Swiss bank Credit Suisse is being investigated by the Department of Justice as part of a broader inquiry into banks suspected of helping Americans evade taxes.
The investigation concerns historical private banking services provided on a cross-border basis to people in the United States, Credit Suisse said on Friday, adding the bank had received a letter notifying it that it was being investigated on Thursday.
In 2009, Credit Suisse's local rival UBS AG averted indictment over its undeclared offshore private banking services by agreeing to pay $780 million, admitting to criminal wrongdoing and turning over about 255 client names, later raised by the two sides to an additional 4,450.
Subject to our Swiss legal obligations, we will continue to cooperate with the U.S. authorities in an effort to resolve these matters, Credit Suisse said in a statement.
The DoJ has been conducting a broad investigation into a number of Swiss banks, bankers, and third-party intermediaries to determine if they have helped wealthy American clients dodge taxes.
Companies involved in that probe include Credit Suisse, the second-largest bank in Switzerland; HSBC, Europe's largest bank; Julius Baer, a private bank based in Zurich; and Basler Kantonalbank, a Swiss cantonal bank in Basel, Switzerland.
At 0831 GMT, Credit Suisse shares were trading 1.6 percent lower, underperforming a 0.6 percent fall in the European banking sector. Julius Baer shares were trading 0.2 percent lower.
A spokesman for Julius Baer said the bank had not been contacted by the DoJ so far. Basler Kantonalbank was not immediately available for comment. A spokesman for the Swiss finance department said the ministry had taken note of the investigation.
Vontobel analyst Teresa Nielsen said Switzerland and the United States were likely to continue negotiations along with the DoJ investigation of Credit Suisse.
Currently it is difficult to say whether this will lead to a legal case and a fine against Credit Suisse, Nielsen said.
Jay Rubinstein, Zurich based partner and head of U.S. Tax at law firm Withers said: It is a shame the U.S. is focusing on the Swiss institutions, as the present trend in Switzerland is toward compliance and transparency.
But it is not surprising that the U.S. justice department is focusing its efforts on institution(s) with presence in the United States, given the leverage.
At a June conference in Washington organized by the Organization for Economic Cooperation and Development (OECD), the U.S. Internal Revenue Service's Deputy Commissioner for Services and Enforcement Steven Miller said it planned to move against one or more banks in the next month or so. [ID:nLDE7570X4]
Credit Suisse said in the statement that as previously disclosed, it had been responding to requests for information, including subpoenas, from the DoJ.
Switzerland and the United States have been in talks to try to reach a multibillion-dollar deal over Swiss banks helping Americans to shield their money from the U.S. taxman.
(Additional reporting by Silke Koltrowitz in Zurich; Editing by Will Waterman)