UBS Under US Investigation for Handling Russian Client Funds After Taking Over Credit Suisse

The Russian client funds were inherited from Credit Suisse after its collapse.

By Thea Felicity

Nov 13 2024, 10:55 AM EST

SWITZERLAND-UBS-BANKING-EARNINGS — A sign and logo of the Swiss giant banking UBS is seen in Lausanne on February 6, 2024. Swiss banking giant UBS said on February 6, 2024 it would hand shareholders up to 1 billion US dollars in share buybacks as it posted a smaller-than-expected quarterly loss stemming from the costs of absorbing fallen rival Credit Suisse. FABRICE COFFRINI/AFP via Getty Images

UBS will undergo investigation from the US after Russian link were found when it took over Credit Suisse.

US Authorities stated that UBS handled Russian client funds that were transferred to UBS. OFAC, or the US Treasury, will analyze whether UBS has properly managed accounts belonging to these individuals and entities after the acquisition of Credit Suisse just this year,

According to Reuters, handling Russian money is still risky at this time due to the sanctions imposed for its invasion of Ukraine.

However, the largest bank in the world argued that it inherited a number of Russian clients from the collapsed company in 2023 due to a series of scandals. While UBS has been working to separate any questionable accounts, the US authorities are concerned that some funds may have violated sanctions.

Russian Funds in UBS Under Sanction

For the US, these sanctions are foreign policy tools that restrict financial dealings with certain countries, especially Russia.

If UBS is found to be violating these sanctions, the consequences could be severe, including fines or even being cut off from the global financial system.

The bank has been cooperating with the investigation and has been trying to isolate any accounts that could cause problems. At the moment, all Credit Suisse's records are under review and the UBS is moving quickly to offload clients and assets that do not meet the required standards, per RBC Ukraine.

The concern over Russian money is not new since before its collapse, Credit Suisse was found to be managing a massive amount of funds from Russian clients, with some estimated to be around $35 billion. Other banks, mostly Swiss, are also under criticism for their lack of transparency for Russian funds. Both Swiss and US authorities are working together to improve banking regulations and prevent illicit financial activity.