Credit Suisse and UBS Employees In Money Laundering Allegations

by Stewart Douglas

Story link: Credit Suisse and UBS Employees In Money Laundering Allegations

Investment banks Credit Suisse and UBS were today under the media spotlight after several employees were detained by police in Brazil on the suspicion of involvement in money laundering schemes which saw 19 suspects detained in total.

The announcement came that amongst those arrested were thought to be employees from both investment outfits, as well as from insurance company AIG, all allegedly involved in illegal money laundering practices.

The news comes amidst problems all round in the private equity market.  With these potentially damaging stories, it remains to be seen whether the industry will be able to retain the trust of investors, particularly concerning international large scale transactions.

Money laundering involves processing a series of bogus or sham transactions in order to filter out the direct source of certain funds, or dilute their identity for fraudulent purposes.  Under the law of Brazil, and international money laundering treaties the practice is illegal, and carries potentially heft penalties.

Speaking today in an official statement, spokeswoman Dagmar Laub from Credit Suisse said that one employee from their company had been arrested on suspicion of the offence and that they were engaging in dialogue with the police on the issue.

Meanwhile a statement from a UBS spokesperson said that one employee from the investment bank was arrested from its Switzerland base on suspicion of involvement in the alleged incidents, despite the fact that they were relatively in the dark about the nature of the situation, and the ongoing investigation.

Whilst suspects have been arrested and taken into police custody, no one has of yet been charged of any offence.  It remains to be seen whether the police case will carry sufficient weight to give rise to a conviction.