The Los Angeles Times reported that Swiss banking giant Credit Suisse has admitted to criminal allegations that it aided wealthy Americans dodge income taxes. The plea arrangement it had reached with the US Justice Department signaled a game changer years in the making about regulators' efforts to crack down some of the biggest financial institutions in the world over wrongdoing. The plea also marked the first time a large institution has acknowledged criminal misbehavior in over a decade.
In the agreement, Credit Suisse reportedly pleaded guilty to one count of conspiracy to aid tax evasion. The bank is also expected to pay fines worth over $2.6 billion.
When the US Justice Department first made known of the criminal charges against Credit Suisse, the bank acknowledged that although the practice was unacceptable and a mistake, it will not be revealing the names of the US citizens whom it had helped evade taxes to the regulators under Swiss bank-secrecy laws.
Regulators like the Justice Department has long faced criticism for its ability to seek prosecution on mammoth financial institutions, The LA Times said. The fear is said to be behind the concept known as "too big to fail," which argues that the failure of certain financial institutions could have a disastrous effect on the economy because of its interconnectedness with other financial institutions and enormity. Moreover, there is an argument that Wall Street has an impunity of sorts wherein the government tolerates the questionable financial behavior these mammoth institutions repeatedly engage to a point that the government will extend a hand in a form of a bailout package, for example, to avoid a wide havoc on the economy.
On the other hand, The LA Times said that the criminal charges brought against Credit Suisse will not have an impact on the bank's chief executive, Brady Dougan, as multiple reports have said that the CEO is expected to keep his job.
