Credit Suisse Says Client Who Lost $400 Million At Hands Of Fraudster Banker Should Take Responsibility For His Losses
Today in “privatizing gains and socializing losses” news…
In only the wonderfully tasteful fashion an investment bank can put it, Credit Suisse has argued that a billionaire former prime minister of Georgia who lost money to a rogue banker at the company should have to bear responsibility for some of his losses, according to Bloomberg.
Stephen Moverley Smith, lawyer for Credit Suisse’s Bermuda unit, said at trial of the billionaire who suffered the losses: “Taking a punt on a risky pharmaceutical stock, that’s what oligarchs with loose change do.”
Referring to a large bet on Raptor Pharmaceutical Corp. placed by now-convicted fraudster and former CS banker Patrice Lescaudron, Smith said: “What’s Credit Suisse supposed to do?”
When the stock tanked, it resulted in margin calls for the billionaire client, Bidzina Ivanishvili, and exposure of the fraud being committed by the banker, Lescaudron, who committed suicide in 2020 after being sentenced to five years in Geneva for fraud.
Ivanishvili is now accusing Credit Suisse Life (Bermuda) Ltd. of failing to stop Lescaudron from losing $400 million of his fortune, the report says. He’s one of “at least five” clients that is pursuing the bank for damages despite the banker’s death. The bank is arguing it had no knowledge of Lescaudron’s crimes.
Instead, the bank has painted the now-deceased Lescaudron as a “lone wolf who hid his misdeeds,” Bloomberg wrote. The ongoing trial seeks to determine how much culpability the bank’s Bermuda unit has for the losses.
“Lescaudron met Ivanishvili for as little as 45 minutes a year,” the former Georgian prime minister’s lawyers argued, stating that the banker was “trusted” by the billionaire.
Beginning in 2012, Lescaudron had started encouraging his clients to “invest heavily” in Raptor. The company’s stock plunged in 2015 when a trial of one of its new drugs failed.
The story has another element of mystery due to the circumstances of Lescaudron committing suicide.
Finnews writes that the 57 year old Lescaudron “in May 2020 published posts on his LinkedIn-profile that suggested he was about to say farewell”. He “complained about his inability to get a new job, despite numerous attempts, and the fact that his residence permit was due to expire, despite having paid more than 7 million francs in taxes over a sixteen-year period.”
In July 2020, Lescaudron killed himself, obviously making any fact finding mission for the ongoing trial regarding his actions as difficult as possible.
We will follow the story of the trial as new developments occur.
Wed, 11/17/2021 – 20:00