* CEO Brady Dougan set to appear before U.S. Senate at 0930
* He blames small group of Swiss-based private bankers for
* U.S. senate committee has issued a scathing report on
* Credit Suisse is one of 14 banks under U.S. investigation
By Katharina Bart
ZURICH, Feb 26 Credit Suisse's chief executive
will hit back at allegations the Swiss bank was a willing
accomplice in U.S. tax evasion on Wednesday, blaming instead a
small group of its private bankers for helping Americans conceal
Brady Dougan will tell U.S. senators that Credit Suisse
only uncovered "scattered evidence" of improper
conduct, and its top managers were not aware that a small group
of Swiss-based private bankers helped U.S. customers hide income
"We deeply regret that - despite the industry-leading
compliance measures we have put in place - before 2009,
some Credit Suisse private bankers appear to have violated U.S.
law," Dougan said in prepared remarks, released before his
appearance later on Wednesday in front of a U.S. Senate
subcommittee on offshore tax evasion.
"The evidence showed that some Swiss-based private bankers
went to great lengths to disguise their bad conduct from Credit
Suisse executive management."
Credit Suisse has been accused by U.S. senators of helping
American customers dodge taxes with a variety of tactics,
including creating offshore shell entities, falsifying visa
applications and establishing a branch at Zurich airport, where
wealthy U.S. clients could fly in, conduct their banking and
One Credit Suisse banker even handed account statements to a
client tucked inside a Sports Illustrated magazine, according to
a scathing report released by the Senate Permanent Subcommittee
on Investigations on Tuesday.
In his testimony, Dougan disputes some of the methods used
and some of the finding of the Senate report, saying the
subcommittee improperly assumed every U.S. client account held
in Switzerland was hidden from the U.S. government.
The report said that in 2006, Credit Suisse held 22,000
accounts from U.S. customers worth 12 billion Swiss francs
Switzerland's private banking model has been rattled to its
core by the U.S. crackdown on tax evasion. Credit Suisse's
arch-rival UBS admitted to helping U.S. taxpayers hide
money from the tax man and paid a $780 million fine in 2009.
Evidence culled from the UBS probe as well as thousands of
Americans coming forward under a tax amnesty in the United
States has fed a second wave of investigation, which has
ensnared Credit Suisse and 13 other large Swiss banks.
Credit Suisse shares were down 2 percent in Zurich.
"The market is very focused on the recent news flow and
jittery over the CEO's testimony to the Senate later today. He's
probably in for a rough ride as the U.S. politicians clamour to
score points," said Mike Ingram, analyst at BGC Partners.
Dougan said the bank had implemented a raft of new policies,
including requiring U.S. customers to prove tax compliance and
tightening U.S. travel policy for its Swiss-based private
He also said Credit Suisse had cooperated with U.S.
authorities as fully as possible under Swiss law and had
supported transparency efforts such as the Foreign Account
Compliance Act in the United States.
Dougan said Credit Suisse had come in for harsh criticism at
home for its cooperation with U.S. authorities.
"We are fighting Swiss lawsuits trying to prevent our
delivery of information to U.S. authorities," he said. "These
are not the actions of an institution flouting U.S. law
enforcement or hiding behind Swiss law."
Since the U.S. crackdown on tax evasion, Switzerland's
private banks have suffered outflows of funds from clients in
In addition to the tax evasion issue, the Senate report also
raised questions about the way Credit Suisse recognised new
inflows of money into its private bank in 2012, which it said
bolstered the private bank's financial performance.
Credit Suisse said it had launched an internal probe into
how so-called net new assets are recognised to ensure compliance
with Swiss rules and its own internal policy. It said it was
inaccurate to suggest that management and accountants at Credit
Suisse did not follow company policy on recognising such assets.