DOJ Intensifies Probe Into Credit Suisse, UBS Group Over Alleged Russian Sanctions Evasion

The US Department of Justice (DOJ) is heightening its investigation into UBS Group AG UBS and Credit Suisse Group for alleged failures in compliance, which may have allowed Russian clients to circumvent sanctions.

What Happened: The DOJ’s inquiry has transformed from a series of subpoenas earlier in the year to a full-fledged investigation, with a primary focus on Credit Suisse Group, as per sources cited by Bloomberg. The department is also reportedly investigating potential compliance issues with UBS.

UBS, which assumed control of Credit Suisse in June, has received notification regarding the alleged involvement of its recently acquired subsidiary in sanctions violations. This occurrence aligns with UBS’s ongoing endeavors to merge the workforce and address the legal issues inherited from Credit Suisse.

Although the inquiry is still in its early stages, it does not automatically indicate impending charges or a resolution. Nevertheless, the Department of Justice (DOJ) is scrutinizing how the banks managed accounts of clients subject to sanctions in recent years.

Bloomberg stated that this investigation encompasses the sanctions imposed following the invasion of Ukraine by Russia in 2022 and previous sanctions related its annexation of Crimea in 2014.

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The DOJ is leveraging UBS’s takeover of Credit Suisse as a chance to expedite its investigation. The department has directly solicited information from UBS, circumventing the typically slower diplomatic routes.

U.S. officials have privately expressed frustrations with Switzerland’s perceived inadequate enforcement of Russian sanctions and counteraction against money laundering. This includes Switzerland’s decision not to participate in a task force aimed at tracking illegal Russian holdings and its prior decision to unfreeze some assets tied to a high-profile corruption case connected to the Kremlin, Bloomberg reports.

Price Check: UBS’s shares were down 3.31% at $24.26 at the time of publication on Wednesday.

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