Credit Suisse sacks staff with links to Greensill funds after review into collapse
Credit Suisse has fired staff and imposed “severe” financial penalties on various individuals, as the bank investigates the failings that led to the collapse of its Greensill-linked supply chain finance funds.
The Swiss banking giant commissioned the investigation after its asset management division had to suspend a $10bn range of supply chain finance funds that were linked to Greensill, which filed for insolvency in March.
The investigation is close to being finalised, and Credit Suisse today said it has shared its preliminary findings with regulators.
“Based on the preliminary findings of the investigation which have been shared with the regulators, Credit Suisse has taken action with regards to various individuals,” the bank said in an emailed statement seen by Morning Wire.
“These actions include termination of employment and severe monetary penalties via compensation adjustments. External investigations are still ongoing.”
“Based on the preliminary findings of the investigation which have been shared with the regulators, Credit Suisse has taken action with regards to various individuals,” the bank said in an emailed statement.
“These actions include termination of employment and severe monetary penalties via compensation adjustments. External investigations are still ongoing.”
Swiss blog Inside Paradeplatz first reported earlier today that Credit Suisse had dismissed two managers from within its asset management division who had oversight of the Greensill-linked funds, following the investigation’s findings.
The bank has not yet specified any names or numbers of staff.
It comes just two days after the bank announced the departure of Eric Varvel, the executive who previously headed up the bank’s $500bn asset management unit in question, after his thirty year tenure at the Swiss group.
Varvel, who was most recently chair of Credit Suisse’s investment bank and head of its US holding company, had contemplated leaving the bank partly due to a disagreement with the bank’s new chair, Antonio Horta-Osorio, sources told the Financial Times last week.
Varvel was ousted as head of the scandal beset asset management unit shortly after Greensill went bust.
Shortly after, Horta-Osorio joined Credit Suisse from Lloyds in April.
The bank’s asset management unit had to suspend $10bn worth of investments in March that were linked to British firm Greensill, having sold them to investors on the premise that the firm’s popular supply chain finance funds were among the lowest risk investments Credit Suisse offered.
Investors were led to believe that the loans they held were fully insured against losses and backed by invoices that were usually paid in a few weeks.
But as the funds swelled to $10bn, a substantial amount of the money was then lent through Greensill and against invoices for future sales had not taken place but were just predicted.
Although the Swiss lender has collected $7.1bn of the fund’s assets so far, it has previously estimated that around $2.3bn remains at risk.
After months of planning a structural review, last month Horta-Osorio revealed sweeping plans to restructure the beleaguered lender, reining in its investment bank and focusing on its wealth management division.
The new bank chair said the new strategy had been designed to to “rebuild a culture of trust”, as he pulled back from the prime broking unit that slid into a $5.4bn loss from the collapse of US family office Archegos Capital in March.