In re Credit Suisse Group AG

 
UNITED STATES OF AMERICA 
Before the 
SECURITIES AND EXCHANGE COMMISSION 
 
 
SECURITIES ACT OF 1933 
Release No. 11001 / October 19, 2021 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 93382 / October 19, 2021 
  
ADMINISTRATIVE PROCEEDING 
File No. 3-20629 
 
 
In the Matter of 
 
Credit Suisse Group AG 
Respondent. 
ORDER INSTITUTING CEASE-AND- 
DESIST PROCEEDINGS PURSUANT TO 
SECTION 8A OF THE SECURITIES ACT 
OF 1933 AND SECTION 21C OF THE 
SECURITIES EXCHANGE ACT OF 1934, 
MAKING FINDINGS, AND IMPOSING A 
CEASE-AND-DESIST ORDER 
 
I. 
 
The Securities and Exchange Commission (“Commission”) deems it appropriate that cease- 
and-desist proceedings be, and hereby are, instituted pursuant to Section 8A of the Securities Act of 
1933 (“Securities Act”) and Section 21C of the Securities Exchange Act of 1934 (“Exchange Act”), 
against Credit Suisse Group AG (“Credit Suisse” or “Respondent”). 
 
II. 
 
In anticipation of the institution of these proceedings, Respondent has submitted an Offer of 
Settlement (the “Offer”) which the Commission has determined to accept. Solely for the purpose of 
these proceedings and any other proceedings brought by or on behalf of the Commission, or to which 
the Commission is a party, Respondent admits the Commission’s jurisdiction over it and the subject 
matter of these proceedings, and consents to the entry of this Order Instituting Cease-and-Desist 
Proceedings Pursuant to Section 8A of the Securities Act of 1933 and Section 21C of the Securities 
Exchange Act of 1934, Making Findings, and Imposing a Cease-and-Desist Order (“Order”), as set 
forth below. 

 
III. 
 
On the basis of this Order and Respondent’s Offer, the Commission finds
1 
that: 
 
Summary 
 
1. This matter concerns an offering fraud and violations of the internal accounting 
controls and books and records provisions of the Foreign Corrupt Practices Act by Credit Suisse, 
from 2013 to 2016, in connection with three interconnected transactions involving, among others, 
United Kingdom-based Credit Suisse entities and Mozambican state-owned entities. The transactions 
include a syndicated loan and two securities offerings by Mozambican state-owned entities, the first of 
which Credit Suisse underwrote, structured, marketed and distributed, and the second of which Credit 
Suisse underwrote, structured, marketed and distributed as a joint lead manager with another 
international investment bank, VTB Capital plc (“VTB”).  Specifically, the transactions—the latter 
two of which are securities offerings—include: (1) a 2013 $622 million syndicated loan to a 
Mozambican state-owned entity known as ProIndicus S.A. (“Proindicus”), for which Credit Suisse 
provided $504 million in financing—and an extension of payment terms in a later, related 
transaction; (2) a 2013 $850 million offering of interest-bearing loan participation notes (“LPNs”) 
marketed and sold to the international bond market to finance debt offered to a second Mozambican 
state-owned entity known as Empresa Mocambicana de Atum S.A. (“EMATUM”), to which Credit 
Suisse also provided $500 million in financing; and (3) a 2016 bond offering by the Republic of 
Mozambique, commenced after Credit Suisse discovered several irregularities and risks associated 
with the EMATUM offering, that allowed investors to exchange their LPNs  for new sovereign 
bonds issued directly by the government of Mozambique (the “Exchange Offer”). The-then Minister 
of Finance signed a guarantee on behalf of Mozambique for the ProIndicus and EMATUM LPN 
transactions. Mozambique has since disputed the validity of the guarantees. 
 
2. Credit Suisse, through the actions of three former bankers, Banker 1, Banker 2, and 
Banker 3 (collectively, the “CS Bankers”) as further described herein,
2
 knew that ProIndicus and 
EMATUM were newly formed state-owned entities with no prior business operations. The ProIndicus 
and EMATUM projects were vehicles through which the CS Bankers and intermediaries received 
kickbacks and corrupt Mozambique government officials obtained bribes, which were paid by the 
intermediaries. The CS Bankers, who hid the corruption scheme and their kickbacks from other 
members of management, received kickbacks totaling at least $50 million.  Together with 
Mozambican government officials, the improper payments and kickbacks totaled at least $200 
million.    
 
3. The CS Bankers were able to carry out the long-running scheme as a result of Credit 
Suisse’s deficient internal accounting controls environment, in which the bank acted unreasonably 
in addressing bribery risks associated with the transactions.  By the time of the EMATUM LPN 
                                                   
1
 The findings herein are made by the Commission in connection with Respondent’s Offer of Settlement and are not 
binding on any other person or entity in this or any other proceeding.  
 
2
 The CS Bankers were indicted by the U.S. Attorney’s Office for the Eastern District of New York and each has 
entered a guilty plea. 
 

 
offering, Credit Suisse, through the actions of the CS Bankers, hid the underlying corruption scheme 
and drafted offering materials on behalf of Mozambique that falsely represented to investors that the 
proceeds would be used exclusively to develop the country’s tuna fishing industry and generate 
revenues to make principal and interest payments to investors. The offering materials drafted by 
Credit Suisse also failed to sufficiently disclose to investors its conflict of interest—that the bank 
was a major creditor under the ProIndicus transaction with interests, in certain respects, adverse to 
noteholders.  Further, Credit Suisse knew or should have known that the debt disclosures provided by 
Mozambique were false and misleading because they failed to disclose Mozambique’s true level of 
indebtedness and, relatedly, its risk of default on the notes and ability to pay back investors. These 
disclosure failures rendered the offering materials false and misleading.   
 
4. By 2016, after Credit Suisse learned that EMATUM would not be able to meet 
repayment obligations under the schedule provided for in the LPNs and of other red flags 
surrounding the transaction, Credit Suisse and VTB structured the Exchange Offer to allow investors 
to exchange the LPNs they already held for new sovereign bonds issued directly by the government 
of Mozambique. By the time of the closing, Credit Suisse knew the full scope of Mozambique’s 
debt from financing extended by VTB, including a $535 million 2014 loan to a third government-
owned entity known as Mozambique Asset Management (“MAM”) provided by VTB, as well as an 
additional $118 million to ProIndicus and $350 million to EMATUM funded by VTB.  The-then 
Minister of Finance, again, signed a guarantee on behalf of Mozambique for the MAM transaction, 
though Mozambique has since disputed the validity of the guarantee. 
 
5. In connection with the Exchange Offer, the offering materials prepared by Credit 
Suisse on behalf of Mozambique did not disclose to investors the true nature of Mozambique’s 
indebtedness and the magnitude of missing funds from the prior offering.  Specifically, the offering 
materials failed to accurately and fully disclose Mozambique’s indebtedness, including over $622 
million in financing that it and VTB had provided to Mozambique through the ProIndicus transaction 
and $535 million in financing that VTB had provided to MAM. The offering materials also failed to 
disclose to investors the existence of the ProIndicus and MAM transactions and the banks’ conflicts 
of interests relating to these transactions.  While the offering documents for the EMATUM and 
Exchange Offer included disclosures that Credit Suisse was a party to other financing agreements, 
the conflict of interest—that the bank was a major creditor under the ProIndicus transaction with 
interests, in certain respects, adverse to noteholders—was not specifically disclosed.  As a result, 
investors in EMATUM LPNs and the Exchange Offer were not provided with a complete and 
accurate picture of the true nature and magnitude of the country’s debt, the high risk of default on 
the LPNs and that Credit Suisse had placed its own interests as a creditor above bondholders. 
 
6. In April 2016, shortly after investors approved the Exchange Offer and after news 
reports on “secret” debt, Mozambique disclosed the ProIndicus and MAM transactions and the true 
nature of its guaranteed debt.  Simultaneously, it emerged that since, at least 2013, Mozambique 
had misrepresented its public and publicly-guaranteed indebtedness to the International Monetary 
Fund (“IMF”).  The IMF and other international donors halted financial support to Mozambique and, 
in turn, the country defaulted on the bonds 
 
7. The EMATUM LPN transaction is the basis for the violations of Exchange Act 
Section 10(b) and Rule 10b-5 and Securities Act Section 17(a)(1). The EMATUM and Exchange 

 
Offer transactions are the bases for violations of Securities Act Sections 17(a)(2) and 17(a)(3).  
From 2013 to 2016, Credit Suisse engaged in violations of the books and records and internal 
accounting controls provisions of the Exchange Act, including violations of the Foreign Corrupt 
Practices Act. 
 
Respondent 
 
8. Credit Suisse Group AG (“Credit Suisse” or “the Bank”) is a multinational 
investment bank and financial services company based in Switzerland. Credit Suisse’s American 
Depository Receipts are listed on the NYSE under the symbol “CS,” and its securities are registered 
with the Commission pursuant to Section 12(b) of the Exchange Act. The U.K. Credit Suisse entities 
involved in the underlying conduct include:  Credit Suisse International (“CSI”), Credit Suisse 
Securities (Europe) Limited (“CSSEL”), and Credit Suisse AG, London Branch (“CSLB”).  Credit 
Suisse is the direct or indirect holding company for Credit Suisse’s subsidiaries.  
 
Facts 
 
The ProIndicus Transaction 
 
9. On February 28, 2013, Credit Suisse agreed to arrange a $372 million syndicated 
loan to ProIndicus, a newly-formed company that was owned and controlled by the government of 
Mozambique. A few weeks before, on January 18, 2013, ProIndicus entered into a $366 million 
contract with an intermediary based in the United Arab Emirates (“Intermediary”) that was to provide 
equipment and services to ProIndicus in connection with certain maritime projects. Between June 
and August 2013, Credit Suisse agreed to upsize the loan to ProIndicus by an additional $132 
million, bringing the total financing amount to $504 million. The financing represented a landmark 
expansion for the bank’s footprint in the Sub Saharan Africa region. In November 2013, VTB 
extended another $118 million to ProIndicus, bringing the total amount of the financing to $622 
million.  Since inception of the loan, Credit Suisse has been the largest member of the loan syndicate.  
The then-Minister of Finance signed a guarantee on behalf of Mozambique for these transactions.  
Mozambique has since disputed the validity of the guarantee. 
 
10. ProIndicus was officially established to supply vessels and training to protect 
Mozambique’s coastline and maritime interests. The proceeds from the financing from Credit Suisse 
and VTB were supposed to be used exclusively for maritime projects known as the “Exclusive 
Economic Zone” project (the “Project”). The loan agreement specifically required ProIndicus to 
“apply all amounts borrowed by it under the Facility towards the financing of the ...Project” and 
prohibited improper payments in violation of FCPA and other anti-bribery laws. 
 
11. In reality, ProIndicus was set up by Mozambican government officials acting in 
collusion with an agent of the Intermediary (“Intermediary Agent”) in order to carry out an extensive 
scheme involving improper payments to government officials and others. As part of the scheme that 
began in 2012, only a portion of the loan proceeds were applied towards maritime projects while the 
rest were diverted for kickbacks to the CS Bankers and the Intermediary Agent, and bribes to 
Mozambican government officials. The deal was also structured to hide the level of Mozambique’s 
indebtedness from the IMF.  Subsequently, near the time of the closing of the ProIndicus transaction 

 
in 2013, the CS Bankers agreed to accept improper kickbacks, which, alongside the improper 
payments to government officials were hidden from other members of Credit Suisse management.  
From 2013 through 2016, the CS Bankers, Mozambican officials and others received improper 
payments, in total, of approximately $200 million in connection with securing the ProIndicus and 
EMATUM financings. 
 
12. Several contemporaneous communications reflect that improper payments were 
intended to be paid to Mozambican government officials by the Intermediary, and the deals were 
structured to build into the financing the amounts that would be paid.  For example, in a 2012 email 
from the Intermediary Agent to Banker 3 and two other Bank employees, he stated that “[a] 
‘premium’ is well expected by the Mozambicans.” Around the same time, the Intermediary Agent 
also advised Banker 3 in a phone discussion that a high ranking Mozambican official understands 
that he will be paid a premium from the financing deal. 
 
13. In connection with the ProIndicus transaction, Credit Suisse’s books and records did 
not record the fact that a substantial portion of the ProIndicus financing proceeds would be paid as 
improper payments to numerous senior-level government officials in Mozambique or as kickbacks to 
the CS Bankers. Following the closing of the ProIndicus transaction, on March 21, 2013, Credit 
Suisse transferred $327.9 million in loan proceeds to an Intermediary account in Abu Dhabi, and in 
June and August 2013, Credit Suisse made two additional transfers of loan proceeds into the same 
account, all through U.S. correspondent banks.  In total, Credit Suisse  transferred $547,463,200, 
including $446,950,800 that it arranged and $100,512,400 that was arranged by VTB, to the 
Intermediary, from which bank records of the Intermediary reflect that improper payments were 
made to Mozambican officials and the Intermediary Agent and others, and kickbacks to the CS 
Bankers. 
 
