The haste with which UBS bought Credit Suisse has raised questions about its real motives. Indeed, the Swiss Federal Prosecutor’s Office was quick to open an investigation to preserve the country’s reputation as a renowned financial center.
UBS’s hasty takeover of Credit Suisse under investigation for financial malfeasance
Until recently, Switzerland was abuzz with the impending bankruptcy of the bank Credit Suisse. The Swiss authorities acted urgently to save this troubled financial institution, fearing that it would affect the national economy.
With the strenuous effort of the Swiss government, it was finally the rival bank UBS which bought it.
The Swiss Central Bank would have indirectly participated in the buyout, by providing well over 100 billion Swiss francs to UBS, to facilitate this acquisition.
However, the federal prosecutor’s office questions this sudden transaction and questions the intentions of UBS. It suspects financial malpractice that motivated this takeover.
Indeed, UBS paid $3 billion to acquire its competitor, a sum that seems minimal compared to the considerable loss of nearly 7 billion Swiss francs incurred by Credit Suisse.
What would be UBS’s underlying motives in this case?
The public prosecutor’s office, based in Bern, has opened an investigation for possible violations of Swiss criminal law by government officials, regulators and executives of both banks. They agreed to an emergency merger between UBS and Credit Suisse, valued at three billion Swiss francs.
According to Reuters, the aim of the investigation is to identify any crimes that may fall under the jurisdiction of the public prosecutor.
There are many elements of the events surrounding Credit Suisse that warrant investigation, and must be analyzed to identify any crimes that may fall within the jurisdiction of the prosecution.Excerpt from the press release from the prosecutor’s office.
At this time, neither UBS nor Credit Suisse have commented on this investigation, and the prosecutor’s office has not provided any specific information on what elements of the merger agreement it may be reviewing, or how long its investigation will last. A case to follow closely!
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