(Reuters) - New York state’s top financial regulator has ordered Credit Suisse to turn in the employment records of its former New York head as part of a widening investigation into potential tax evasion involving the Swiss bank, a source close to the matter told Reuters.
The New York State Department of Financial Services has specifically subpoenaed employment records of Roger Schaerer, former head of Credit Suisse’s New York branch, the source said.
The agency, which regulates the bank’s New York office, sent the subpoena last week and is also seeking documents, emails, hard drives, travel and expense reports from the bank’s New York branch, the source said.
Reuters reported on April 7 that the bank faced the possibility of a new investigation by the New York regulator.
Credit Suisse said in an email it was cooperating fully with the investigation.
Schaerer could not immediately be reached by Reuters. He is one of seven Credit Suisse bankers who was indicted by U.S. authorities in 2011. (r.reuters.com/zyq58v)
Switzerland’s second-largest lender had raised expectations it was emerging from its long-running American tax controversy when it set aside an extra half a billion dollars earlier this month to deal with a U.S. Department of Justice investigation of its participation in offshore tax evasion.
But Benjamin Lawsky, New York’s financial services superintendent, is now examining whether the bank lied to New York authorities about creating tax shelters.
Credit Suisse’s litigation headaches come as the bank is buffeted by a slowdown in fixed-income sales and trading, putting Chief Executive Officer Brady Dougan under pressure to pull back faster from riskier areas of investment banking that are expensive to run.
The U.S. pursuit of tax dollars sheltered in offshore accounts has piled pressure on Swiss banks. Credit Suisse said in February it had lost over 35 billion francs in withdrawals from western Europe, as clients, spooked by the probe, pull out.
Credit Suisse will report first-quarter earnings on Wednesday.
Reporting by Karen Rebelo in Bangalore and Katharina Bart in Zurich; Editing by Tom Brown