14. Shortly after the first transfer to the Intermediary in March 2013, Intermediary bank 
records indicate transfers of over $80 million to accounts controlled by Mozambican government 
officials and others relating to the transaction. The transfers included a transfer of $50 million from 
which a relative of a high-level government official shared part of the payment with key government 
officials, who approved the transaction and authorized the-then Minister of Finance to sign the 
guarantee.  Intermediary bank records reflect additional improper payments, including, for example, 
$13 million paid to government officials holding senior positions at ProIndicus and a $5 million 
payment to a senior official who reported to the-then President of Mozambique. 
 
15. The CS Bankers were able to carry out the scheme as a result of deficiencies in 
Credit Suisse’s  internal accounting controls, unreasonable reliance on the CS Bankers to structure 
the deal, and inadequate appreciation of bribery risks that came to the attention of the bank’s 
reputational risk, credit risk and compliance groups. The CS Bankers, for example, structured the 
financings to transfer all proceeds directly to accounts controlled by the Intermediary in Abu Dhabi 
rather than to the borrower in Mozambique.  Credit Suisse also transferred the funds directly to the 
Intermediary despite being aware of allegations of corrupt practices concerning the Intermediary.  
 
16. The Bank’s financial crime compliance group commissioned and received a third-
party diligence report that quoted an anonymous source describing the Intermediary’s principal 
(“Intermediary Principal”) as a “master of kickbacks” and included other information, including: 

 
a. “All sources we  spoke  to about  [Intermediary Principal] were confident of  his  past and 
continued  involvement in offering and receiving bribes and kickbacks” and “raised 
concerns  about the  integrity  of [Intermediary Principal’s] business practices,” and  that 
“[Intermediary Principal] was heavily involved in corrupt practices.” 
b. “Another banking source close to a Lebanese commercial bank that previously dealt with 
[Intermediary Principal and his brother] and the [Intermediary] group of companies stated: 
‘[Intermediary Principal] is  a first-class  deal  maker  and  an  expert  in  kickbacks,  bribery 
and corruption.’” 
 
17. The information provided to the compliance team in their diligence efforts also 
included that the Intermediary Principal’s business was being conducted “in a more classical way, 
more in compliance with the rules of ethics.”  A source also reported that UAE authorities were not 
aware of information tying the Intermediary to corrupt practices, and that the Intermediary 
Principal had been removed from a screening service due to the age of some of the allegations 
against him.  Credit Suisse, nonetheless, acted unreasonably in failing to properly consider the 
totality of bribery risks surrounding the transaction that came to its attention.   
 
18.  In March 2013, a Director in the Bank’s Europe, Middle East and Asia (“EMEA”) 
group warned that Intermediary Principal was an “undesirable client” for the bank and he and his 
entities had been, in the past, “obviously involved in corrupt practices.” EMEA advised against 
providing the financing “given that we are not comfortable with Intermediary Principal and his 
entities” and recommended rejecting any financing that involved the Intermediary Principal and his 
entities because of corruption risks.  In November 2012, an email among Banker 1 and Banker 2 and 
an EMEA Managing Director and Director stated “[the EMEA CEO] said no to the combination of 
Moz[ambique] and your friend [Intermediary Principal], so we need to structure him out of the 
picture.”  
 
The EMATUM LPN Offering 
 
19. Credit Suisse and VTB acted as joint-lead managers and underwriters for an $850 
million offering for securitized LPNs issued by EMATUM, a newly formed state-owned entity 
controlled by the government of Mozambique. EMATUM was created as a tuna-fishing company 
and entered into a $768 million contract, dated August 2, 2013, to purchase vessels and equipment 
from an affiliate of the Intermediary (“Intermediary Affiliate”).  The interest-bearing LPNs were sold 
in two tranches: (1) $500 million that was underwritten and offered by Credit Suisse in September 
2013 on a firm commitment basis; and (2) $350 million that was underwritten and offered by VTB in 
October 2013.  Credit Suisse, as the lead underwriter and selling agent for EMATUM, held the 
$500 million on its books until the notes were sold to investors.   
 
 20.  The EMATUM project was originally conceived as a $250 million project, but, over 
the space of two weeks, the amount of the proposed project grew to $850 million, which provided 
more funds to be available for kickbacks and improper payments. In order to maximize the sales of 
the securitized debt, Credit Suisse marketed the offering to the international bond market, which 
included funds advised by United States investment advisers, and U.S investors in the secondary  
 

 
market.  The then-Minister of Finance, again, signed a guarantee on behalf of Mozambique for this 
transaction, though Mozambique has since disputed the validity of the guarantees. 
 
The Improper Payment Scheme 
 
21. The Offering Circulars for EMATUM’s issuance of LPNs were created and drafted 
by Credit Suisse and provided by Credit Suisse to investors.  The Offering Circulars  disclosed that 
the proceeds would be used “towards the financing of the purchase of fishing infrastructure, 
comprising of 27 vessels, an operation center and related training and for the general corporate 
purposes of the Borrower [...]” and falsely disclosed that EMATUM would not “use the proceeds of 
any Loan, or make available to any person, for the purpose of financing or facilitating any activity 
that would violate Anti-Corruption Laws, or in any way which constitute a Corrupt Act.” 
 
22. As with ProIndicus, EMATUM, through the acts of the CS Bankers, was used as a 
vehicle to divert proceeds to themselves as kickbacks and make improper payments to government 
officials through the Intermediary.  The CS Bankers also hid the underlying corruption and 
kickback scheme from other members of Credit Suisse management. For example, in a July 26, 
2013 email using non-Credit Suisse email accounts, the Intermediary Agent informed Banker 1 and 
Banker 2: “Bro for fish: [Intermediary Affiliate] contract 750 and 50 between [Intermediary Related 
Entity] and MoF [Minister of Finance]?” In a subsequent July 2013 email, the Intermediary Agent  
advised the CS Bankers that the EMATUM financing would need to be increased from $750 million 
to $825 million in order to include a cushion for payments to government officials, stating: “825 
please. 25 on top of the 50 to the borrower.” Further, a spreadsheet maintained by Intermediary 
reflects over $600 million as payable to an account controlled by Intermediary Principal, with over 
$100 million being paid to government officials and others involved in the approval process.   
 
23. Following instructions out of Mozambique that the structuring should be designed to 
“prevent any defaulting situation in the repayment obligations," the Intermediary Agent, Banker 1 and 
Banker 2 also discussed $51 million as part of the $850 million EMATUM financing in order to 
cover interest payments that ProIndicus and EMATUM were obligated to pay in March and 
September 2014.  In an email dated July 21, 2013, the Intermediary Agent discussed with Banker 1 
and Banker 2 on their personal emails, “[w]e will go for $800 million so we can keep a cushion for 
ProIndicus interest payment next year.”  They also discussed “we should keep a cushion for 
ProIndicus of $17m so that we don’t need to go back to MoF [Minister of Finance] and they are on 
our side” and “we need to keep an interest cushion of 18 months for the bond interest payments so 
that everyone is comfortable the bond doesn’t default until the fleet is up and running.” ProIndicus 
lacked the ability to meet its interest obligations and the cushion allowed the corruption scheme to 
continue undetected, as a default on ProIndicus interest payments would have caused investors to 
question the legitimacy of EMATUM.   
 
24. In two separate transfers on September 11 and October 11, 2013, Credit Suisse sent 
$759.8 million from LPNs the bank purchased directly to an Intermediary controlled account in Abu 
Dhabi, through a U.S. correspondent bank.  Until mid-October, when Credit Suisse finished selling 
the entire note offering, the unsold portion of the securitized debt from the firm commitment 
offering remained on its books.   

 
 
 
25. The CS Bankers were able to carry out the scheme as a result of deficiencies in the 
bank’s internal accounting controls, unreasonable reliance on the CS Bankers to structure the deal 
and inadequate response to bribery risks that came to the attention of the bank’s reputational risk, 
credit risk and compliance groups.  Despite identified risks, Credit Suisse structured the financings to 
transfer all proceeds directly to accounts controlled by the Intermediary in Abu Dhabi rather than to 
the borrower in Mozambique. 
 
26. From the Proindicus and EMATUM loan proceeds, the Intermediary made improper 
payments to the Intermediary Agent and Mozambican government officials and paid kickbacks to the 
CS Bankers.  The Intermediary paid $45 million to Banker 1, who in turn paid $2 million to Banker 
3 and $2.2 million to Banker 2. In addition, the Intermediary paid $3.7 million to Banker 3 directly. 
Mozambique officials received payments from Intermediary totaling approximately $150 million, 
including, but not limited to, $5 million paid to an official involved in approving the transaction, $8.8 
million to a relative of a senior government official, and $11.9 million to a government official who 
was also an officer of EMATUM.  
 
Credit Suisse Goes Forward with the Offering Despite Risks 
 
27. At the time of the EMATUM LPN offering, based on the ProIndicus due diligence 
review, Credit Suisse understood the corruption risks associated with Intermediary Principal and 
Intermediary Affiliate.  The EMATUM LPN offering presented virtually identical irregularities and 
risks as the ProIndicus transaction. The transaction involved another maritime contractor affiliated 
with the same Intermediary Principal who was identified as potentially corrupt; Credit Suisse remitted 
funds to an entity controlled by Intermediary Principal instead of Mozambique or the state-owned 
entity obtaining the securitized financing; and the financing had not gone through an approval process 
with the Mozambique parliament 
 
28. In connection with the EMATUM offering, Credit Suisse prepared an approval 
memorandum for its European Investment Banking Committee (“EIBC”), which highlighted a 
number of risks with respect to the transactions, including that all the funds would be remitted to an 
account controlled by Intermediary Principal. 
 
29. Credit Suisse also learned that a due diligence questionnaire in connection with the 
ProIndicus transaction reflected that Intermediary and its related entities were not selected from a 
competitive bidding process, but rather, from “high level connections” between Intermediary and 
the Mozambican government. Although Banker 3 provided falsified competitive bid information 
for the EMATUM project, Credit Suisse did not perform sufficient due diligence concerning the 
Intermediary Principal or his entities in connection with the EMATUM transaction. Further, Credit 
Suisse agreed to the total financing amount, including the $51 million increase for covering interest 
payments for which ProIndicus was responsible, without determining how the additional funds to 
the Intermediary would be utilized.  
 
30. A memo was prepared for the Credit Risk Management Committee (“CRM”), which 
stated that, as had been the case with the ProIndicus financing in March 2013, because the 

 
EMATUM financing was not a direct obligation of Mozambique, it would “not be included in the 
government’s debt outstanding and will not [as it is a contingent obligation] be reflected in the state 
budget.” As a result, investors could not have ascertained the impact that the financing would have on 
Mozambique’s debt level and risk of default through IMF reporting. 
 
31. Despite the due diligence failures, Credit Suisse’s CRM function, EIBC and 
Reputational Risk function, which included an Anti-Money Laundering review, approved the 
transaction in August 2013.  In connection with the EMATUM transaction, Banker 3 signed 
transaction documents on behalf of Credit Suisse.  
 
32. The Credit Suisse U.K. entities were subject to examinations by the U.K.’s 
Prudential Regulation Authority (PRA) which, in October 2013, identified a number of reputational 
risk process shortcomings based on an examination of the ProIndicus transaction.  The PRA found 
that the bank maintained “an informal reputational risk committee and light reputational risk process” 
which “lacked a holistic overview and insight of the risks that we would expect to be present in a 
formal committee,” and had a “status quo culture and lacked a forward looking credit risk strategy.”   
Although the exam did not find unacceptable reputational or credit risk, it did disclose a number of 
additional credit risk management weaknesses and directed the bank to promptly remediate.  
 
Disclosure Failures 
 
33. The EMATUM LPN offering document created by Credit Suisse stated: “No 
statement is made in this offering circular about the creditworthiness of Mozambique. Any 
prospective investor must make their own investigations relating to the creditworthiness of 
Mozambique.” Credit Suisse, however, knew that it structured, underwrote and provided $504 million 
in debt to a state-owned entity, ProIndicus, and that VTB had provided an additional $118 million in 
debt to ProIndicus. Because the IMF and the Mozambican parliament were excluded from the 
transaction, the ProIndicus debt did not appear on IMF Country Reports and was not otherwise 
publicly known.  As such, investors would have looked to the offering disclosures created by Credit 
Suisse for this information.  Given that investors understood that the financing to EMATUM was 
guaranteed by Mozambique, they viewed it as a sovereign obligation, making the country’s total 
indebtedness highly material because it increased the risk of default on the LPNs. 
 
34. Although the EMATUM LPN offering document disclosed the possibility that 
Credit Suisse maintained lending and other relationships with Mozambique and affiliated entities, 
in failing to specifically disclose the ProIndicus loan, the offering document used by Credit Suisse to 
sell EMATUM LPNs also failed to disclose Credit Suisse’s conflict of interest with EMATUM 
bondholders. At the time of the EMATUM transaction, Credit Suisse understood that Mozambique 
had interest obligations to Credit Suisse which was not disclosed to the EMATUM investors.  Under 
the terms of the ProIndicus loan at the time, Credit Suisse, as a creditor, would be repaid in March 
2019, before the EMATUM notes matured in September 2020. The offering materials created by 
Credit Suisse, however, did not disclose that Credit Suisse could be paid in full on the ProIndicus 
loan 18 months before the EMATUM noteholders.  These disclosures failures rendered the offering 
materials false and misleading. 
 

