Credit score Suisse Group AG misplaced a court docket struggle to maintain the lid on confidential stories a couple of deceased rogue-banker convicted of defrauding his wealthy purchasers together with a Georgian billionaire.
The Bermuda Supreme Court docket dominated the Swiss financial institution had no justification for withholding the findings of PricewaterhouseCoopers and Switzerland’s banking regulator into Patrice Lescaudron’s crimes, given their relevance to a trial as a consequence of open within the island nation this month.
“The financial institution has a direct financial curiosity within the end result of those proceedings, and it appears clear that it’s controlling the invention course of and certainly this litigation,” Chief Justice Narinder Hargun stated in a Sept. 30 ruling posted on the court docket’s web site.
Bidzina Ivanishvili, a former prime minister of Georgia value an estimated $6 billion, sued Credit score Suisse’s Bermuda life insurance coverage unit 4 years in the past for alleged breaches of responsibility together with failing “to make sure the prudent funding of premiums.”
Ivanishvili invested $755 million in life insurance coverage merchandise with CS Life in Bermuda and misplaced $400 million of it to Lescaudron’s fraud, his attorneys argue. Whereas Ivanishvili’s losses spurred lawsuits in different jurisdictions together with Singapore and New Zealand, Bermuda accounts for near half of his whole losses, his attorneys say.
Credit score Suisse declined to touch upon the Bermuda court docket ruling.
When Lescaudron’s fraud was uncovered in 2015, Credit score Suisse commissioned PwC to research how he may have faked trades and orders over practically a decade to cowl the rising losses he incurred on behalf of Ivanishvili and a clutch of rich Russian purchasers — with out anybody realizing. The Frenchman was convicted of fraud in 2018 however was launched from jail lower than a yr after his conviction due to poor well being.
Lescaudron, who took his personal life in 2020, was a lone wolf who hid his crimes from colleagues and superiors, the Zurich-based financial institution has persistently stated. Ivanishvili and different plaintiffs say that his colleagues should have recognized about his fraudulent habits and in the event that they didn’t, bear felony duty for failing to identify it.
Refusal
The financial institution’s refusal to share PwC’s findings within the pretrial course of generally known as discovery can’t be justified on the idea that it’s protected by attorney-client privilege, Justice Hargun stated within the ruling.
Given the financial institution gave a few of PwC’s findings to the Swiss prosecutor, which have been used to convict Lescaudron, “it isn’t readily obvious how it may be asserted that the PwC stories are privileged,” Hargun wrote.
Furthermore, he reminded the financial institution that it had agreed to share PwC’s findings with Ivanishvili as they grew to become obtainable, and pledged in a 2015 e-mail to supply him “with full transparency on what we now have available on our methods.”
The financial institution was additionally chided for failing to share with its Bermuda unit copies of a separate unbiased report into Lescaudron’s fraud commissioned by Switzerland’s banking regulator Finma, regardless of its apparent relevance, Hargun stated.
Credit score Suisse in April secured a U.Ok. injunction in opposition to Ivanishvili and his PR adviser who’d posted a replica of the Finma report on-line. CS Life has subsequently obtained a replica of the report, Hargun stated, and there’s “no adequate motive why it shouldn’t be required to supply discovery of the doc.”
Ivanishvili’s PR adviser and a spokeswoman for PwC each declined to remark.
A trial within the case is scheduled to open Nov. 15 on the industrial court docket within the capital Hamilton and is because of final 5 weeks, in keeping with the court docket’s clerk.
Supply: Live Mint