Georgian billionaire wins $926 mln from Credit Suisse after fraud
In its judgment published on Friday, the court said the bank had failed to safeguard Ivanishvili's assets by preventing Patrice Lescaudron, an adviser at Credit Suisse Trust in Singapore, having access to them. Lescaudron was convicted by a Swiss court in 2018 of forging signatures of former clients, including Ivanishvili, over an eight year period.
Credit Suisse was ordered to pay $926 million to Georgia's former prime minister on Friday for losing part of his fortune, in a Singapore court ruling that represents one of the biggest legal awards made against the bank. Singapore's International Commercial Court said a unit of Credit Suisse had not acted in good faith and neglected to keep the assets of Bidzina Ivanishvili safe, in the latest blow to the troubled bank, which is being taken over by UBS.
Credit Suisse immediately said it would appeal the decision. Billionaire businessman Ivanishvili, who was Georgia's prime minister in 2012 to 2013, had placed $1.1 billion under the custodianship of Credit Suisse Trust in 2005, the court heard.
Ivanishvili's lawyers Cavinder Bull and Woo Shu Yan from the law firm Drew & Napier said Credit Suisse Trust's failings had led to fraudulent mismanagement and substantial losses. In its judgment published on Friday, the court said the bank had failed to safeguard Ivanishvili's assets by preventing Patrice Lescaudron, an adviser at Credit Suisse Trust in Singapore, having access to them.
Lescaudron was convicted by a Swiss court in 2018 of forging signatures of former clients, including Ivanishvili, over an eight year period. He admitted falsifying trades and hiding losses in a scheme that made him tens of millions of Swiss francs. He was released in 2019 and killed himself in 2020. "It is not accepted that the defendant's conduct was reasonable," Judge Patricia Bergin said in a written judgment.
"It preferred the importance of Mr Lescaudron in retaining the big client, the plaintiff, with the Credit Suisse organisation to the compliance with its core obligation of keeping the Trust assets safe." Credit Suisse knew Lescaudron had breached regulations designed to prevent fraud and had waited for up to two years for a response from him when questioned, Bergin said.
"Its tolerance of these flagrant breaches was not in good faith and was unreasonable," Bergin added. APPEAL
The $926 million to be paid by Credit Suisse will be reduced by $79 million it had already paid in December. "The judgment published today is wrong and poses very significant legal issues," Credit Suisse said in a statement. "Credit Suisse Trust Limited intends to vigorously pursue an appeal," it added.
The bank is also appealing against another judgment related to its management of Ivanishvili's assets. A Bermuda court ruled in March 2022 that Ivanishvili and his family are due damages of around $600 million from Credit Suisse's local life insurance arm.
The final sum due from Credit Suisse should be further reduced to prevent an overlap with the Bermuda case and prevent a so-called double recovery, the court said. Credit Suisse is currently appealing the Bermuda decision. A person familiar with the matter said the overlap is estimated to be about $300 million and that Credit Suisse has already taken provisions for part of the total compensation.
In the Singapore case, the bank will appeal on the basis that the compensation related to money lost due to bad investment decisions rather than just fraud. A spokesman for Ivanishvili welcomed the Singapore decision.
"Despite the judgment in Bermuda last year and the admission of breach of duty during the Singapore trial, Credit Suisse has continued to frustrate our clients' efforts to seek redress for the crimes committed by its employees," the spokesperson said. "We expect Credit Suisse to fully comply with the judgment and finally accept responsibility for its failures."
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)