 
 
IMF Discovery of the EMATUM Transaction 
 
35. Starting in late September 2013, several news outlets reported that proceeds from the 
EMATUM LPN transaction had been allegedly diverted towards Mozambique’s procurement of 
military vessels from a French shipyard owned by the Intermediary Principal. Based on this 
reporting, the IMF, for the first time, became aware of the EMATUM loan underlying the LPNs that 
had been guaranteed by the Minister of Finance and the use of proceeds of the loan.   As a 
consequence, the IMF required Mozambique to include $500 million from the EMATUM obligation 
as defense spending in the country’s budget. 
 
36. In its country reports on Mozambique from January 2014 through 2015, the IMF 
noted several risks and concerns surrounding the EMATUM transaction.  In the January 2014 and 
August 2015 country reports, the IMF noted “the lack of transparency regarding the [EMATUM] use 
of funds and the secretive manner in which the project was evaluated, selected, and implemented 
outside the government’s macro-economic strategy [...]” and that the project  “raised serious 
governance concerns.” In its December 2015 IMF Staff Report, the IMF warned of the need to limit 
additional new government guaranteed debt and monitor state-owned enterprises.  The ProIndicus 
transaction, which was structured in a similar manner to EMATUM, was not included in any IMF 
publication.   
 
The 2014 ProIndicus Extension Transaction 
 
37. In December 2014, Credit Suisse entered into another transaction with ProIndicus to 
restructure and extend the interest and principal payment terms under the facility agreement 
(“Extension”) from 2019 to 2021. The Extension agreement also increased the facility amount that 
ProIndicus was able to borrow from $622 million, which had already been funded by Credit Suisse 
and VTB, to $900 million. At the time, Credit Suisse was carrying approximately $277 million in 
debt owed by ProIndicus. 
 
38. At the time of the Extension, Credit Suisse was aware of several risks and continued 
to maintain deficient internal accounting controls. Specifically, Credit Suisse was aware that: (a) 
ProIndicus was operating at a loss, was about to default on its next interest payment, and that its 
auditor had doubts concerning its ability to continue as a going concern; (b) the due diligence for the 
ProIndicus and EMATUM deals had revealed potential risks that the transactions could be executed 
outside of management’s general or specific authorization; (c) press outlets had reported that funds 
from the EMATUM LPN financing (which was structured similarly to ProIndicus), may have been 
diverted; and (d) Bankers 1 and 2,who had structured the ProIndicus deal, had left Credit Suisse to 
work at an entity (“Intermediary Related Entity”), owned and controlled by Intermediary Principal—
and were now representing Mozambique in negotiating the Extension.  In approving the Extension 
transaction despite these risks, Credit Suisse failed to provide reasonable assurance that the 
transaction was executed in accordance with management’s general or specific authorization and 
continued to maintain books and records that did not reflect the true nature of the loan and use of 
proceeds.     
 
 

 
The 2016 Exchange Offer 
 
Background Events Leading to the Exchange Offer 
 
39.   By 2014, Mozambique was unable to service the nearly $2 billion in debt that had 
been amassed through the ProIndicus, EMATUM LPN and MAM transactions. By year-end 2014, 
EMATUM failed to generate significant revenue and its audited financials reflected that it had 
incurred $24.5 million in losses. By this time, the press had also reported on EMATUM’s poor 
financial condition and that EMATUM would miss its first amortization payment on the LPNs, due 
in September 2015.  By 2015, in addition to the risk of default by EMATUM, Credit Suisse learned 
of several potential reputational and financial risks, given its role in underwriting, distributing, 
marketing and selling the notes. 
 
40. In July 2015, Credit Suisse, VTB and the government of Mozambique began 
discussions regarding restructuring the EMATUM LPNs to a sovereign bond issued by Mozambique 
that was non-amortizing, with extended repayment terms.  In internal emails, Credit Suisse personnel 
advocated leading the Exchange Offer to allow the Bank to “maintain control of the situation,” and 
that it would be detrimental from “a Reputational Risk perspective” if another bank were brought in 
to “clean up” the trade. Involvement in restructuring of the notes also allowed Credit Suisse to 
protect its interests as a ProIndicus creditor.  Credit Suisse personnel, for example, noted that “the 
impact of any EMATUM default on ProIndicus is significant, particularly given the issue of cross-
default. . . [and] [t]his re-emphasizes the importance of us [Credit Suisse] being involved in the 
exchange/restructuring.” 
 
41. In discussions leading up to the Exchange Offer, Credit Suisse risk management 
personnel noted that EMATUM had been characterized in the public press as Mozambique’s “worst 
ever corruption scandal,” that there were allegations of “mismanagement and misappropriation,” that 
the transaction had been consummated “in secret without going through the normal parliamentary 
channels,” and that there were allegations that equipment received had been “overpriced and not fit 
for purpose... and that the overpricing profited government ministers.”  In response, Credit Suisse 
conducted due diligence on the Exchange and underlying EMATUM LPN transaction. 
 
42.  Bankers 1 and 2, two years prior to this time, left Credit Suisse to work for the 
Intermediary Related Entity, while Banker 3 remained a Credit Suisse managing director, but 
continued to hide the underlying corruption and kickback scheme from other members of Credit 
Suisse management, including those responsible for the Exchange Offer.  In connection with the 
Exchange Offer, Banker 1 and Banker 2 now represented the Republic of Mozambique, which had 
retained Intermediary Related Entity, to lead discussions with Credit Suisse and VTB concerning 
the offering, including the disclosure of Mozambique’s debt. In a September 7, 2015 email, a 
Credit Suisse director noted the involvement of Bankers 1 and 2 on behalf of Mozambique created 
“sensitivity.”  
 
43. On March 9, 2016, the Exchange Offer was announced and Credit Suisse 
subsequently prepared and distributed Mozambique’s offering materials to solicit consent from 
investors in the EMATUM LPNs. The Exchange Offer allowed investors of LPNs, of which 
approximately 39% were U.S. investors who had made purchases on the secondary market, to 

 
exchange the EMATUM notes for new bonds issued directly by the government of Mozambique. In 
mid-March, Credit Suisse participated in road shows in New York and London, where the 
Mozambican Minister of Finance at the time represented to investors that the information 
memorandum contained in the offering materials included the total amount of the debt of 
Mozambique, including all guarantees. By March 23, 2016, bondholders voted in favor of the 
Exchange Offer and the results were announced on April 1, 2016. 
 
Material Misrepresentations and Omissions in the Exchange Offer  
 
Conflicts of Interest 
 
44. The Exchange Offer offering materials prepared by Credit Suisse failed to properly 
disclose Credit Suisse’s conflicts of interests in having rights as a creditor under the ProIndicus 
transaction that were, in certain respects, adverse to investors. The Exchange Offer extended 
Mozambique’s repayment obligations to investors to 2023 (when the bond matured), but 
Mozambique was obligated to pay Credit Suisse and VTB interest and principal under the ProIndicus 
loan before making payments on the notes to investors. In 2014, after Credit Suisse became aware 
that ProIndicus had not earned revenue, the bank restructured the ProIndicus loan to extend the 
maturity to 2021 (from 2019), two years before the Exchange Offer bond matured. In addition, the 
offering materials failed to disclose VTB’s financing to MAM and VTB’s similar conflict of interests 
in having interests under the ProIndicus and MAM loans that were, in certain respects, adverse to 
noteholders. While the offering documents for the Exchange Offer included disclosures that Credit 
Suisse was a party to other financing agreements, the conflict of interest—that the bank was a major 
creditor under the ProIndicus transaction with interests, in certain respects, adverse to noteholders—
was not specifically disclosed.  The disclosure failures rendered the offering materials false and 
misleading. 
 
45. Several internal communications reflect that Credit Suisse gave consideration to its 
interests as a creditor in the ProIndicus transaction and in retaining business interests with 
Mozambique in its dealings on the Exchange Offer, as well as the risk that alienating Mozambique 
could impact the country’s cooperation with the bank’s due diligence efforts.  A January 29, 2016 
internal email, for example, stated: “If we cancel our involvement with the bond Mozambique will 
not cooperate with us at all going forward on anything including providing us with information on 
the Trimarans & Tuna Boats. In addition we need Moz to cooperate with us on other interests in 
Moz (eg ProIndicus Loan).” Another email similarly stated “[s]hould we alienate Mozambique they 
will not cooperate.” In a February 9, 2016 email, several senior bank employees discussed “key 
priorities” that the bank must “ensure our investors (and ourselves) are looked after under EMATUM 
LPNs [loan participation notes]...and under ProIndicus Loan” and recognized that, under both 
transactions, Mozambique had interest payments coming due in March 2016. 
 
46. As early as July 2015, the bank’s reputational risk group warned about risks 
associated with Credit Suisse’s continued association with Mozambique following the EMATUM 
“bad deal.” Credit Suisse, in fact, recognized that the “reputational damage would be significant if CS 
wasn’t involved in restructuring the deal and another bank was brought in instead.”  Other emails 
discussed that the “EMATUM transaction has proved problematic from (i) a media perspective.... 
and use of proceeds’” and, as a result, Credit Suisse needed to remain involved in the Exchange 

 
Offer and “look after our investors...protect our exposures...protect our reputation...resolve any 
outstanding queries with respect to [due diligence].” 
 
47. The offering materials created by Credit Suisse also failed to disclose the ProIndicus 
loan to investors. Even though the ProIndicus transaction was specifically disclosed in earlier drafts 
of the offering materials, a member of the deal team instructed that all references to the transaction be 
removed.  The ProIndicus loan documents included a confidentiality clause.  An email between a 
senior bank official and Banker 2 states that “WE CAN’T DISCLOSE THE TERMS OF PRIVATE 
CONTRACTS.”   
 
Diversion of Funds 
 
48. The offering materials prepared by Credit Suisse for Mozambique’s Exchange Offer 
disclosed that the press had reported that proceeds from the EMATUM LPNs were used to purchase 
defense equipment rather than tuna boats and, thus, “called into question whether all of the proceeds 
of the issuance of the Existing Notes were used for authorized or appropriate purposes.” The 
disclosure also noted that “EMATUM ha[d] experienced losses” that create risks surrounding the 
ability to service the notes. 
 
49. In preliminary due diligence concerning the Exchange Offer, Credit Suisse’s Bribery 
and Anti-Corruption  (“BACC”) and Sustainability Affairs functions were concerned about the use of 
proceeds from the original EMATUM transaction and noted “too many significant disparities” 
between the value of equipment received and the invoices for that equipment. BACC conditioned 
approval of the Exchange on completing a reconciliation of the gaps concerning the use of proceeds 
and “whether there is a duty to disclose any of the findings to the noteholders.” Credit Suisse, 
however, failed to conduct the reconciliation process outlined in the email. 
 
50. A reputable auditing firm had conducted an audit of EMATUM and called attention 
to the “loss of over half of the share capital” of the company. In January 2016, the bank also retained 
an outside appraiser to conduct a valuation of the boats purchased from the proceeds of the 
EMATUM financing. In February 11, 2016 email, a Credit Suisse director (the “Valuation Director”) 
responsible for the valuation, reported to management that the valuation “[r]esults have not been 
satisfactory.” The appraisal revealed that, out of the total $500 million in equipment funded by 
Credit Suisse, only $336-$480 million in boats and related equipment had been delivered while the 
rest was unaccounted for. As reflected in a July 2015 email, the bank also understood that funds 
from EMATUM were used to procure patrol vessels rather than fishing vessels, as had been part of 
the original project plan.  The appraisal also opined that the vessels were generally well constructed 
and suited to the project and should be able to “earn their keep” if and when properly deployed. 
 
51. On calls, Banker 3 discussed with the Valuation Director that “this one is going to 
be ugly,” and “I know you don’t have a choice, but I really wish we didn’t have this valuation,” to 
which the Valuation Director  responded that “we need to make sure we keep the facilities paid.” 
Days before receiving the valuation the Valuation Director told Banker 3 that he thought “BACC are 
going to close us down. I think they will prevent us from doing the bond.” Banker 3 acknowledged 
that “if we shut down the bond it will impact ProIndicus as well.” 
 

 
52. Credit Suisse personnel identified a “significant shortfall” of between $265 and $408 
million in the proceeds of the original transaction and the value of the boats and equipment received. 
By a February19, 2016 email, the Valuation Director forwarded to senior employees, including 
Banker 3, a spreadsheet that showed a difference of at least $265.4 million from the EMATUM 
proceeds and a high-end estimate value of the boats and equipment received ($435 million), and fees 
and interest payments made ($149.6 million) under the $850 million EMATUM LPN facility. 
 
53. A March 8, 2016 memorandum prepared in connection with the approval of the 
Exchange Offer for the Credit Suisse Global Investment Banking Committee noted as risk factors that 
“EMATUM may have been overcharged” for the boats and other equipment received in connection 
with the original EMATUM financing and that the “funds were disbursed directly to the Contractor.” 
 
