Switzerland’s financial regulator is investigating Thomas Gottstein, the former CEO of Credit Suisse, for his role in the implosion of a $10 billion group of funds linked to disgraced financier Lex Greensill, according to a report published in SonntagsBlick.

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The Swiss Financial Market Supervisory Authority — or Finma — triggered enforcement proceedings against four unnamed former Credit Suisse staffers after concluding in February that the lender “seriously breached its risk-management obligations” in the Greensill Capital supply-chain financing affair.

Gottstein is among the Credit Suisse officials under investigation, the Swiss newspaper said Sunday, citing people familiar with the matter who it didn’t identify.

Spokesmen for Finma and UBS Group AG, which has taken over Credit Suisse, both declined to comment when contacted by Bloomberg. Gottstein declined to comment on the Finma proceedings.

In the aftermath of the Greensill collapse, Credit Suisse commissioned an external investigation carried out by Deloitte and Swiss law firm Walder Wyss into the failings around the Greensill funds.

The report, concluded in late 2021, was shared with the bank’s board of directors and Finma.

But the bank announced in February 2022 that it did not plan to make the report public “in light of the ongoing recovery process and the legal complexities of the matter.” Credit Suisse, which was acquired by UBS this year, is still attempting to recover investors’ money in the funds and fighting various legal battles related to the matter.

Credit Suisse said actions had been taken against a number of individuals where the board deemed it was appropriate. Approximately 10 employees left the bank as a result, while Gottstein was cleared, a person familiar with the matter said.

Limited powers

Finma’s powers to punish banks is limited as it cannot fine the institutions it oversees. Sanctions against individuals typically result in bans from financial services for a certain period, but rarely for a lifetime.

The implosion of Greensill Capital in March 2021 saw Credit Suisse freeze and wind down a $10 billion group of funds that the Swiss bank had marketed to clients as safe investments.

Prior to the UBS merger, Finma criticized Credit Suisse for its lax approach to risk management and for clear conflicts of interest.

Specifically, Credit Suisse made “partly false and overly positive statements to Finma about the claims selection process and the funds’ exposure to certain debtors,” the regulator said in February.

Credit Suisse previously said about $6.8 billion of the Greensill funds have since been returned to investors and last month the bank agreed to pay out an additional $200 million to investors of its supply-chain finance funds.

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