. A VTB Capital subsidiary separately paid $6.4 million to settle its role in misleading investors in a related 2016 bond offering. The coordinated enforcement action, involving the DOJ, FCA, Swiss FINMA, and UAE authorities, underscores global regulatory collaboration in combating cross-border financial fraud and corruption.
Exhibits & Attached Documents (2)
Extracted insights
- $1.00B $1 billion ≥$1B
- $475.00M $475 million $100M–$1B
- $247.00M $247 million $100M–$1B
- $200.00M $200 million $100M–$1B
- $175.00M $175 million $100M–$1B
- $100.00M $100 million $100M–$1B
- $65.00M $65 million $10M–$100M
- $34.00M $34 million $10M–$100M
- $6.00M $6 million $1M–$10M
- $4.00M $4 million $1M–$10M
- $2.40M $2.4 million $1M–$10M
- agency $175 million after crediting to doj
- agency $65 million penalty to sec
- person anita b. bandy
- agency associate director of sec's division of enforcement
- person corrupt mozambique government officials
- person credit suisse
- company credit suisse and vtb capital
- person deficient internal accounting controls
- agency Department of Justice
- agency director of sec's division of enforcement
- person gurbir s. grewal
- agency more than $34 million in disgorgement and interest to sec
- agency more than $6 million to settle sec charges
- agency nearly $100 million to the securities and exchange commission
- company vtb capital
- Credit Suisse Group AG agreed to pay nearly $475 million to U.S. and U.K authorities
- Credit Suisse Group AG paid nearly $100 million to the Securities and Exchange Commission
- Credit Suisse Group AG violated Foreign Corrupt Practices Act (FCPA)
- Credit Suisse Group AG fraudulently misled investors in bond offerings and syndicated loan scheme
- Credit Suisse raised over $1 billion for state-owned entities in Mozambique
- Credit Suisse paid kickbacks to former Credit Suisse investment bankers and intermediaries
- Credit Suisse bribed corrupt Mozambique government officials
- Credit Suisse hid underlying corruption in offering materials
- Credit Suisse falsely disclosed that proceeds would help develop Mozambique's tuna fishing industry
- Credit Suisse failed to disclose full extent and nature of Mozambique's indebtedness and default risk
- Credit Suisse had deficient internal accounting controls
- VTB Capital agreed to pay more than $6 million to settle SEC charges
- VTB Capital misled investors in 2016 bond offering
- Credit Suisse and VTB Capital failed to disclose true nature of Mozambique's debt and high risk of default
- Credit Suisse and VTB Capital failed to disclose diversion of significant funds from earlier offering
- Mozambique defaulted on financings after secret debt was revealed
- Credit Suisse violated antifraud provisions and internal accounting controls of federal securities laws
- Credit Suisse agreed to pay more than $34 million in disgorgement and interest to SEC
- Credit Suisse agreed to pay $65 million penalty to SEC
- U.S. Department of Justice imposed $247 million criminal fine on Credit Suisse
- Credit Suisse paid $175 million after crediting to DOJ
- Credit Suisse agreed to pay over $200 million penalty to United Kingdom's Financial Conduct Authority
- VTB Capital violated negligence-based antifraud provisions of federal securities laws
- VTB Capital agreed to pay over $2.4 million in disgorgement and interest
- VTB Capital agreed to pay $4 million penalty
- Gurbir S. Grewal is Director of SEC's Division of Enforcement
- Anita B. Bandy is Associate Director of SEC's Division of Enforcement
Credit Suisse Group AG has agreed to pay nearly $475 million to U.S. and U.K authorities, including nearly $100 million to the Securities and Exchange Commission, for fraudulently misleading investors and violating the Foreign Corrupt Practices Act (FCPA) in a scheme involving two bond offerings and a syndicated loan that raised funds on behalf of state-owned entities in Mozambique. According to the SEC's order, these transactions that raised over $1 billion were used to perpetrate a hidden debt scheme, pay kickbacks to now-indicted former Credit Suisse investment bankers along with their intermediaries, and bribe corrupt Mozambique government officials. The SEC's order finds that the offering materials created and distributed to investors by Credit Suisse hid the underlying corruption and falsely disclosed that the proceeds would help develop Mozambique's tuna fishing industry. Credit Suisse failed to disclose the full extent and nature of Mozambique's indebtedness and the risk of default arising from these transactions. The SEC's order also finds that the scheme resulted from Credit Suisse's deficient internal accounting controls, which failed to properly address significant and known risks concerning bribery. “When it comes to cross-border securities law violations, the SEC will continue to work collaboratively with overseas law enforcement and regulatory agencies to fulfill its Enforcement mission,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. “Our action against Credit Suisse today is yet another example of our close and successful coordination with counterparts in Europe and Asia.” "Credit Suisse provided investors with incomplete and misleading disclosures despite being uniquely positioned to understand the full extent of Mozambique's mounting debt and serious risk of default based on its prior lending arrangements," said Anita B. Bandy, Associate Director of the SEC's Division of Enforcement. "The massive offering fraud was also a consequence of the bank's significant lapses in internal accounting controls and repeated failure to respond to corruption risks." A London-based subsidiary of Russian bank VTB separately agreed to pay more than $6 million to settle SEC charges related to its role in misleading investors in a second 2016 bond offering. According to the SEC's order, the second offering as structured by VTB Capital and Credit Suisse allowed investors to exchange their notes in an earlier bond offering for new sovereign bonds issued directly by the government of Mozambique. But the SEC found that the offering materials distributed and marketed by Credit Suisse and VTB Capital failed to disclose the true nature of Mozambique's debt and the high risk of default on the bonds. The offering materials further failed to disclose Credit Suisse's discovery that significant funds from the earlier offering had been