Debt Levels and Risk of Default 
 
54. Credit Suisse knew or should have known that the debt disclosures provided by 
Mozambique and its counsel, which were included in the offering materials, failed to properly 
disclose Mozambique’s total debt levels.  Mozambique’s total debt was a material disclosure item 
because it determined the government’s risk of default and creditworthiness in connection with the 
Exchange Offer. The credit risk memorandum prepared in connection with the prior EMATUM LPN 
offering, however, stated that the EMATUM debt, as with the ProIndicus debt, “will not be included 
in the government’s debt outstanding and will not be reflected in the state budget.” In following this 
approach, the disclosures in the offering materials for the Exchange Offer on Mozambique’s level of 
indebtedness were misleading and omitted the amounts arising from the ProIndicus transaction and 
the $535 million MAM transaction that Credit Suisse had discovered by August 2015, and which had 
not been disclosed to the Mozambique parliament and IMF.  Instead, the disclosures in the offering 
documents prepared by Credit Suisse merely included a series of debt tables, which did not properly 
disclose the true nature of Mozambique’s debt and significant risk of default. 
 
55. At an early stage in the debt disclosure process, the deal team working on the 
Exchange Offer understood that Mozambique and Banker 1, who was now employed by the 
Intermediary Related Entity retained by Mozambique, had “reluctance... to disclose ProIndicus & 
MAM loans in the prospectus” and the “sensitivity” to public disclosure of the MAM transaction, 
which was “private & unlikely to be disclosed in detail.” In a phone conversation with Banker 3, the 
Valuation Director stated that “one of the key issues is that in the prospectus of the bond, they are 
required to make complete disclosure of what they have, and obviously they have two facilities, one 
is ProIndicus and one is MAM, which is 540 million, which they don’t want to disclose.” As a result, 
Credit Suisse failed to name the ProIndicus or MAM deals in the offering materials. 
 
56. The Credit Suisse deal team, on several occasions, discussed Mozambique’s desire 
to avoid transparency and not disclose the ProIndicus and MAM debt in the debt disclosures. In a 
February 28, 2016 email, for example, Credit Suisse discussed with VTB that it is “not good tactics 
to show direct and ppg [guaranteed debt] figures side by side as it will call attention to the fairly large 
gap ie size of gtees [guarantees].” The email goes on to state that investors can compare these figures 
up against public reports “but we shouldn’t make it glaringly easy for them.” The side by side display 
would have called into question the size of the guaranteed debt, including the ProIndicus and MAM 
amounts. 

 
 
57. The Credit Suisse deal team also understood that the debt figures provided by 
Mozambique could not be reconciled against their due diligence, concluding that they were 
“misleading” and contained “inconsistencies,” and that the public numbers in the prospectus “still 
have mistakes.” The bank also discussed concerns of a “renewed rush” and “unrealistic timing” 
pressures that Banker 1, on behalf of Mozambique, had imposed in connection with the bank’s due 
diligence on making the debt disclosures. 
 
58. Despite risks and red flags presented, the bank unreasonably accepted Mozambique’s 
contention that the debt figures in the January 2016 IMF country report were accurate and inclusive 
of all guarantees, and the final disclosure materials did not need to include an itemized list of the prior 
non-public debts.  Credit Suisse accepted the debt as presented by Mozambique and its counsel.    As 
reflected in a February 12, 2016 email, a Credit Suisse deal team member informed his team that 
Mozambique’s “issuer team” represented that “the debt figures used in IMF reports is inclusive of all 
guaranteed debt” and reasoned that “[g]iven that the gross figures are all inclusive, there will be no 
itemized disclosure on the guarantees.” The representation was provided by the-then Minister of 
Finance in a letter to Credit Suisse.  
 
59. Credit Suisse, however, knew or should have known that the debt figures used in the 
IMF country report did not include ProIndicus or MAM, based on: (1) the fact that neither 
transaction, unlike EMATUM, was referenced in any of the IMF’s country reports; (2) the bank 
internally noted that “letter still doesn’t match the IMF report;” (3) bank personnel repeatedly 
discussed the need to keep the ProIndicus transaction “private” and undisclosed; and (4) had the 
ProIndicus and MAM deals been disclosed to the IMF, Mozambique might have been forced by the 
IMF to include the indebtedness as a line item on the country’s budget (as it did when it discovered 
the EMATUM transaction). 
 
Discovery of the True Level of Indebtedness and Mozambique’s Default on the Bond 
 
60.      On April 3, 2016, after press reports regarding the existence of other guaranteed 
debt, the government of Mozambique disclosed the existence of the ProIndicus and MAM Loans. On 
April 23, 2016, the IMF announced that Mozambique’s previously undisclosed indebtedness totaled 
$1.35 billion, including the $622 million loan to ProIndicus and the $535 million loan to MAM  
 
61.      In June 2016, the IMF and 14 other donor groups suspended lending and aid 
packages to Mozambique, and the IMF called for an independent audit of ProIndicus, EMATUM, and 
MAM. In June 2017, the audit report, conducted by an international auditing firm, concluded that it 
could not account for $713 million when comparing the Intermediary invoices and the market price of 
the boats that were purportedly provided in the ProIndicus and EMATUM transactions. Earlier, in 
January 2017, when its debt constituted 112% of its GDP, Mozambique announced that it would 
default on its debt obligations and, since then, has not made any payments on the ProIndicus, 
EMATUM or MAM debts. 
 
 

 
Violations and Findings 
 
 
62. As a result of the conduct described above as it relates to the EMATUM LPN 
offering, the Commission finds that Credit Suisse violated Section 10(b) of the Exchange Act, and 
Rule 10b-5 thereunder which prohibits any person, directly or indirectly, by the use of any means or 
instrumentality of interstate commerce, or of the mails or of any facility of any national securities 
exchange, in connection with the purchase or sale of any security (a) to employ any device, scheme, 
or artifice to defraud, (b) to make any untrue statement of a material fact or to omit to state a material 
fact necessary in order to make the statements made, in the light of the circumstances under which 
they were made, not misleading, or (c) to engage in any act, practice, or course of business which 
operates or would operate as a fraud or deceit upon any person. 
 
63. As a result of the conduct described above as it relates to the EMATUM LPN 
offering, the Commission finds that Credit Suisse violated Section 17(a)(1) of the Securities Act, 
which proscribes, in the offer or sale of any security, the employment “of any device, scheme, or 
artifice to defraud.” 
 
64. As a result of the conduct described above as it relates to the EMATUM LPN and 
Exchange Offer, the Commission finds that Credit Suisse violated Section 17(a)(2) of the Securities 
Act, which proscribes, in the offer or sale of any security, obtaining “money or property by means of 
any untrue statement of a material fact or any omission to state a material fact necessary in order to 
make the statements made, in light of the circumstances under which they were made, not 
misleading.”  Credit Suisse also violated Section 17(a)(3) of the Securities Act, which proscribes, in 
the offer or sale of any security, engaging “in any transaction, practice, or course of business which 
operates or would operate as a fraud or deceit upon the purchaser.” 
 
65. As a result of the conduct described above, the Commission finds that Credit Suisse 
violated Section 13(b)(2)(A) of the Exchange Act, which requires issuers that have a class of 
securities registered pursuant to Section 12 of the Exchange Act and issuers with reporting 
obligations pursuant to Section 15(d) of the Exchange Act to make and keep books, records, and 
accounts which, in reasonable detail, accurately and fairly reflect their transactions and disposition of 
their assets. 
 
66. As a result of the conduct described above, the Commission finds that Credit Suisse 
violated Section 13(b)(2)(B) of the Exchange Act, which requires issuers that have a class of 
securities registered pursuant to Section 12 of the Exchange Act and issuers with reporting 
obligations pursuant to Section 15(d) of the Exchange Act to devise and maintain a system of 
internal accounting controls sufficient to provide reasonable assurances that (i) transactions are 
executed in accordance with management’s general or specific authorization; (ii) transactions are 
recorded as necessary (I) to permit preparation of financial statements in conformity with generally 
accepted accounting principles or any other criteria applicable to such statements, and (II) to  
maintain accountability for assets; (iii) access to assets is permitted only in accordance with 
management’s general or specific authorization; and (iv) the recorded accountability for assets is 
compared with the existing assets at reasonable intervals and appropriate action is taken with respect 
to any differences. 

 
 
 
Disgorgement and Civil Penalties 
 
67. The disgorgement and prejudgment interest ordered in paragraph IV.B is consistent 
with equitable principles and does not exceed Respondent’s net profits from its violations and will 
be distributed to harmed investors, if feasible through a Fair Fund. The Commission will hold 
funds paid pursuant to paragraph IV.B in an account at the United States Treasury pending a 
decision whether the Commission in its discretion will seek to distribute funds. If a distribution is 
determined feasible and the Commission makes a distribution, upon approval of the distribution 
final accounting by the Commission, any amounts remaining that are infeasible to return to 
investors, and any amounts returned to the Commission in the future that are infeasible to return to 
investors, may be transferred to the general fund of the U.S. Treasury, subject to Section 21F(g)(3) 
of the Exchange Act. 
 
68. In determining to accept the Offer, the Commission considered Credit Suisse’s 
substantial remedial efforts.  Credit Suisse has engaged in a review and remediation of its internal 
controls and procedures relating to the integration of its compliance functions.  This includes the 
establishment of a U.K. Financial Crime Advisory team to conduct due diligence from a financial 
crimes perspective, and the establishment of a Global Focus Client Committee to assess client risks 
from a compliance perspective.  Credit Suisse also proactively worked with peer banks, civil 
society organizations, and various international organizations on the design and establishment of a 
transparent lending portal program, as endorsed by the G7. 
 
IV. 
 
In view of the foregoing, the Commission deems it appropriate to impose the sanctions 
agreed to in Respondent Credit Suisse’s Offer. 
 
Accordingly, it is hereby ORDERED that: 
 
A. Pursuant to Section 8A of the Securities Act and 21C of the Exchange Act, Respondent cease 
and desist from committing or causing any violations and any future violations of Sections 
10(b) and13(b) of the Exchange Act and Rule 10b-5 thereunder, and Sections 17(a) of the 
Securities Act. 
 
B. Respondent shall, within 10 days of the entry of this Order, pay disgorgement of $26,229,233 
and prejudgment interest of $7,822,639 to the Securities and Exchange Commission. The 
Commission will hold funds paid pursuant to this paragraph in an account at the United 
States Treasury pending a decision whether the Commission, in its discretion, will seek to 
distribute funds or, transfer them to the general fund of the United States Treasury, subject to 
Exchange Act Section 21F(g)(3). If timely payment is not made, additional interest shall 
accrue pursuant to SEC Rule of Practice 600. 
 
C. Respondent shall, within 10 days of the entry of this Order, pay a civil money penalty in the 
amount of $65,000,000 to the Securities and Exchange Commission. The Commission may 

 
distribute civil penalties collected in this proceeding if, in its discretion, the Commission 
orders the establishment of a Fair Fund pursuant to 15 U.S.C. § 7246, Section 308(a) of the 
Sarbanes-Oxley Act of 2002. The Commission will hold funds paid pursuant to this 
paragraph in an account at the United States Treasury pending a decision whether the 
Commission, in its discretion, will seek to distribute funds or, subject to Exchange Act  
Section 21F(g)(3), transfer them to the general fund of the United States Treasury.  If timely 
payment is not made, additional interest shall accrue pursuant to 31 U.S.C. §3717. Payment 
must be made in one of the following ways: 
 
(1) Respondent may transmit payment electronically to the Commission, which 
will provide detailed ACH transfer/Fedwire instructions upon request; 
 
(2) Respondent may make direct payment from a bank account via Pay.gov 
through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or 
 
(3) Respondent may pay by certified check, bank cashier’s check, or United 
States postal money order, made payable to the Securities and Exchange 
Commission and hand-delivered or mailed to: 
 
Enterprise Services Center 
Accounts Receivable Branch 
HQ Bldg., Room 181, AMZ-341 
6500 South MacArthur Boulevard 
Oklahoma City, OK 73169 
 
Payments by check or money order must be accompanied by a cover letter identifying 
Credit Suisse Group AG as a Respondent in these proceedings, and the file number of these 
proceedings; a copy of the cover letter and check or money order must be sent to Anita B. Bandy, 
Associate Director, Division of Enforcement, Securities and Exchange Commission, 100 F St., NE, 
Washington, DC 20549-6561. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
Regardless of whether the Commission in its discretion orders the creation of a Fair Fund for 
the penalties ordered in this proceeding, amounts ordered to be paid as civil money penalties 
pursuant to this Order shall be treated as penalties paid to the government for all purposes, including 
all tax purposes. To preserve the deterrent effect of the civil penalty, Respondent agrees that in any 
Related Investor Action, it shall not argue that it is entitled to, nor shall it benefit by, offset or 
reduction of any award of compensatory damages by the amount of any part of Respondent’s 
payment of a civil penalty in this action (“Penalty Offset”). If the court in any Related Investor 
Action grants such a Penalty Offset, Respondent agrees that it shall, within 30 days after entry of a 
final order granting the Penalty Offset, notify the Commission's counsel in this action and pay the 
amount of the Penalty Offset to the Securities and Exchange Commission. Such a payment shall not 
be deemed an additional civil penalty and shall not be deemed to change the amount of the civil 
penalty imposed in this proceeding. For purposes of this paragraph, a "Related Investor Action" 
means a private damages action brought against Respondent by or on behalf of one or more investors  
based on substantially the same facts as alleged in the Order instituted by the Commission in this 
proceeding. 
 
By the Commission. 
 
