Credit Suisse must pay over $678m after ex-Georgian PM wins suit
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ZURICH • A Bermuda court on Tuesday ruled that Georgia's former prime minister Bidzina Ivanishvili and his family are due damages "substantially in excess of US$500 million" (S$678 million) from Credit Suisse's local life insurance arm in a costly setback for the bank.
The court said Mr Ivanishvili and his family were due the damages as a result of a long-running fraud committed by former Credit Suisse adviser Pascale Lescaudron.
Credit Suisse said its life insurance subsidiary, which is in the process of being wound down, intended to "vigorously pursue" an appeal of the verdict.
The ruling is another blow for the bank, still reeling from billions in losses racked up last year, and as it faces further probes over compliance and risk failings.
Chief Justice Narinder Hargun of the Supreme Court of Bermuda said: "CS Life did not take action or adequate action to prevent Lescaudron's fraudulent mismanagement of the policy accounts because it was prioritising the revenues Lescaudron generated for Credit Suisse over the interest of its clients."
A client of Credit Suisse between 2005 and 2015, Mr Ivanishvili alleged that he racked up hundreds of millions in losses due to forged trades made by Lescaudron.
Lescaudron was convicted by a Swiss court in 2018 of having forged the signatures of former clients, including Mr Ivanishvili, over an eight-year period, and admitted he falsified trades and hid mounting losses as part of a scheme that made him tens of millions of Swiss francs.
The Bermuda case covers only a portion of the damages Mr Ivanishvili is seeking from Credit Suisse, centring on roughly US$400 million in alleged losses incurred from fraudulent and "imprudent" trades on US$755 million invested in insurance policies at Credit Suisse's Bermuda-based life insurance subsidiary, CS Life.
Total losses yet to be repaid, spanning investments in Bermuda, Singapore and Switzerland, exceeded US$800 million, a spokesman for Mr Ivanishvili said.
Mr Ivanishvili is also suing the bank and an affiliate, Credit Suisse Trust, in Singapore over trusts set up there.
He is seeking a further US$300 million in the Singapore case, his spokesman said, which is set to go on trial in September.
Lescaudron, sentenced to five years' jail by a Swiss court in 2018, was ordered to pay damages of US$130 million in Switzerland in connection with the fraudulent schemes.
REUTERS
