Fed To Credit Suisse: Improve Anti-Money Laundering Practices

The U.S. Federal Reserve ordered Credit Suisse to boost its anti-money laundering (AML) policies, citing shortcomings in its U.S. operations, Reuters reported.

According to an order, the bank will have to put forth a plan to change the policies in 90 days, to show it’s appropriately looking for illegal activity and reporting it regularly to the regulator, according to Reuters.

Credit Suisse said it is committed to meeting the terms “in a timely and thorough manner,” and it is already working on a “extensive enhancement plan” for its New York operation, Reuters reported.

“The bank has already been implementing an extensive enhancement plan to its New York Branch BSA/AML procedures, processes and oversight, which predominantly addresses the requirements of today’s agreement,” Credit Suisse said in a statement, according to Reuters.

Reuters reported that the order was reached via a joint agreement between the New York Department of Financial Services and the Fed.

This comes just days after Swiss prosecutors charged the bank in a years-old case from 2008 in which Credit Suisse reportedly failed to catch money laundering related to a Bulgarian crime ring in which cocaine trafficking money was moved, PYMNTS reported.

To those allegations, Credit Suisse responded with a sharp denial, saying it was surprised prosecutors had gone forward with charges on the old case, PYMNTS reported. The case also involved charges against an individual former Credit Suisse bank manager, and the bank said it was convinced that unnamed employee was innocent as well.

According to PYMNTS, the case alleges that Credit Suisse “failed to take all the organizational measures” that would be considered reasonable. The money from the cocaine deals, according to the report, went to buy property in Switzerland and Bulgaria. The bank failed to freeze 35 million francs that were part of a 2007 seizure order.

Credit Suisse said it intended to defend itself “vigorously” in that case.