 
Vanessa A. Countryman 
Secretary 

UNITED STATES OF AMERICA 

Before the 

SECURITIES AND EXCHANGE COMMISSION 

 

 

SECURITIES ACT OF 1933 

Release No. 11001 / October 19, 2021 

 

SECURITIES EXCHANGE ACT OF 1934 

Release No. 93382 / October 19, 2021 

  

ADMINISTRATIVE PROCEEDING 

File No. 3-20629 

 

 

In the Matter of 

 

Credit Suisse Group AG 

Respondent. 

ORDER INSTITUTING CEASE-AND- 

DESIST PROCEEDINGS PURSUANT TO 

SECTION 8A OF THE SECURITIES ACT 

OF 1933 AND SECTION 21C OF THE 

SECURITIES EXCHANGE ACT OF 1934, 

MAKING FINDINGS, AND IMPOSING A 

CEASE-AND-DESIST ORDER 

 

I. 

 

The Securities and Exchange Commission (“Commission”) deems it appropriate that cease- 

and-desist proceedings be, and hereby are, instituted pursuant to Section 8A of the Securities Act of 

1933 (“Securities Act”) and Section 21C of the Securities Exchange Act of 1934 (“Exchange Act”), 

against Credit Suisse Group AG (“Credit Suisse” or “Respondent”). 

 

II. 

 

In anticipation of the institution of these proceedings, Respondent has submitted an Offer of 

Settlement (the “Offer”) which the Commission has determined to accept. Solely for the purpose of 

these proceedings and any other proceedings brought by or on behalf of the Commission, or to which 

the Commission is a party, Respondent admits the Commission’s jurisdiction over it and the subject 

matter of these proceedings, and consents to the entry of this Order Instituting Cease-and-Desist 

Proceedings Pursuant to Section 8A of the Securities Act of 1933 and Section 21C of the Securities 

Exchange Act of 1934, Making Findings, and Imposing a Cease-and-Desist Order (“Order”), as set 

forth below. 



 

III. 

 

On the basis of this Order and Respondent’s Offer, the Commission finds1 that: 

 

Summary 

 

1. This matter concerns an offering fraud and violations of the internal accounting 

controls and books and records provisions of the Foreign Corrupt Practices Act by Credit Suisse, 

from 2013 to 2016, in connection with three interconnected transactions involving, among others, 

United Kingdom-based Credit Suisse entities and Mozambican state-owned entities. The transactions 

include a syndicated loan and two securities offerings by Mozambican state-owned entities, the first of 

which Credit Suisse underwrote, structured, marketed and distributed, and the second of which Credit 

Suisse underwrote, structured, marketed and distributed as a joint lead manager with another 

international investment bank, VTB Capital plc (“VTB”).  Specifically, the transactions—the latter 

two of which are securities offerings—include: (1) a 2013 $622 million syndicated loan to a 

Mozambican state-owned entity known as ProIndicus S.A. (“Proindicus”), for which Credit Suisse 

provided $504 million in financing—and an extension of payment terms in a later, related 

transaction; (2) a 2013 $850 million offering of interest-bearing loan participation notes (“LPNs”) 

marketed and sold to the international bond market to finance debt offered to a second Mozambican 

state-owned entity known as Empresa Mocambicana de Atum S.A. (“EMATUM”), to which Credit 

Suisse also provided $500 million in financing; and (3) a 2016 bond offering by the Republic of 

Mozambique, commenced after Credit Suisse discovered several irregularities and risks associated 

with the EMATUM offering, that allowed investors to exchange their LPNs  for new sovereign 

bonds issued directly by the government of Mozambique (the “Exchange Offer”). The-then Minister 

of Finance signed a guarantee on behalf of Mozambique for the ProIndicus and EMATUM LPN 

transactions. Mozambique has since disputed the validity of the guarantees. 

 

2. Credit Suisse, through the actions of three former bankers, Banker 1, Banker 2, and 

Banker 3 (collectively, the “CS Bankers”) as further described herein,2 knew that ProIndicus and 

EMATUM were newly formed state-owned entities with no prior business operations. The ProIndicus 

and EMATUM projects were vehicles through which the CS Bankers and intermediaries received 

kickbacks and corrupt Mozambique government officials obtained bribes, which were paid by the 

intermediaries. The CS Bankers, who hid the corruption scheme and their kickbacks from other 

members of management, received kickbacks totaling at least $50 million.  Together with 

Mozambican government officials, the improper payments and kickbacks totaled at least $200 

million.    
 

3. The CS Bankers were able to carry out the long-running scheme as a result of Credit 

Suisse’s deficient internal accounting controls environment, in which the bank acted unreasonably 

in addressing bribery risks associated with the transactions.  By the time of the EMATUM LPN 

                                                   
1 The findings herein are made by the Commission in connection with Respondent’s Offer of Settlement and are not 

binding on any other person or entity in this or any other proceeding.  

 
2 The CS Bankers were indicted by the U.S. Attorney’s Office for the Eastern District of New York and each has 

entered a guilty plea. 

 



 

offering, Credit Suisse, through the actions of the CS Bankers, hid the underlying corruption scheme 

and drafted offering materials on behalf of Mozambique that falsely represented to investors that the 

proceeds would be used exclusively to develop the country’s tuna fishing industry and generate 

revenues to make principal and interest payments to investors. The offering materials drafted by 

Credit Suisse also failed to sufficiently disclose to investors its conflict of interest—that the bank 

was a major creditor under the ProIndicus transaction with interests, in certain respects, adverse to 

noteholders.  Further, Credit Suisse knew or should have known that the debt disclosures provided by 

Mozambique were false and misleading because they failed to disclose Mozambique’s true level of 

indebtedness and, relatedly, its risk of default on the notes and ability to pay back investors. These 

disclosure failures rendered the offering materials false and misleading.   

 

4. By 2016, after Credit Suisse learned that EMATUM would not be able to meet 

repayment obligations under the schedule provided for in the LPNs and of other red flags 

surrounding the transaction, Credit Suisse and VTB structured the Exchange Offer to allow investors 

to exchange the LPNs they already held for new sovereign bonds issued directly by the government 

of Mozambique. By the time of the closing, Credit Suisse knew the full scope of Mozambique’s 

debt from financing extended by VTB, including a $535 million 2014 loan to a third government-

owned entity known as Mozambique Asset Management (“MAM”) provided by VTB, as well as an 

additional $118 million to ProIndicus and $350 million to EMATUM funded by VTB.  The-then 

Minister of Finance, again, signed a guarantee on behalf of Mozambique for the MAM transaction, 

though Mozambique has since disputed the validity of the guarantee. 
 

5. In connection with the Exchange Offer, the offering materials prepared by Credit 

Suisse on behalf of Mozambique did not disclose to investors the true nature of Mozambique’s 

indebtedness and the magnitude of missing funds from the prior offering.  Specifically, the offering 

materials failed to accurately and fully disclose Mozambique’s indebtedness, including over $622 

million in financing that it and VTB had provided to Mozambique through the ProIndicus transaction 

and $535 million in financing that VTB had provided to MAM. The offering materials also failed to 

disclose to investors the existence of the ProIndicus and MAM transactions and the banks’ conflicts 

of interests relating to these transactions.  While the offering documents for the EMATUM and 

Exchange Offer included disclosures that Credit Suisse was a party to other financing agreements, 

the conflict of interest—that the bank was a major creditor under the ProIndicus transaction with 

interests, in certain respects, adverse to noteholders—was not specifically disclosed.  As a result, 

investors in EMATUM LPNs and the Exchange Offer were not provided with a complete and 

accurate picture of the true nature and magnitude of the country’s debt, the high risk of default on 

the LPNs and that Credit Suisse had placed its own interests as a creditor above bondholders. 

 

6. In April 2016, shortly after investors approved the Exchange Offer and after news 

reports on “secret” debt, Mozambique disclosed the ProIndicus and MAM transactions and the true 

nature of its guaranteed debt.  Simultaneously, it emerged that since, at least 2013, Mozambique 

had misrepresented its public and publicly-guaranteed indebtedness to the International Monetary 

Fund (“IMF”).  The IMF and other international donors halted financial support to Mozambique and, 

in turn, the country defaulted on the bonds 

 

7. The EMATUM LPN transaction is the basis for the violations of Exchange Act 

Section 10(b) and Rule 10b-5 and Securities Act Section 17(a)(1). The EMATUM and Exchange 



 

Offer transactions are the bases for violations of Securities Act Sections 17(a)(2) and 17(a)(3).  

From 2013 to 2016, Credit Suisse engaged in violations of the books and records and internal 

accounting controls provisions of the Exchange Act, including violations of the Foreign Corrupt 

Practices Act. 

 

Respondent 

 

8. Credit Suisse Group AG (“Credit Suisse” or “the Bank”) is a multinational 

investment bank and financial services company based in Switzerland. Credit Suisse’s American 

Depository Receipts are listed on the NYSE under the symbol “CS,” and its securities are registered 

with the Commission pursuant to Section 12(b) of the Exchange Act. The U.K. Credit Suisse entities 

involved in the underlying conduct include:  Credit Suisse International (“CSI”), Credit Suisse 

Securities (Europe) Limited (“CSSEL”), and Credit Suisse AG, London Branch (“CSLB”).  Credit 

Suisse is the direct or indirect holding company for Credit Suisse’s subsidiaries.  

 

Facts 

 

The ProIndicus Transaction 

 

9. On February 28, 2013, Credit Suisse agreed to arrange a $372 million syndicated 

loan to ProIndicus, a newly-formed company that was owned and controlled by the government of 

Mozambique. A few weeks before, on January 18, 2013, ProIndicus entered into a $366 million 

contract with an intermediary based in the United Arab Emirates (“Intermediary”) that was to provide 

equipment and services to ProIndicus in connection with certain maritime projects. Between June 

and August 2013, Credit Suisse agreed to upsize the loan to ProIndicus by an additional $132 

million, bringing the total financing amount to $504 million. The financing represented a landmark 

expansion for the bank’s footprint in the Sub Saharan Africa region. In November 2013, VTB 

extended another $118 million to ProIndicus, bringing the total amount of the financing to $622 

million.  Since inception of the loan, Credit Suisse has been the largest member of the loan syndicate.  

The then-Minister of Finance signed a guarantee on behalf of Mozambique for these transactions.  

Mozambique has since disputed the validity of the guarantee. 
 

10. ProIndicus was officially established to supply vessels and training to protect 

Mozambique’s coastline and maritime interests. The proceeds from the financing from Credit Suisse 

and VTB were supposed to be used exclusively for maritime projects known as the “Exclusive 

Economic Zone” project (the “Project”). The loan agreement specifically required ProIndicus to 

“apply all amounts borrowed by it under the Facility towards the financing of the …Project” and 

prohibited improper payments in violation of FCPA and other anti-bribery laws. 
 

11. In reality, ProIndicus was set up by Mozambican government officials acting in 

collusion with an agent of the Intermediary (“Intermediary Agent”) in order to carry out an extensive 

scheme involving improper payments to government officials and others. As part of the scheme that 

began in 2012, only a portion of the loan proceeds were applied towards maritime projects while the 

rest were diverted for kickbacks to the CS Bankers and the Intermediary Agent, and bribes to 

Mozambican government officials. The deal was also structured to hide the level of Mozambique’s 

indebtedness from the IMF.  Subsequently, near the time of the closing of the ProIndicus transaction 



 

in 2013, the CS Bankers agreed to accept improper kickbacks, which, alongside the improper 

payments to government officials were hidden from other members of Credit Suisse management.  

From 2013 through 2016, the CS Bankers, Mozambican officials and others received improper 

payments, in total, of approximately $200 million in connection with securing the ProIndicus and 

EMATUM financings. 

 

12. Several contemporaneous communications reflect that improper payments were 

intended to be paid to Mozambican government officials by the Intermediary, and the deals were 

structured to build into the financing the amounts that would be paid.  For example, in a 2012 email 

from the Intermediary Agent to Banker 3 and two other Bank employees, he stated that “[a] 

‘premium’ is well expected by the Mozambicans.” Around the same time, the Intermediary Agent 

also advised Banker 3 in a phone discussion that a high ranking Mozambican official understands 

that he will be paid a premium from the financing deal. 

 

13. In connection with the ProIndicus transaction, Credit Suisse’s books and records did 

not record the fact that a substantial portion of the ProIndicus financing proceeds would be paid as 

improper payments to numerous senior-level government officials in Mozambique or as kickbacks to 

the CS Bankers. Following the closing of the ProIndicus transaction, on March 21, 2013, Credit 

Suisse transferred $327.9 million in loan proceeds to an Intermediary account in Abu Dhabi, and in 

June and August 2013, Credit Suisse made two additional transfers of loan proceeds into the same 

account, all through U.S. correspondent banks.  In total, Credit Suisse  transferred $547,463,200, 

including $446,950,800 that it arranged and $100,512,400 that was arranged by VTB, to the 

Intermediary, from which bank records of the Intermediary reflect that improper payments were 

made to Mozambican officials and the Intermediary Agent and others, and kickbacks to the CS 

Bankers. 

 

14. Shortly after the first transfer to the Intermediary in March 2013, Intermediary bank 

records indicate transfers of over $80 million to accounts controlled by Mozambican government 

officials and others relating to the transaction. The transfers included a transfer of $50 million from 

which a relative of a high-level government official shared part of the payment with key government 

officials, who approved the transaction and authorized the-then Minister of Finance to sign the 

guarantee.  Intermediary bank records reflect additional improper payments, including, for example, 

$13 million paid to government officials holding senior positions at ProIndicus and a $5 million 

payment to a senior official who reported to the-then President of Mozambique. 
 

