Credit Suisse Group AG has agreed to pay nearly $475 million to U.S. and UK authorities, including $100 million to the U.S. Securities and Exchange Commission (SEC), to resolve charges in connection with Mozambican bond offerings, the agency announced Tuesday.
SEC authorities noted that Credit Suisse Group AG misled investors and violated the Foreign Corrupt Practices Act (FCPA), and agreed on payment to domestic and U.K. entities. The bond offerings and a syndicated loan raised funds on behalf of state-owned entities in Mozambique.
The transactions raised over $1 billion, according to the SEC, and were used to execute a debt scheme, issue kickbacks to former Credit Suisse investment bankers and their intermediaries, and bribe Mozambique government officials.
“When it comes to cross-border securities law violations, the SEC will continue to work collaboratively with overseas law enforcement and regulatory agencies to fulfill its Enforcement mission,” Gurbir S. Grewal, director of the SEC’s Division of Enforcement, said. “Our action against Credit Suisse is yet another example of our close and successful coordination with counterparts in Europe and Asia.”
The offering materials created and distributed to investors by Credit Suisse shielded corruption and falsely disclosed the proceeds would help develop Mozambique’s tuna fishing industry, according to the SEC’s order. The SEC also determined Credit Suisse’s internal accounting controls were deficient and did not address bribery risks.
“Credit Suisse provided investors with incomplete and misleading disclosures despite being uniquely positioned to understand the full extent of Mozambique’s mounting debt and serious risk of default based on its prior lending arrangements,” Anita B. Bandy, associate director of the SEC’s Division of Enforcement, said. “The massive offering fraud was also a consequence of the bank’s significant lapses in internal accounting controls and repeated failure to respond to corruption risks.”