NY regulator investigates Credit Suisse for its role in tax evasion case

Bloomberg said in a report that the Department of Financial Services of the state of New York is currently reviewing the private banking practices of Credit Suisse Group AG and whether it resulted into the evasion of state taxes by its clients. According to an unnamed source who refused to be identified as the investigation is confidential, NYDFS superintendent Benjamin Lawsky has already issued a demand for the Zurich-based bank to release documents pertinent to the investigation last month. Moreover, Lawsky also had requested material gathering before the US Senate Permanent Subcommittee on Investigations during the latter's probe of the private banking and wealth management business of Credit Suisse, the source added.

Bloomberg said that the Senate unanimously approved resolution No. 398, which authorizes the gathering of records by the Permanent Subcommittee on Investigations of the Committee on Homeland Security and Governmental Affairs. The source affirms that the resolution was passed because of Lawsky's petition.

London-based analyst Christopher Wheeler with Mediobanca SpA said about the latest probe on Credit Suisse, "For Credit Suisse, this will be very annoying. Having looked like they were close to dealing with this issue following the additional provisions it took last week, now it is back in the spotlight."

The bank secrecy of the Zurich-based Credit Suisse started to erode when the US has charged the country's largest bank, UBS AG, with assisting US citizens to cheat taxes imposed by the Internal Revenue Service. Bloomberg said UBS avoided getting prosecuted by paying a massive $780 million settlement and admitted its wrongdoing. Credit Suisse, on the other hand, had been investigated by federal prosecutors over its alleged role with helping Americans avoid taxes for three years.

The Senate subcommittee, which is headed by Michigan Democrat Carl Levin, presented the results of its investigation on overseas tax evasion, which claimed that 1,800 employees of the Zurich-based bank aided Americans to open 22,000 accounts, of which majority were hidden from US tax authorities. Credit Suisse Chief Executive Officer Brady Dougan had passed the blame to a small group of employees during his testimony at a hearing, the news agency added.

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Credit Suisse Group AG, New York Department of Financial Services, Benjamin Lawsky, Credit Suisse tax evasion

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