Credit Suisse Group AG

Credit Suisse Accused of Taking on Risky and Outsized Investments

Credit Suisse officials repeatedly touted in SEC filings that the company maintained “comprehensive risk management processes and sophisticated control systems” governing its investment operations. However, contrary to these representations, Credit Suisse schemed to accumulate nearly $3 billion in distressed debt and U.S. collateralized loan obligations (“CLOs”), which were notoriously difficult to liquidate and which violated the company’s purported risk protocols. On February 4, 2016, Credit Suisse revealed a massive $633 million write-down from the sale of the bank’s distressed debt and CLO positions, which would subsequently increase to nearly $1 billion. Credit Suisse’s CEO admitted that traders took outsized illiquid positions in violation of the bank’s risk policies because the bank was “trying to generate revenue at all costs.”

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