Credit Suisse Subpoenaed By NY Bank Regulator [REPORT]

Credit Suisse Group AG (ADR) (NYSE:CS) is said to have received a subpoena from the Department of Financial Services in New York. The Financial Times cites an unnamed source who said officials demanded the employment records of Roger Schaerer, who headed up the bank’s New York branch. Regulators were also said to have requested documents about the bank’s compensation plans for its bankers and also human resource documents.

Credit Suisse cooperates with investigation

New York regulators began investigating Credit Suisse Group AG (ADR) (NYSE:CS) last month after a U.S. Senate subcommittee reported that the bank helped the U.S. owners of 22,000 U.S. accounts evade taxes. Specifically, they want to find out if the Swiss bank helped any clients in New York avoid state taxes. Regulators also want to know if bank representatives misled them when they were examining the bank in the past.

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Credit Suisse Group AG (ADR) (NYSE:CS) said it is cooperating with the investigation. It has already turned over a number of documents in response to a past informal request it received. This report about the bank being subpoenaed suggests that officials may be escalating their probe of the bank. Although the New York regulatory agency does not have the authority to file criminal charges against Credit Suisse, it could levy penalties or fines against the bank if it determines that there has been wrongdoing.

Credit Suisse works to resolve probes

Credit Suisse Group AG (ADR) (NYSE:CS) will release its next earnings report tomorrow. The bank has reportedly set aside funds for the purpose of resolving various investigations. The amount of those funds has now reached $818 million, according to the Financial Times. Last month, Credit Suisse also settled with Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and $234 million to Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC)

The Department of Justice previously indicted eight of Credit Suisse Group AG (ADR) (NYSE:CS)’s former bankers, including Schaerer. He holds dual citizenship with the U.S. and Switzerland and lives outside the U.S. He hasn’t responded to the allegations raised against him. However, one of the other bankers in the case has already plead guilty and is cooperating with DoJ officials.