(May 23, 2014) — The Employees Retirement System (ERS) of Texas has announced it has suspended all trading with Credit Suisse following the bank’s recent guilty plea for tax evasion.
“We are suspending trading with them at this time,” said Mary Jane Wardlow, spokesperson for the $25 billion pension plan. “We have a policy against hiring firms convicted of felonies.”
Wardlow told aiCIO that after consulting ERS investment and legal staff on Wednesday, the Austin-based pension fund decided to immediately suspend trading with the Zurich-based bank. ERS said the end date for the halt has not been determined. The Texas pension fund has a broker-dealer relationship with Credit Suisse.
The bank, however, said it remains optimistic about current and future relationships with clients.
“While we regret the actions that led to this settlement, our overwhelming experience has been that clients—including pension clients—are continuing to conduct business with us, and we continue to maintain our market share and trading,” said Suzanne Fleming, a spokesperson for Credit Suisse. “In addition, none of the US Credit Suisse entities were implicated in the historical actions that led to the guilty plea.”
The Swiss bank pleaded guilty on May 19 to US federal charges of tax evasion, settling a long-running investigation by the Justice Department.
“The department discovered that Credit Suisse and its subsidiaries engaged in an extensive and wide-ranging conspiracy to help US taxpayers evade taxes,” said Attorney General Eric Holder. “The bank actively helped its account holders to deceive the IRS by concealing assets and income in illegal, undeclared bank accounts. These secret offshore accounts were held in the names of sham entities and foundations. This conspiracy spanned decades.”
Credit Suisse, the largest bank to plead guilty in 20 years, will pay a total of $2.6 billion in fines.
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