(Bloomberg) -- Credit Suisse’s 2022 conviction for failing to prevent the money laundering of a cocaine dealer’s profits was overturned by a Swiss appeals court following the death of one of its former employees who was found guilty in the case.
A., as the former banker can only be named, died in April 2023 following a long-running illness, complicating the appeals process. The Swiss Criminal Appeals Court ruled on Wednesday that it “in view of A.’s death, it was not possible to examine the bank’s” alleged breach “without violating the presumption of innocence of the deceased.”
Therefore, the court said, the bank should be acquitted and compensation it was ordered to pay of 19 million Swiss francs ($21.5 million) canceled.
Under Swiss law, prosecutors can press criminal charges against banks if they believe those institutions didn’t do enough to screen clients and prevent criminal wrongdoing.
Credit Suisse was the first Swiss bank convicted of money laundering at trial for such an offense while commodities-trading giant Trafigura faces trial on Monday in Switzerland on charges its Dutch unit failed to prevent bribery.
Credit Suisse’s conviction was one of a number of court cases and lawsuits that UBS had looked to resolve since the takeover of its troubled former rival last year.
The 2022 conviction was both an embarrassment for Credit Suisse and a reminder to investors that for too long it took on risky new clients and money without doing proper checks or compliance.
Less than nine months later, with its stock in a tailspin, Credit Suisse was acquired by UBS in a government-brokered takeover.
“UBS welcomes the court’s decision to acquit the bank in connection with a legacy matter related to Credit Suisse,” the Zurich-based bank said in a statement following the decision.
The Swiss federal prosecutors who brought the case can appeal the acquittal verdict to the country’s supreme court. A spokesman for the Attorney General’s office said that it’ll review the judgment and then decide on next steps, declining to comment further.
(Updates with AG’s response in last paragraph)
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