U.S. regulators question whether Credit Suisse has rule-breaking culture
By Sarah N. Lynch
WASHINGTON (Reuters) - U.S. pension regulators questioned on Thursday whether criminal violations in one unit of Credit Suisse Group AG reflect broader compliance problems at the Swiss bank, in an unusual public hearing to vet the bank's request to continue managing retirement plans.
Thursday's hearing at the U.S. Department of Labor came at the request of critics, including Democratic lawmakers and consumer groups, who claim the government has a history of rubber-stamping waivers or other exemptions sought by banks that break the law so they can continue certain activities.
At issue is whether Credit Suisse CSGN.VX should be granted permission to continue managing about $2 billion in U.S. retirement money, even though one of its units pleaded guilty in May to conspiring to help Americans evade taxes.
In a series of questions, top DOL officials on Thursday pressed Credit Suisse executives for assurances and other evidence that the bank's U.S.-based asset management unit had no hand in the violations.
Timothy Hauser, a deputy assistant secretary in the Employee Benefits Security Administration, said the bank had admitted to having lax compliance policies and training in its plea deal.
If a permanent exemption is granted, he added, he would waste no time sending in his investigators to follow up and make sure that the independent auditor hired to oversee compliance is not treated like "a set of boxes to be checked."
"It is very hard for me sitting here, without conducting an entire separate investigation, to really have an appreciation to what extent those problems at Credit Suisse AG are cultural problems that involved the entire organization," Hauser said.
Company officials told the regulators that the U.S. unit that manages pension plans is completely isolated from the one involved in the tax evasion case. Continued...