The logo of Credit Suisse is seen in front of a branch office in Zurich, Switzerland. Picture: REUTERS
The logo of Credit Suisse is seen in front of a branch office in Zurich, Switzerland. Picture: REUTERS

Geneva — Credit Suisse Group was put on the defensive on the first day of the criminal trial of a former banker accused of taking millions from customer accounts as his victims demanded more information on what the lender did and did not do to rein in unauthorised trades.

The victims of former private wealth banker Patrice Lescaudron wasted little time in trying to make the case about Credit Suisse as injured parties are full participants at Swiss trials.

Giorgio Campa, a lawyer for two Russian businessmen who he says lost Sf32m, asked the court to force the bank to turn over any exchanges with US regulators related to Lescaudron’s money-losing trades on Raptor Pharmaceutical Corporation.

Lescaudron, 54, has already admitted making unauthorised trades over six years to hide growing losses. While Credit Suisse has repeatedly said it knew nothing of his deception, lawyers for his Eastern European clients — including former Georgian Prime Minister Bidzina Ivanishvili — say investigators need to take a deeper look at the bank’s involvement.

"We need an independent expert to look into all this," Campa told Judge Alexandra Banna and a phalanx of lawyers for the other plaintiffs, the bank and Lescaudron in a wood-panelled courtroom in Geneva’s old town. "The court cannot cover its eyes."

Blue jeans

Dressed in blue jeans and a gray open-neck shirt, Lescaudron sat silently on a bench in the front row of the court, other than to identify himself by name when asked by Judge Banna. After two years in a Geneva jail, he was led in by police and remained flanked in the court by two Geneva policemen.

Lawyers for Ivanishvili and the other victims say they were hoping the two-week trial will help support their claims that the bank either knew or should have known about the rogue trades.

Ivanishvili, who is worth $5.8bn according to the Bloomberg Billionaires Index, has filed suits in Singapore, New Zealand and Bermuda to try to force Credit Suisse to disclose documents related to investment vehicles through which Lescaudron moved chunks of the tycoon’s fortune.

"I don’t know what Lescaudron’s motivation was, was it to be the best fund manager in the world?’ said Marc Hassberger, who represents a Russian woman who made her fortune in the soft drink business. "I don’t know because it hasn’t been investigated."

Hassberger said the indictment of Lescaudron on fraud, criminal mismanagement and forgery does not accurately reflect his client’s losses and asked Judge Banna to either amend the indictment or send the case back for further investigation.

Credit Suisse, whose lawyers have yet to give their prepared remarks at the trial, said last week that a two-year investigation has not revealed any indication that Lescaudron was helped by colleagues.

Vincent Jeanneret, the bank’s attorney, hit back at the plaintiffs’ lawyers allegations, saying there was no logic in returning the case for further investigation. It was a "phantasm" to suggest there was a "magic auditor’s report" from PwC that implicated Credit Suisse, Jeanneret said.

He also dismissed Campa’s demand for documents from the Securities & Exchange Commission and any theories that Ivanishvili was trying to hide the fact his investment in Raptor had passed the 5% threshold that requires shareholders to disclose the fact.

"I do however agree with you that we are all concerned about the $1.5m that Mr Ivanishvili paid to Mr Lescaudron," Jeanneret said.

In the indictment, Bertossa alleges that Ivanishvili wired $1.5m of payments to Lescaudron in 2008 and 2009. The payments remain something of a mystery to date, lawyers on both sides of the case have said.

‘Simplistic’ probe

Speaking for a third Russian victim, lawyer Alec Reymond said that Geneva prosecutor Yves Bertossa’s decision to split his investigation to focus just on Lescaudron was overly simplistic.

"The Geneva attorney-general’s office decided that a man who had lied for years is suddenly telling the truth," Reymond said. "And then, probably because it didn’t want to spend another two years of investigation, decided to pursue a split proceeding."

Bertossa rejected the suggestion his investigation was incomplete.

"You are being asked to send a trial back for an investigation of someone who has been investigated and detained for two years, because they want further information,’’ Bertossa said in his rebuttal. "Mr. Lescaudron admitted to what he’s accused of. Nothing in the dossier suggested there was co-activity.’’