diverted away from the intended use of proceeds that was disclosed to investors. Mozambique later defaulted on the financings after the full extent of "secret debt" was revealed. The SEC's order against Credit Suisse finds that it violated antifraud provisions as well as internal accounting controls and books and records provisions of the federal securities laws. Credit Suisse agreed to pay disgorgement and interest totaling more than $34 million and a penalty of $65 million to the SEC. As part of coordinated resolutions, the U.S. Department of Justice imposed a $247 million criminal fine, with Credit Suisse paying, after crediting, $175 million, and Credit Suisse also agreed to pay over $200 million in a penalty as part of a settled action with the United Kingdom's Financial Conduct Authority. VTB Capital consented to an SEC order finding that it violated negligence-based antifraud provisions of the federal securities laws. Without admitting or denying the findings, VTB Capital agreed to pay over $2.4 million in disgorgement and interest along with a $4 million penalty. The SEC's investigation was conducted by Lesley B. Atkins and Douglas C. McAllister with assistance from Wendy Kong of the Office of Investigative and Market Analytics, Carlos Costa-Rodriguez of the Office of International Affairs, and supervisory trial counsel Tom Bednar. The case was supervised by Ms. Bandy. The SEC appreciates the assistance of the U.S. Department of Justice's Money Laundering and Asset Recovery Section and Fraud Section, the U.S. Attorney's Office for the Eastern District of New York, the United Kingdom's Financial Conduct Authority, the Swiss Financial Market Supervisory Authority, and the United Arab Emirates Securities and Commodities Authority.
Credit Suisse Group AG has agreed to pay nearly $475 million to U.S. and U.K authorities, including nearly $100 million to the Securities and Exchange Commission, for fraudulently misleading investors and violating the Foreign Corrupt Practices Act (FCPA) in a scheme involving two bond offerings and a syndicated loan that raised funds on behalf of state-owned entities in Mozambique. According to the SEC's order, these transactions that raised over $1 billion were used to perpetrate a hidden debt scheme, pay kickbacks to now-indicted former Credit Suisse investment bankers along with their intermediaries, and bribe corrupt Mozambique government officials. The SEC's order finds that the offering materials created and distributed to investors by Credit Suisse hid the underlying corruption and falsely disclosed that the proceeds would help develop Mozambique's tuna fishing industry. Credit Suisse failed to disclose the full extent and nature of Mozambique's indebtedness and the risk of default arising from these transactions. The SEC's order also finds that the scheme resulted from Credit Suisse's deficient internal accounting controls, which failed to properly address significant and known risks concerning bribery. “When it comes to cross-border securities law violations, the SEC will continue to work collaboratively with overseas law enforcement and regulatory agencies to fulfill its Enforcement mission,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. “Our action against Credit Suisse today is yet another example of our close and successful coordination with counterparts in Europe and Asia.” "Credit Suisse provided investors with incomplete and misleading disclosures despite being uniquely positioned to understand the full extent of Mozambique's mounting debt and serious risk of default based on its prior lending arrangements," said Anita B. Bandy, Associate Director of the SEC's Division of Enforcement. "The massive offering fraud was also a consequence of the bank's significant lapses in internal accounting controls and repeated failure to respond to corruption risks." A London-based subsidiary of Russian bank VTB separately agreed to pay more than $6 million to settle SEC charges related to its role in misleading investors in a second 2016 bond offering. According to the SEC's order, the second offering as structured by VTB Capital and Credit Suisse allowed investors to exchange their notes in an earlier bond offering for new sovereign bonds issued directly by the government of Mozambique. But the SEC found that the offering materials distributed and marketed by Credit Suisse and VTB Capital failed to disclose the true nature of Mozambique's debt and the high risk of default on the bonds. The offering materials further failed to disclose Credit Suisse's discovery that significant funds from the earlier offering had been diverted away from the intended use of proceeds that was disclosed to investors. Mozambique later defaulted on the financings after the full extent of "secret debt" was revealed. The SEC's order against Credit Suisse finds that it violated antifraud provisions as well as internal accounting controls and books and records provisions of the federal securities laws. Credit Suisse agreed to pay disgorgement and interest totaling more than $34 million and a penalty of $65 million to the SEC. As part of coordinated resolutions, the U.S. Department of Justice imposed a $247 million criminal fine, with Credit Suisse paying, after crediting, $175 million, and Credit Suisse also agreed to pay over $200 million in a penalty as part of a settled action with the United Kingdom's Financial Conduct Authority. VTB Capital consented to an SEC order finding that it violated negligence-based antifraud provisions of the federal securities laws. Without admitting or denying the findings, VTB Capital agreed to pay over $2.4 million in disgorgement and interest along with a $4 million penalty. The SEC's investigation was conducted by Lesley B. Atkins and Douglas C. McAllister with assistance from Wendy Kong of the Office of Investigative and Market Analytics, Carlos Costa-Rodriguez of the Office of International Affairs, and supervisory trial counsel Tom Bednar. The case was supervised by Ms. Bandy. The SEC appreciates the assistance of the U.S. Department of Justice's Money Laundering and Asset Recovery Section and Fraud Section, the U.S. Attorney's Office for the Eastern District of New York, the United Kingdom's Financial Conduct Authority, the Swiss Financial Market Supervisory Authority, and the United Arab Emirates Securities and Commodities Authority.