Mozambique scandal: Compensation for victims from Credit Suisse penalties
Credit Suisse is facing the consequences of its involvement in the Mozambique scandal as the US Securities and Exchange Commission (SEC) has decided to allocate the fines from the case into a fund aimed at compensating the victims. This fund, totaling approximately $105.5 million (CHF96 million), will be used to provide restitution to those affected by the scandal.
The SEC has established the “Credit Suisse Fair Fund” to accommodate the fines collected from both Credit Suisse and the Russian bank VTB Capital, encompassing interest and civil penalties. The SEC’s order, released on Friday, outlines that a specific strategy for distributing these funds to impacted investors will be formalized by the conclusion of July 2025.
Following a settlement with regulatory bodies in the US, UK, and Switzerland in October 2021, Credit Suisse, now under the ownership of UBS, resolved its involvement in the Mozambique loan scandal. As part of the agreement, the bank bore penalties reaching nearly $550 million and waived $200 million in debt owed by Mozambique.
The scandal itself revolved around loans and bonds totaling more than $2 billion that Credit Suisse orchestrated for Mozambique. These financial transactions were executed without the oversight of the country’s local parliament or the International Monetary Fund (IMF). The funds were ostensibly allocated to develop a tuna fishing fleet; however, reports surfaced alleging widespread bribery to corrupt officials, contributing to a severe financial crisis in Mozambique.
The entire episode underscores Credit Suisse’s complicity in illicit financial activities that had far-reaching consequences for the African nation. The subsequent fines reflected the severity of its actions and the need for redress for the victims affected by the scandal.
Overall, the redirection of the fines into a fund designated specifically for compensating the victims signifies a step towards accountability and restitution in the aftermath of the Mozambique scandal. It reinforces the importance of addressing and rectifying injustices caused by financial misconduct, promoting transparency and ethical conduct within the banking sector.