Credit Suisse Fears Sentencing Will Harm Asset Management Business

Credit Suisse has asked a US district court to postpone its sentencing date for tax evasion in fear of losing management of billions of dollars in pension plan assets.

The Swiss bank pleaded guilty to the federal charges of “aiding, assisting, procuring, counseling, and advising of the preparation and presentation of false income tax returns to the Internal Revenue Service of the Treasury Department” on May 19.

According to the motion filed Tuesday, the bank said the scheduled August 12 sentencing date would not give the US Department of Labor (DOL) enough time to issue permission for Credit Suisse to continue its services to pension plans.

It asked the court to push the sentencing to “at least” the beginning of November for the DOL to work through the “long-standing process requirements.” 

A judgment without permission from the DOL would “effectively preclude the asset management affiliates of [Credit Suisse] from managing these [pension] plans,” the bank said in its filing.

Credit Suisse declined to comment at time of press.

The bank submitted its guilty plea and an agreement to pay $2.6 billion in May, closing a three-year investigation by the US Justice Department. Since then, the Employees Retirement System (ERS) of Texas announced it had suspended all trading with Credit Suisse following discussions with its investment and legal staff.

Despite the statement from the Austin-based pension fund, Credit Suisse remained optimistic at the time of its 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,” a spokesperson said following Texas ERS's decision.

Texas ERS revealed to CIO Thursday that it had lifted the suspension of trading activities with Credit Suisse on June 20 “after close due diligence.” 

Related Content: Texas Pension Drops Credit Suisse After Guilty Plea