15. The CS Bankers were able to carry out the scheme as a result of deficiencies in 

Credit Suisse’s  internal accounting controls, unreasonable reliance on the CS Bankers to structure 

the deal, and inadequate appreciation of bribery risks that came to the attention of the bank’s 

reputational risk, credit risk and compliance groups. The CS Bankers, for example, structured the 

financings to transfer all proceeds directly to accounts controlled by the Intermediary in Abu Dhabi 

rather than to the borrower in Mozambique.  Credit Suisse also transferred the funds directly to the 

Intermediary despite being aware of allegations of corrupt practices concerning the Intermediary.  

 

16. The Bank’s financial crime compliance group commissioned and received a third-

party diligence report that quoted an anonymous source describing the Intermediary’s principal 

(“Intermediary Principal”) as a “master of kickbacks” and included other information, including: 



 

a. “All sources we spoke to about [Intermediary Principal] were confident of his past and 

continued involvement in offering and receiving bribes and kickbacks” and “raised 

concerns about the integrity of [Intermediary Principal’s] business practices,” and that 

“[Intermediary Principal] was heavily involved in corrupt practices.” 

b. “Another banking source close to a Lebanese commercial bank that previously dealt with 

[Intermediary Principal and his brother] and the [Intermediary] group of companies stated: 

‘[Intermediary Principal] is a first-class deal maker and an expert in kickbacks, bribery 

and corruption.’” 

 

17. The information provided to the compliance team in their diligence efforts also 

included that the Intermediary Principal’s business was being conducted “in a more classical way, 

more in compliance with the rules of ethics.”  A source also reported that UAE authorities were not 

aware of information tying the Intermediary to corrupt practices, and that the Intermediary 

Principal had been removed from a screening service due to the age of some of the allegations 

against him.  Credit Suisse, nonetheless, acted unreasonably in failing to properly consider the 

totality of bribery risks surrounding the transaction that came to its attention.   

 

18.  In March 2013, a Director in the Bank’s Europe, Middle East and Asia (“EMEA”) 

group warned that Intermediary Principal was an “undesirable client” for the bank and he and his 

entities had been, in the past, “obviously involved in corrupt practices.” EMEA advised against 

providing the financing “given that we are not comfortable with Intermediary Principal and his 

entities” and recommended rejecting any financing that involved the Intermediary Principal and his 

entities because of corruption risks.  In November 2012, an email among Banker 1 and Banker 2 and 

an EMEA Managing Director and Director stated “[the EMEA CEO] said no to the combination of 

Moz[ambique] and your friend [Intermediary Principal], so we need to structure him out of the 

picture.”  

 

The EMATUM LPN Offering 

 

19. Credit Suisse and VTB acted as joint-lead managers and underwriters for an $850 

million offering for securitized LPNs issued by EMATUM, a newly formed state-owned entity 

controlled by the government of Mozambique. EMATUM was created as a tuna-fishing company 

and entered into a $768 million contract, dated August 2, 2013, to purchase vessels and equipment 

from an affiliate of the Intermediary (“Intermediary Affiliate”).  The interest-bearing LPNs were sold 

in two tranches: (1) $500 million that was underwritten and offered by Credit Suisse in September 

2013 on a firm commitment basis; and (2) $350 million that was underwritten and offered by VTB in 

October 2013.  Credit Suisse, as the lead underwriter and selling agent for EMATUM, held the 

$500 million on its books until the notes were sold to investors.   

 

 20.  The EMATUM project was originally conceived as a $250 million project, but, over 

the space of two weeks, the amount of the proposed project grew to $850 million, which provided 

more funds to be available for kickbacks and improper payments. In order to maximize the sales of 

the securitized debt, Credit Suisse marketed the offering to the international bond market, which 

included funds advised by United States investment advisers, and U.S investors in the secondary  

 



 

market.  The then-Minister of Finance, again, signed a guarantee on behalf of Mozambique for this 

transaction, though Mozambique has since disputed the validity of the guarantees. 

 

The Improper Payment Scheme 

 

21. The Offering Circulars for EMATUM’s issuance of LPNs were created and drafted 

by Credit Suisse and provided by Credit Suisse to investors.  The Offering Circulars  disclosed that 

the proceeds would be used “towards the financing of the purchase of fishing infrastructure, 

comprising of 27 vessels, an operation center and related training and for the general corporate 

purposes of the Borrower […]” and falsely disclosed that EMATUM would not “use the proceeds of 

any Loan, or make available to any person, for the purpose of financing or facilitating any activity 

that would violate Anti-Corruption Laws, or in any way which constitute a Corrupt Act.” 

 

22. As with ProIndicus, EMATUM, through the acts of the CS Bankers, was used as a 

vehicle to divert proceeds to themselves as kickbacks and make improper payments to government 

officials through the Intermediary.  The CS Bankers also hid the underlying corruption and 

kickback scheme from other members of Credit Suisse management. For example, in a July 26, 

2013 email using non-Credit Suisse email accounts, the Intermediary Agent informed Banker 1 and 

Banker 2: “Bro for fish: [Intermediary Affiliate] contract 750 and 50 between [Intermediary Related 

Entity] and MoF [Minister of Finance]?” In a subsequent July 2013 email, the Intermediary Agent  

advised the CS Bankers that the EMATUM financing would need to be increased from $750 million 

to $825 million in order to include a cushion for payments to government officials, stating: “825 

please. 25 on top of the 50 to the borrower.” Further, a spreadsheet maintained by Intermediary 

reflects over $600 million as payable to an account controlled by Intermediary Principal, with over 

$100 million being paid to government officials and others involved in the approval process.   

 

23. Following instructions out of Mozambique that the structuring should be designed to 

“prevent any defaulting situation in the repayment obligations," the Intermediary Agent, Banker 1 and 

Banker 2 also discussed $51 million as part of the $850 million EMATUM financing in order to 

cover interest payments that ProIndicus and EMATUM were obligated to pay in March and 

September 2014.  In an email dated July 21, 2013, the Intermediary Agent discussed with Banker 1 

and Banker 2 on their personal emails, “[w]e will go for $800 million so we can keep a cushion for 

ProIndicus interest payment next year.”  They also discussed “we should keep a cushion for 

ProIndicus of $17m so that we don’t need to go back to MoF [Minister of Finance] and they are on 

our side” and “we need to keep an interest cushion of 18 months for the bond interest payments so 

that everyone is comfortable the bond doesn’t default until the fleet is up and running.” ProIndicus 

lacked the ability to meet its interest obligations and the cushion allowed the corruption scheme to 

continue undetected, as a default on ProIndicus interest payments would have caused investors to 

question the legitimacy of EMATUM.   
 

24. In two separate transfers on September 11 and October 11, 2013, Credit Suisse sent 

$759.8 million from LPNs the bank purchased directly to an Intermediary controlled account in Abu 

Dhabi, through a U.S. correspondent bank.  Until mid-October, when Credit Suisse finished selling 

the entire note offering, the unsold portion of the securitized debt from the firm commitment 

offering remained on its books.   



 

 

 

25. The CS Bankers were able to carry out the scheme as a result of deficiencies in the 

bank’s internal accounting controls, unreasonable reliance on the CS Bankers to structure the deal 

and inadequate response to bribery risks that came to the attention of the bank’s reputational risk, 

credit risk and compliance groups.  Despite identified risks, Credit Suisse structured the financings to 

transfer all proceeds directly to accounts controlled by the Intermediary in Abu Dhabi rather than to 

the borrower in Mozambique. 

 

26. From the Proindicus and EMATUM loan proceeds, the Intermediary made improper 

payments to the Intermediary Agent and Mozambican government officials and paid kickbacks to the 

CS Bankers.  The Intermediary paid $45 million to Banker 1, who in turn paid $2 million to Banker 

3 and $2.2 million to Banker 2. In addition, the Intermediary paid $3.7 million to Banker 3 directly. 

Mozambique officials received payments from Intermediary totaling approximately $150 million, 

including, but not limited to, $5 million paid to an official involved in approving the transaction, $8.8 

million to a relative of a senior government official, and $11.9 million to a government official who 

was also an officer of EMATUM.  

 

Credit Suisse Goes Forward with the Offering Despite Risks 

 

27. At the time of the EMATUM LPN offering, based on the ProIndicus due diligence 

review, Credit Suisse understood the corruption risks associated with Intermediary Principal and 

Intermediary Affiliate.  The EMATUM LPN offering presented virtually identical irregularities and 

risks as the ProIndicus transaction. The transaction involved another maritime contractor affiliated 

with the same Intermediary Principal who was identified as potentially corrupt; Credit Suisse remitted 

funds to an entity controlled by Intermediary Principal instead of Mozambique or the state-owned 

entity obtaining the securitized financing; and the financing had not gone through an approval process 

with the Mozambique parliament 

 

28. In connection with the EMATUM offering, Credit Suisse prepared an approval 

memorandum for its European Investment Banking Committee (“EIBC”), which highlighted a 

number of risks with respect to the transactions, including that all the funds would be remitted to an 

account controlled by Intermediary Principal. 

 

29. Credit Suisse also learned that a due diligence questionnaire in connection with the 

ProIndicus transaction reflected that Intermediary and its related entities were not selected from a 

competitive bidding process, but rather, from “high level connections” between Intermediary and 

the Mozambican government. Although Banker 3 provided falsified competitive bid information 

for the EMATUM project, Credit Suisse did not perform sufficient due diligence concerning the 

Intermediary Principal or his entities in connection with the EMATUM transaction. Further, Credit 

Suisse agreed to the total financing amount, including the $51 million increase for covering interest 

payments for which ProIndicus was responsible, without determining how the additional funds to 

the Intermediary would be utilized.  

 

30. A memo was prepared for the Credit Risk Management Committee (“CRM”), which 

stated that, as had been the case with the ProIndicus financing in March 2013, because the 



 

EMATUM financing was not a direct obligation of Mozambique, it would “not be included in the 

government’s debt outstanding and will not [as it is a contingent obligation] be reflected in the state 

budget.” As a result, investors could not have ascertained the impact that the financing would have on 

Mozambique’s debt level and risk of default through IMF reporting. 

 

31. Despite the due diligence failures, Credit Suisse’s CRM function, EIBC and 

Reputational Risk function, which included an Anti-Money Laundering review, approved the 

transaction in August 2013.  In connection with the EMATUM transaction, Banker 3 signed 

transaction documents on behalf of Credit Suisse.  

 

32. The Credit Suisse U.K. entities were subject to examinations by the U.K.’s 

Prudential Regulation Authority (PRA) which, in October 2013, identified a number of reputational 

risk process shortcomings based on an examination of the ProIndicus transaction.  The PRA found 

that the bank maintained “an informal reputational risk committee and light reputational risk process” 

which “lacked a holistic overview and insight of the risks that we would expect to be present in a 

formal committee,” and had a “status quo culture and lacked a forward looking credit risk strategy.”   

Although the exam did not find unacceptable reputational or credit risk, it did disclose a number of 

additional credit risk management weaknesses and directed the bank to promptly remediate.  
 

Disclosure Failures 

 

33. The EMATUM LPN offering document created by Credit Suisse stated: “No 

statement is made in this offering circular about the creditworthiness of Mozambique. Any 

prospective investor must make their own investigations relating to the creditworthiness of 

Mozambique.” Credit Suisse, however, knew that it structured, underwrote and provided $504 million 

in debt to a state-owned entity, ProIndicus, and that VTB had provided an additional $118 million in 

debt to ProIndicus. Because the IMF and the Mozambican parliament were excluded from the 

transaction, the ProIndicus debt did not appear on IMF Country Reports and was not otherwise 

publicly known.  As such, investors would have looked to the offering disclosures created by Credit 

Suisse for this information.  Given that investors understood that the financing to EMATUM was 

guaranteed by Mozambique, they viewed it as a sovereign obligation, making the country’s total 

indebtedness highly material because it increased the risk of default on the LPNs. 

 

34. Although the EMATUM LPN offering document disclosed the possibility that 

Credit Suisse maintained lending and other relationships with Mozambique and affiliated entities, 

in failing to specifically disclose the ProIndicus loan, the offering document used by Credit Suisse to 

sell EMATUM LPNs also failed to disclose Credit Suisse’s conflict of interest with EMATUM 

bondholders. At the time of the EMATUM transaction, Credit Suisse understood that Mozambique 

had interest obligations to Credit Suisse which was not disclosed to the EMATUM investors.  Under 

the terms of the ProIndicus loan at the time, Credit Suisse, as a creditor, would be repaid in March 

2019, before the EMATUM notes matured in September 2020. The offering materials created by 

Credit Suisse, however, did not disclose that Credit Suisse could be paid in full on the ProIndicus 

loan 18 months before the EMATUM noteholders.  These disclosures failures rendered the offering 

materials false and misleading. 

