UBS does not want to accept the guilty verdict against CS

A good two years ago, Credit Suisse (CS) was found guilty at the Federal Criminal Court in the first instance of having violated anti-money laundering regulations for years in the Bulgarian drug mafia case. Since then, circumstances have changed dramatically.

The then major bank no longer exists after it was taken over by UBS in March 2023. In addition, a co-defendant, a former CS customer advisor with a history as a top athlete, succumbed to long-term cancer shortly afterwards.

The widower of the deceased sat in the audience at the start of the appeal hearing at the Federal Criminal Court on Tuesday. For the time being, he is not allowed to take a seat further up the hall and defend himself against his late wife’s guilty verdict in the first instance. He is completely convinced of her innocence, but so far the courts have denied him the right to challenge the first-instance guilty verdict on behalf of his wife.

UBS is bringing in important personnel

UBS is completely different. At the start of the trial, UBS asserted with important personnel – the legal team is led by Isabelle Romy and Lorenz Erni – that it could not be punished for misconduct by CS. This fundamentally corresponds to the criminal law principle, according to which a punishment must always be linked to personal guilt.

In June 2022, CS was found guilty in the first instance because, in the court’s opinion, it made large-scale money laundering possible due to organizational deficiencies.

For years, members of the Bulgarian drug mafia, some of them former wrestlers, carried briefcases full of cash to the CS. But a Valais man was also intercepted by the police when he wanted to transport the border from Barcelona to Switzerland with 4 million Swiss francs in the trunk, divided into small euro notes. The former Olympian in wrestling got off with a fine.

The CS, on the other hand, was fined CHF 2 million in 2022 for its mismanagement. In addition, the now defunct major bank was supposed to pay a further 19 million francs as a compensation claim. And finally, the criminal chamber of the Federal Criminal Court ordered the confiscation of 12 million Swiss francs from drug mafia accounts.

Judge Ermotti judges UBS with the CEO of the same name

Is CS’s debt ascertained at first instance and the associated financial obligation transferable to UBS after the merger? As luck would have it, a federal criminal judge named Andrea Ermotti also has to decide on this – he is even chairman of the three-member panel. Like UBS boss Sergio Ermotti, Andrea Ermotti is also entitled to live in Lugano.

According to the court, the two are only related to one another to the fifth degree. The parties were informed of this in advance. Everyone agreed that Andrea Ermotti should be allowed to judge UBS with its CEO of the same name, despite his distant family involvement.

UBS is defending itself against transferring the debt

In her presentation, lawyer Romy argued that UBS could not possibly be held liable for events that took place at CS 17 years ago. This contradicts any sense of justice, especially since the two big banks were bitter competitors at the time.

CS has now been removed from the commercial register and simply no longer exists. It could not be possible to transfer the blame to the new owner. UBS’s legal representative argued that this would be like having the heirs of the deceased CS customer advisor take on her punishment.

Another argument against a criminal takeover by UBS is that in March 2023, given the external circumstances, the bank was formally forced to agree to the merger with CS. Given the time pressure, it was simply impossible that weekend to study the many thousands of pages of files on the Bulgarian drug mafia case – and to assess the possible consequences.

The appeals chamber of the Federal Criminal Court will decide on UBS’s applications on Tuesday. If the hearing continues, at least ten more trial days are planned. It is still unclear when the verdict will be opened.