Credit Suisse’s compliance chief has been alerted by Gupta

Credit Suisse’s new global head of compliance has been one of many staff who received internal warnings to deal with Sanjeev Gupta before the bank invested $ 1.2 billion in customer funds in industrial companies. , according to people who know the discussions.

Thomas Grotzer was general counsel for the bank’s Swiss business before his rise last month after his predecessor was forced out.

The bank’s commodities trading financial division severed ties with Gupta’s Liberty Commodities business in 2016 over concerns over documentation surrounding several transactions.

When division leaders discovered two years after Credit Suisse’s funds were invested in notes related to Gupta’s business, they shared their concerns with fund managers and compliance personnel. Discussions were reported earlier by the Wall Street Journal and Bloomberg.

Gupta’s investments were made through a group of supply chain funds managed by Credit Suisse, which the bank was forced to close in March due to a fallen insurance policy, trapping $ 10 billion in savings by customers. The deal also damaged Credit Suisse’s reputation for risk management, and damaged relationships with the bank’s precious ultra-rich clients who have been persuaded to invest in the funds.

The repercussions led to regulatory investigations and an internal probe into Credit Suisse, which included the examination of when staff members were aware of issues surrounding Gupta’s activities.

The probe is also focused on Credit Suisse’s relationship with Greensill Capital, the collapsed financial company that acquired notes for supply chain financial funds, and whether senior executives have ignored the risks in seeking a lucrative relationship with Greensill Capital. the company.

The Office of Serious Fraud of the United Kingdom has also opened an investigation in the financial relations between Gupta and Greensill. The Financial Times has already reported on the suspicious nature of invoices to Gupta companies in which Credit Suisse funds have been invested.

Leaders of Credit Suisse’s raw materials trade finance department have told Grotzer their concerns about dealing with Gupta, as well as Luc Mathys and Lukas Haas, who have overseen the supply chain’s financial resources.

Grotzer has ordered a due diligence review of Gupta’s business, according to a person with knowledge of the matter, but the bank’s asset managers have continued to invest in industry-related bills.

Last month Grotzer was promoted to interim head of global compliance after Lara Warner was forced into the deal. Mathys and Haas – together with the head of Credit Suisse Asset Management in Switzerland and Emea, Michel Degen – have been suspended March while the bank investigates its actions in the collapse of funds.

Mathys, Haas and Degen have not spoken publicly since they were suspended. Grotzer declined to comment.

“We are currently focusing our efforts on recovering our investors’ money, ”Credit Suisse said in a statement. “We are committed to learning the lessons and will share the relevant lessons learned at the right time.”

Gupta’s representative said the industry has denied any wrongdoing.

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