 



 

 

IMF Discovery of the EMATUM Transaction 

 

35. Starting in late September 2013, several news outlets reported that proceeds from the 

EMATUM LPN transaction had been allegedly diverted towards Mozambique’s procurement of 

military vessels from a French shipyard owned by the Intermediary Principal. Based on this 

reporting, the IMF, for the first time, became aware of the EMATUM loan underlying the LPNs that 

had been guaranteed by the Minister of Finance and the use of proceeds of the loan.   As a 

consequence, the IMF required Mozambique to include $500 million from the EMATUM obligation 

as defense spending in the country’s budget. 

 

36. In its country reports on Mozambique from January 2014 through 2015, the IMF 

noted several risks and concerns surrounding the EMATUM transaction.  In the January 2014 and 

August 2015 country reports, the IMF noted “the lack of transparency regarding the [EMATUM] use 

of funds and the secretive manner in which the project was evaluated, selected, and implemented 

outside the government’s macro-economic strategy […]” and that the project  “raised serious 

governance concerns.” In its December 2015 IMF Staff Report, the IMF warned of the need to limit 

additional new government guaranteed debt and monitor state-owned enterprises.  The ProIndicus 

transaction, which was structured in a similar manner to EMATUM, was not included in any IMF 

publication.   

 

The 2014 ProIndicus Extension Transaction 

 

37. In December 2014, Credit Suisse entered into another transaction with ProIndicus to 

restructure and extend the interest and principal payment terms under the facility agreement 

(“Extension”) from 2019 to 2021. The Extension agreement also increased the facility amount that 

ProIndicus was able to borrow from $622 million, which had already been funded by Credit Suisse 

and VTB, to $900 million. At the time, Credit Suisse was carrying approximately $277 million in 

debt owed by ProIndicus. 

 

38. At the time of the Extension, Credit Suisse was aware of several risks and continued 

to maintain deficient internal accounting controls. Specifically, Credit Suisse was aware that: (a) 

ProIndicus was operating at a loss, was about to default on its next interest payment, and that its 

auditor had doubts concerning its ability to continue as a going concern; (b) the due diligence for the 

ProIndicus and EMATUM deals had revealed potential risks that the transactions could be executed 

outside of management’s general or specific authorization; (c) press outlets had reported that funds 

from the EMATUM LPN financing (which was structured similarly to ProIndicus), may have been 

diverted; and (d) Bankers 1 and 2,who had structured the ProIndicus deal, had left Credit Suisse to 

work at an entity (“Intermediary Related Entity”), owned and controlled by Intermediary Principal—

and were now representing Mozambique in negotiating the Extension.  In approving the Extension 

transaction despite these risks, Credit Suisse failed to provide reasonable assurance that the 

transaction was executed in accordance with management’s general or specific authorization and 

continued to maintain books and records that did not reflect the true nature of the loan and use of 

proceeds.     

 

 



 

The 2016 Exchange Offer 

 

Background Events Leading to the Exchange Offer 

 

39.   By 2014, Mozambique was unable to service the nearly $2 billion in debt that had 

been amassed through the ProIndicus, EMATUM LPN and MAM transactions. By year-end 2014, 

EMATUM failed to generate significant revenue and its audited financials reflected that it had 

incurred $24.5 million in losses. By this time, the press had also reported on EMATUM’s poor 

financial condition and that EMATUM would miss its first amortization payment on the LPNs, due 

in September 2015.  By 2015, in addition to the risk of default by EMATUM, Credit Suisse learned 

of several potential reputational and financial risks, given its role in underwriting, distributing, 

marketing and selling the notes. 
 

40. In July 2015, Credit Suisse, VTB and the government of Mozambique began 

discussions regarding restructuring the EMATUM LPNs to a sovereign bond issued by Mozambique 

that was non-amortizing, with extended repayment terms.  In internal emails, Credit Suisse personnel 

advocated leading the Exchange Offer to allow the Bank to “maintain control of the situation,” and 

that it would be detrimental from “a Reputational Risk perspective” if another bank were brought in 

to “clean up” the trade. Involvement in restructuring of the notes also allowed Credit Suisse to 

protect its interests as a ProIndicus creditor.  Credit Suisse personnel, for example, noted that “the 

impact of any EMATUM default on ProIndicus is significant, particularly given the issue of cross-

default. . . [and] [t]his re-emphasizes the importance of us [Credit Suisse] being involved in the 

exchange/restructuring.” 

 

41. In discussions leading up to the Exchange Offer, Credit Suisse risk management 

personnel noted that EMATUM had been characterized in the public press as Mozambique’s “worst 

ever corruption scandal,” that there were allegations of “mismanagement and misappropriation,” that 

the transaction had been consummated “in secret without going through the normal parliamentary 

channels,” and that there were allegations that equipment received had been “overpriced and not fit 

for purpose... and that the overpricing profited government ministers.”  In response, Credit Suisse 

conducted due diligence on the Exchange and underlying EMATUM LPN transaction. 

 

42.  Bankers 1 and 2, two years prior to this time, left Credit Suisse to work for the 

Intermediary Related Entity, while Banker 3 remained a Credit Suisse managing director, but 

continued to hide the underlying corruption and kickback scheme from other members of Credit 

Suisse management, including those responsible for the Exchange Offer.  In connection with the 

Exchange Offer, Banker 1 and Banker 2 now represented the Republic of Mozambique, which had 

retained Intermediary Related Entity, to lead discussions with Credit Suisse and VTB concerning 

the offering, including the disclosure of Mozambique’s debt. In a September 7, 2015 email, a 

Credit Suisse director noted the involvement of Bankers 1 and 2 on behalf of Mozambique created 

“sensitivity.”  

 

43. On March 9, 2016, the Exchange Offer was announced and Credit Suisse 

subsequently prepared and distributed Mozambique’s offering materials to solicit consent from 

investors in the EMATUM LPNs. The Exchange Offer allowed investors of LPNs, of which 

approximately 39% were U.S. investors who had made purchases on the secondary market, to 



 

exchange the EMATUM notes for new bonds issued directly by the government of Mozambique. In 

mid-March, Credit Suisse participated in road shows in New York and London, where the 

Mozambican Minister of Finance at the time represented to investors that the information 

memorandum contained in the offering materials included the total amount of the debt of 

Mozambique, including all guarantees. By March 23, 2016, bondholders voted in favor of the 

Exchange Offer and the results were announced on April 1, 2016. 
 

Material Misrepresentations and Omissions in the Exchange Offer  

 

Conflicts of Interest 

 

44. The Exchange Offer offering materials prepared by Credit Suisse failed to properly 

disclose Credit Suisse’s conflicts of interests in having rights as a creditor under the ProIndicus 

transaction that were, in certain respects, adverse to investors. The Exchange Offer extended 

Mozambique’s repayment obligations to investors to 2023 (when the bond matured), but 

Mozambique was obligated to pay Credit Suisse and VTB interest and principal under the ProIndicus 

loan before making payments on the notes to investors. In 2014, after Credit Suisse became aware 

that ProIndicus had not earned revenue, the bank restructured the ProIndicus loan to extend the 

maturity to 2021 (from 2019), two years before the Exchange Offer bond matured. In addition, the 

offering materials failed to disclose VTB’s financing to MAM and VTB’s similar conflict of interests 

in having interests under the ProIndicus and MAM loans that were, in certain respects, adverse to 

noteholders. While the offering documents for the Exchange Offer included disclosures that Credit 

Suisse was a party to other financing agreements, the conflict of interest—that the bank was a major 

creditor under the ProIndicus transaction with interests, in certain respects, adverse to noteholders—

was not specifically disclosed.  The disclosure failures rendered the offering materials false and 

misleading. 
 

45. Several internal communications reflect that Credit Suisse gave consideration to its 

interests as a creditor in the ProIndicus transaction and in retaining business interests with 

Mozambique in its dealings on the Exchange Offer, as well as the risk that alienating Mozambique 

could impact the country’s cooperation with the bank’s due diligence efforts.  A January 29, 2016 

internal email, for example, stated: “If we cancel our involvement with the bond Mozambique will 

not cooperate with us at all going forward on anything including providing us with information on 

the Trimarans & Tuna Boats. In addition we need Moz to cooperate with us on other interests in 

Moz (eg ProIndicus Loan).” Another email similarly stated “[s]hould we alienate Mozambique they 

will not cooperate.” In a February 9, 2016 email, several senior bank employees discussed “key 

priorities” that the bank must “ensure our investors (and ourselves) are looked after under EMATUM 

LPNs [loan participation notes]…and under ProIndicus Loan” and recognized that, under both 

transactions, Mozambique had interest payments coming due in March 2016. 
 

46. As early as July 2015, the bank’s reputational risk group warned about risks 

associated with Credit Suisse’s continued association with Mozambique following the EMATUM 

“bad deal.” Credit Suisse, in fact, recognized that the “reputational damage would be significant if CS 

wasn’t involved in restructuring the deal and another bank was brought in instead.”  Other emails 

discussed that the “EMATUM transaction has proved problematic from (i) a media perspective…. 

and use of proceeds’” and, as a result, Credit Suisse needed to remain involved in the Exchange 



 

Offer and “look after our investors…protect our exposures…protect our reputation…resolve any 

outstanding queries with respect to [due diligence].” 

 

47. The offering materials created by Credit Suisse also failed to disclose the ProIndicus 

loan to investors. Even though the ProIndicus transaction was specifically disclosed in earlier drafts 

of the offering materials, a member of the deal team instructed that all references to the transaction be 

removed.  The ProIndicus loan documents included a confidentiality clause.  An email between a 

senior bank official and Banker 2 states that “WE CAN’T DISCLOSE THE TERMS OF PRIVATE 

CONTRACTS.”   

 

Diversion of Funds 

 

48. The offering materials prepared by Credit Suisse for Mozambique’s Exchange Offer 

disclosed that the press had reported that proceeds from the EMATUM LPNs were used to purchase 

defense equipment rather than tuna boats and, thus, “called into question whether all of the proceeds 

of the issuance of the Existing Notes were used for authorized or appropriate purposes.” The 

disclosure also noted that “EMATUM ha[d] experienced losses” that create risks surrounding the 

ability to service the notes. 
 

49. In preliminary due diligence concerning the Exchange Offer, Credit Suisse’s Bribery 

and Anti-Corruption  (“BACC”) and Sustainability Affairs functions were concerned about the use of 

proceeds from the original EMATUM transaction and noted “too many significant disparities” 

between the value of equipment received and the invoices for that equipment. BACC conditioned 

approval of the Exchange on completing a reconciliation of the gaps concerning the use of proceeds 

and “whether there is a duty to disclose any of the findings to the noteholders.” Credit Suisse, 

however, failed to conduct the reconciliation process outlined in the email. 
 

50. A reputable auditing firm had conducted an audit of EMATUM and called attention 

to the “loss of over half of the share capital” of the company. In January 2016, the bank also retained 

an outside appraiser to conduct a valuation of the boats purchased from the proceeds of the 

EMATUM financing. In February 11, 2016 email, a Credit Suisse director (the “Valuation Director”) 

responsible for the valuation, reported to management that the valuation “[r]esults have not been 

satisfactory.” The appraisal revealed that, out of the total $500 million in equipment funded by 

Credit Suisse, only $336-$480 million in boats and related equipment had been delivered while the 

rest was unaccounted for. As reflected in a July 2015 email, the bank also understood that funds 

from EMATUM were used to procure patrol vessels rather than fishing vessels, as had been part of 

the original project plan.  The appraisal also opined that the vessels were generally well constructed 

and suited to the project and should be able to “earn their keep” if and when properly deployed. 
 

51. On calls, Banker 3 discussed with the Valuation Director that “this one is going to 

be ugly,” and “I know you don’t have a choice, but I really wish we didn’t have this valuation,” to 

which the Valuation Director  responded that “we need to make sure we keep the facilities paid.” 

Days before receiving the valuation the Valuation Director told Banker 3 that he thought “BACC are 

going to close us down. I think they will prevent us from doing the bond.” Banker 3 acknowledged 

that “if we shut down the bond it will impact ProIndicus as well.” 

 



 

52. Credit Suisse personnel identified a “significant shortfall” of between $265 and $408 

million in the proceeds of the original transaction and the value of the boats and equipment received. 

By a February19, 2016 email, the Valuation Director forwarded to senior employees, including 

Banker 3, a spreadsheet that showed a difference of at least $265.4 million from the EMATUM 

proceeds and a high-end estimate value of the boats and equipment received ($435 million), and fees 

and interest payments made ($149.6 million) under the $850 million EMATUM LPN facility. 
 

53. A March 8, 2016 memorandum prepared in connection with the approval of the 

Exchange Offer for the Credit Suisse Global Investment Banking Committee noted as risk factors that 

“EMATUM may have been overcharged” for the boats and other equipment received in connection 

with the original EMATUM financing and that the “funds were disbursed directly to the Contractor.” 

 

Debt Levels and Risk of Default 

 

54. Credit Suisse knew or should have known that the debt disclosures provided by 

Mozambique and its counsel, which were included in the offering materials, failed to properly 

disclose Mozambique’s total debt levels.  Mozambique’s total debt was a material disclosure item 

because it determined the government’s risk of default and creditworthiness in connection with the 

Exchange Offer. The credit risk memorandum prepared in connection with the prior EMATUM LPN 

offering, however, stated that the EMATUM debt, as with the ProIndicus debt, “will not be included 

in the government’s debt outstanding and will not be reflected in the state budget.” In following this 

approach, the disclosures in the offering materials for the Exchange Offer on Mozambique’s level of 

indebtedness were misleading and omitted the amounts arising from the ProIndicus transaction and 

the $535 million MAM transaction that Credit Suisse had discovered by August 2015, and which had 

not been disclosed to the Mozambique parliament and IMF.  Instead, the disclosures in the offering 

documents prepared by Credit Suisse merely included a series of debt tables, which did not properly 

disclose the true nature of Mozambique’s debt and significant risk of default. 

