CORRUPTION: Credit Suisse's Charter MUST BE REVOKED

CORRUPTION: Credit Suisse's Charter MUST BE REVOKED

The Market Ticker, September 19. 2009


Again, "WTF"?

A Swiss bank that used its Cayman Islands’ branch to engage in what a US federal judge has branded “predatory lending practices” is being investigated by the US authorities.
Senior officials of Credit Suisse, Switzerland’s second largest bank, are facing claims that they pocketed millions of dollars by dishing out loans that were impossible to repay.

Impossible to repay? What's the judge say about this?

Credit Suisse has now been accused of loaning the money in an unorthodox and lucrative deal for the bank that federal bankruptcy judge Ralph B. Kirscher described in May this year as a case of “naked greed” that “shocks the conscience of this court.”

This was a bunch of low-level employees, or even middling staff, right?  Uh, wrong:

Brady Dougan, the Chief Executive Officer of Credit Suisse First Boston, and Hans-Ulrich Doerig, Chairman of the Board of Directors, received the subpoenas along with past and current Executive Board officials and Credit Suisse’s Board.

“Bank officials have testified that Credit Suisse created a Cayman Islands ‘branch’ in 2005 to sell these loans.
“In reality, there was no phone and no staff in the bank’s phony branch.
“They used the Caymans to circumvent US banking laws and to issue inflated loans that Credit Suisse executives called a ‘gravy train’ in internal memos.“

What?!

The allegations here are that this institution's directors, including the Chairman of the Board and its Chief Executive Officer were both involved in setting up a branch in the Cayman Islands that had no staff and no phones?

This makes two Swiss banks.

First we had UBS that ran a "private bank" for "special" US Citizens who didn't want to pay their taxes and which, it is alleged, actually conspired with some of them to do things like hide diamonds in toothpaste tubes while crossing the US Border so as to secret out wealth without the IRS knowing about it.

Some few thousand (about 10%) of those "wealthy" US citizens were threatened with being "outed" (and presumably will be) but the rest.... well, there's no enforcement there, right?

Now we have a judge that has said something you almost never hear in open court: that the conduct of a litigant "shocks the conscience" of the court.

That's a legal term of art that was first established in 1953 in the United States in a famous case regarding due process of law. It refers to conduct that is so outrageous that it is found to be manifestly and grossly unjust.

Why do we have two Swiss Banks operating inside the United States with US Federal banking charters where one admitted to suborning tax evasion by literally tens of thousands of Americans, and now we have a judge claiming that a second Swiss Bank intentionally set up a shell corporation in the Caymans to defraud US borrowers?