: UBS shares drop after report U.S. DOJ probing Credit Suisse over Russian sanctions evasion

by | Sep 27, 2023 | Stock Market

Shares of UBS Group AG came under pressure on Wednesday after a report that the U.S. Justice Department suspects Credit Suisse helped Russian clients evade sanctionsand may be looking at compliance failures at its new parent company. Citing sources, Bloomberg News said subpoenas at one point sent to multiple banks were now focused on the Swiss bank, Credit Suisse which was taken over by UBS earlier this year. Those sources said the Justice Department was in the early stages of its investigation and that the outcome may be neither charges or a settlement, but that UBS

lawyers in the U.S. had been briefed on Credit Suisse’s potential exposure to violations.

UBS purchased Credit Suisse earlier this year for more than $3 billion with the government’s backing. The combined Swiss bank reported a blowout net profit of $28.88 billion in the second quarter, from $2.11 billion in the previous quarter, mostly due to negative goodwill from the Credit Suisse purchase. The sources said the Justice Department wanted to use that historic merger to advance its probe into Credit Suisse, and had been growing impatient after getting no answers from either Swiss bank over how accounts of sanctioned clients such as Russia were handled. The probe covers sanctions linked to the 2022 Russia invasion of Ukraine and from 2014 when Russia annexed Crimea. A lingering headache for UBS, Credit Suisse is also the subject of other probes by the U.S. department which is still trying to determine whether the bank helped U.S. clients hide their assets, years after it paid a settleme …

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