 

55. At an early stage in the debt disclosure process, the deal team working on the 

Exchange Offer understood that Mozambique and Banker 1, who was now employed by the 

Intermediary Related Entity retained by Mozambique, had “reluctance… to disclose ProIndicus & 

MAM loans in the prospectus” and the “sensitivity” to public disclosure of the MAM transaction, 

which was “private & unlikely to be disclosed in detail.” In a phone conversation with Banker 3, the 

Valuation Director stated that “one of the key issues is that in the prospectus of the bond, they are 

required to make complete disclosure of what they have, and obviously they have two facilities, one 

is ProIndicus and one is MAM, which is 540 million, which they don’t want to disclose.” As a result, 

Credit Suisse failed to name the ProIndicus or MAM deals in the offering materials. 

 

56. The Credit Suisse deal team, on several occasions, discussed Mozambique’s desire 

to avoid transparency and not disclose the ProIndicus and MAM debt in the debt disclosures. In a 

February 28, 2016 email, for example, Credit Suisse discussed with VTB that it is “not good tactics 

to show direct and ppg [guaranteed debt] figures side by side as it will call attention to the fairly large 

gap ie size of gtees [guarantees].” The email goes on to state that investors can compare these figures 

up against public reports “but we shouldn’t make it glaringly easy for them.” The side by side display 

would have called into question the size of the guaranteed debt, including the ProIndicus and MAM 

amounts. 



 

 

57. The Credit Suisse deal team also understood that the debt figures provided by 

Mozambique could not be reconciled against their due diligence, concluding that they were 

“misleading” and contained “inconsistencies,” and that the public numbers in the prospectus “still 

have mistakes.” The bank also discussed concerns of a “renewed rush” and “unrealistic timing” 

pressures that Banker 1, on behalf of Mozambique, had imposed in connection with the bank’s due 

diligence on making the debt disclosures. 

 

58. Despite risks and red flags presented, the bank unreasonably accepted Mozambique’s 

contention that the debt figures in the January 2016 IMF country report were accurate and inclusive 

of all guarantees, and the final disclosure materials did not need to include an itemized list of the prior 

non-public debts.  Credit Suisse accepted the debt as presented by Mozambique and its counsel.    As 

reflected in a February 12, 2016 email, a Credit Suisse deal team member informed his team that 

Mozambique’s “issuer team” represented that “the debt figures used in IMF reports is inclusive of all 

guaranteed debt” and reasoned that “[g]iven that the gross figures are all inclusive, there will be no 

itemized disclosure on the guarantees.” The representation was provided by the-then Minister of 

Finance in a letter to Credit Suisse.  
 

59. Credit Suisse, however, knew or should have known that the debt figures used in the 

IMF country report did not include ProIndicus or MAM, based on: (1) the fact that neither 

transaction, unlike EMATUM, was referenced in any of the IMF’s country reports; (2) the bank 

internally noted that “letter still doesn’t match the IMF report;” (3) bank personnel repeatedly 

discussed the need to keep the ProIndicus transaction “private” and undisclosed; and (4) had the 

ProIndicus and MAM deals been disclosed to the IMF, Mozambique might have been forced by the 

IMF to include the indebtedness as a line item on the country’s budget (as it did when it discovered 

the EMATUM transaction). 

 

Discovery of the True Level of Indebtedness and Mozambique’s Default on the Bond 

 

60.      On April 3, 2016, after press reports regarding the existence of other guaranteed 

debt, the government of Mozambique disclosed the existence of the ProIndicus and MAM Loans. On 

April 23, 2016, the IMF announced that Mozambique’s previously undisclosed indebtedness totaled 

$1.35 billion, including the $622 million loan to ProIndicus and the $535 million loan to MAM  

 

61.      In June 2016, the IMF and 14 other donor groups suspended lending and aid 

packages to Mozambique, and the IMF called for an independent audit of ProIndicus, EMATUM, and 

MAM. In June 2017, the audit report, conducted by an international auditing firm, concluded that it 

could not account for $713 million when comparing the Intermediary invoices and the market price of 

the boats that were purportedly provided in the ProIndicus and EMATUM transactions. Earlier, in 

January 2017, when its debt constituted 112% of its GDP, Mozambique announced that it would 

default on its debt obligations and, since then, has not made any payments on the ProIndicus, 

EMATUM or MAM debts. 

 

 



 

Violations and Findings 

 

 

62. As a result of the conduct described above as it relates to the EMATUM LPN 

offering, the Commission finds that Credit Suisse violated Section 10(b) of the Exchange Act, and 

Rule 10b-5 thereunder which prohibits any person, directly or indirectly, by the use of any means or 

instrumentality of interstate commerce, or of the mails or of any facility of any national securities 

exchange, in connection with the purchase or sale of any security (a) to employ any device, scheme, 

or artifice to defraud, (b) to make any untrue statement of a material fact or to omit to state a material 

fact necessary in order to make the statements made, in the light of the circumstances under which 

they were made, not misleading, or (c) to engage in any act, practice, or course of business which 

operates or would operate as a fraud or deceit upon any person. 

 

63. As a result of the conduct described above as it relates to the EMATUM LPN 

offering, the Commission finds that Credit Suisse violated Section 17(a)(1) of the Securities Act, 

which proscribes, in the offer or sale of any security, the employment “of any device, scheme, or 

artifice to defraud.” 

 

64. As a result of the conduct described above as it relates to the EMATUM LPN and 

Exchange Offer, the Commission finds that Credit Suisse violated Section 17(a)(2) of the Securities 

Act, which proscribes, in the offer or sale of any security, obtaining “money or property by means of 

any untrue statement of a material fact or any omission to state a material fact necessary in order to 

make the statements made, in light of the circumstances under which they were made, not 

misleading.”  Credit Suisse also violated Section 17(a)(3) of the Securities Act, which proscribes, in 

the offer or sale of any security, engaging “in any transaction, practice, or course of business which 

operates or would operate as a fraud or deceit upon the purchaser.” 

 

65. As a result of the conduct described above, the Commission finds that Credit Suisse 

violated Section 13(b)(2)(A) of the Exchange Act, which requires issuers that have a class of 

securities registered pursuant to Section 12 of the Exchange Act and issuers with reporting 

obligations pursuant to Section 15(d) of the Exchange Act to make and keep books, records, and 

accounts which, in reasonable detail, accurately and fairly reflect their transactions and disposition of 

their assets. 

 

66. As a result of the conduct described above, the Commission finds that Credit Suisse 

violated Section 13(b)(2)(B) of the Exchange Act, which requires issuers that have a class of 

securities registered pursuant to Section 12 of the Exchange Act and issuers with reporting 

obligations pursuant to Section 15(d) of the Exchange Act to devise and maintain a system of 

internal accounting controls sufficient to provide reasonable assurances that (i) transactions are 

executed in accordance with management’s general or specific authorization; (ii) transactions are 

recorded as necessary (I) to permit preparation of financial statements in conformity with generally 

accepted accounting principles or any other criteria applicable to such statements, and (II) to  

maintain accountability for assets; (iii) access to assets is permitted only in accordance with 

management’s general or specific authorization; and (iv) the recorded accountability for assets is 

compared with the existing assets at reasonable intervals and appropriate action is taken with respect 

to any differences. 



 

 

 

Disgorgement and Civil Penalties 

 

67. The disgorgement and prejudgment interest ordered in paragraph IV.B is consistent 

with equitable principles and does not exceed Respondent’s net profits from its violations and will 

be distributed to harmed investors, if feasible through a Fair Fund. The Commission will hold 

funds paid pursuant to paragraph IV.B in an account at the United States Treasury pending a 

decision whether the Commission in its discretion will seek to distribute funds. If a distribution is 

determined feasible and the Commission makes a distribution, upon approval of the distribution 

final accounting by the Commission, any amounts remaining that are infeasible to return to 

investors, and any amounts returned to the Commission in the future that are infeasible to return to 

investors, may be transferred to the general fund of the U.S. Treasury, subject to Section 21F(g)(3) 

of the Exchange Act. 

 

68. In determining to accept the Offer, the Commission considered Credit Suisse’s 

substantial remedial efforts.  Credit Suisse has engaged in a review and remediation of its internal 

controls and procedures relating to the integration of its compliance functions.  This includes the 

establishment of a U.K. Financial Crime Advisory team to conduct due diligence from a financial 

crimes perspective, and the establishment of a Global Focus Client Committee to assess client risks 

from a compliance perspective.  Credit Suisse also proactively worked with peer banks, civil 

society organizations, and various international organizations on the design and establishment of a 

transparent lending portal program, as endorsed by the G7. 

 

IV. 

 

In view of the foregoing, the Commission deems it appropriate to impose the sanctions 

agreed to in Respondent Credit Suisse’s Offer. 

 

Accordingly, it is hereby ORDERED that: 

 

A. Pursuant to Section 8A of the Securities Act and 21C of the Exchange Act, Respondent cease 

and desist from committing or causing any violations and any future violations of Sections 

10(b) and13(b) of the Exchange Act and Rule 10b-5 thereunder, and Sections 17(a) of the 

Securities Act. 
 

B. Respondent shall, within 10 days of the entry of this Order, pay disgorgement of $26,229,233 

and prejudgment interest of $7,822,639 to the Securities and Exchange Commission. The 

Commission will hold funds paid pursuant to this paragraph in an account at the United 

States Treasury pending a decision whether the Commission, in its discretion, will seek to 

distribute funds or, transfer them to the general fund of the United States Treasury, subject to 

Exchange Act Section 21F(g)(3). If timely payment is not made, additional interest shall 

accrue pursuant to SEC Rule of Practice 600. 

 

C. Respondent shall, within 10 days of the entry of this Order, pay a civil money penalty in the 

amount of $65,000,000 to the Securities and Exchange Commission. The Commission may 



 

distribute civil penalties collected in this proceeding if, in its discretion, the Commission 

orders the establishment of a Fair Fund pursuant to 15 U.S.C. § 7246, Section 308(a) of the 

Sarbanes-Oxley Act of 2002. The Commission will hold funds paid pursuant to this 

paragraph in an account at the United States Treasury pending a decision whether the 

Commission, in its discretion, will seek to distribute funds or, subject to Exchange Act  

Section 21F(g)(3), transfer them to the general fund of the United States Treasury.  If timely 

payment is not made, additional interest shall accrue pursuant to 31 U.S.C. §3717. Payment 

must be made in one of the following ways: 

 

(1) Respondent may transmit payment electronically to the Commission, which 

will provide detailed ACH transfer/Fedwire instructions upon request; 

 

(2) Respondent may make direct payment from a bank account via Pay.gov 

through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or 

 

(3) Respondent may pay by certified check, bank cashier’s check, or United 

States postal money order, made payable to the Securities and Exchange 

Commission and hand-delivered or mailed to: 

 

Enterprise Services Center 

Accounts Receivable Branch 

HQ Bldg., Room 181, AMZ-341 

6500 South MacArthur Boulevard 

Oklahoma City, OK 73169 

 

Payments by check or money order must be accompanied by a cover letter identifying 

Credit Suisse Group AG as a Respondent in these proceedings, and the file number of these 

proceedings; a copy of the cover letter and check or money order must be sent to Anita B. Bandy, 

Associate Director, Division of Enforcement, Securities and Exchange Commission, 100 F St., NE, 

Washington, DC 20549-6561. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Regardless of whether the Commission in its discretion orders the creation of a Fair Fund for 

the penalties ordered in this proceeding, amounts ordered to be paid as civil money penalties 

pursuant to this Order shall be treated as penalties paid to the government for all purposes, including 

all tax purposes. To preserve the deterrent effect of the civil penalty, Respondent agrees that in any 

Related Investor Action, it shall not argue that it is entitled to, nor shall it benefit by, offset or 

reduction of any award of compensatory damages by the amount of any part of Respondent’s 

payment of a civil penalty in this action (“Penalty Offset”). If the court in any Related Investor 

Action grants such a Penalty Offset, Respondent agrees that it shall, within 30 days after entry of a 

final order granting the Penalty Offset, notify the Commission's counsel in this action and pay the 

amount of the Penalty Offset to the Securities and Exchange Commission. Such a payment shall not 

be deemed an additional civil penalty and shall not be deemed to change the amount of the civil 

penalty imposed in this proceeding. For purposes of this paragraph, a "Related Investor Action" 

means a private damages action brought against Respondent by or on behalf of one or more investors  

based on substantially the same facts as alleged in the Order instituted by the Commission in this 

proceeding. 

 

By the Commission. 

 

 

Vanessa A. Countryman 

Secretary 


	UNITED_STATES_OF_AMERICA
	In_the_Matter_of
	Credit_Suisse_Group_AG
	Respondent.
	42._Credit_Suisse_failed_to_properly_dis
	IV.