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Joint Statement: After Felony Tax Evasion Scheme, Credit Suisse Does Not Deserve a DOL Waiver

Submitted by on January 15, 2015 – 12:35 pm
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In May 2014 Credit Suisse admitted to participating in a felony tax evasion scheme which involved the bank in falsifying tax records and assisting U.S. citizens in concealing their income and assets from U.S. authorities. The bank’s participation in this scheme spanned decades and involved thousands of U.S. clients.  As punishment for this scheme, the bank paid $2.6 billion in penalties to the U.S. government and agreed to accept oversight from an independent monitor.

According to official Department of Labor policy, Qualified Professional Asset Managers (QPAMs) who are trusted to engage in high-risk transactions using pension fund money must meet the highest ethical standards. For this reason, DOL regulations call for QPAM status to be automatically revoked when a financial entity or its affiliate is convicted of a specified set of felony offenses.

Credit Suisse, however, has asked for a waiver to allow it to maintain its privileges as a trusted QPAM permitted to engage in high-risk pension transactions. This waiver request is hardly surprising, since every entity convicted of a felony that requested such a waiver since 1997 has apparently been granted one.

If DOL regulations and ethical standards in this area are to have any meaning, the Department must enforce its policy of denying QPAM privileges to financial institutions which commit felony offenses involving financial fraud or breach of trust. The DOL should therefore turn down the waiver request. Granting Credit Suisse QPAM status in the face of flagrant and continuing violations of U.S. tax laws would be totally inappropriate.

We urge the Department of Labor to enforce its rules regarding the conditions for QPAM status. The Credit Suisse waiver application should be denied.

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