GENEVA (AP) — Switzerland’s financial markets authority said Thursday it is looking into possible penalties against Credit Suisse after the top-drawer bank announced “significant losses” linked to a U.S.-based hedge fund.
The authority, FINMA, said it will require “various risk-reducing measures” and investigate “possible shortcomings in risk management” at Credit Suisse. The authority said it is appointing an outside agent to look into the issue.
Two weeks ago, the bank announced it was taking a 4.4 billion Swiss franc ($4.7 billion) charge linked to a default on margin calls by U.S.-based Archegos Capital.
FINMA’s announcement came shortly after Credit Suisse reported a net loss of 252 million francs in the first quarter, largely due to the one-time charge.
CEO Thomas Gottstein said: “The loss we report in this quarter, because of this matter, in unacceptable.”
The bank said the charge off set “positive performance across wealth management and investment banking.”
FINMA also confirmed it opened in March proceedings against the bank in connection with its so-called “supply chain finance funds,” a financial instrument that is reserved for select clients.
The bank announced a suspension in redemptions and subscriptions in the fund on March 1 over insolvency issues linked to partner Greensill Capital.