Credit Suisse Missed Many Warnings Before Greensill’s Collapse
- Bank liquidates $10 billion of funds it probed just last year
- The decision adds to a series of risk management lapses
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Long before Credit Suisse Group AG was forced to wind down a $10 billion group of funds it ran with financier Lex Greensill, there were plenty of red flags.
Executives at the bank knew early on that a large portion of the assets in the funds were tied to Sanjeev Gupta, a Greensill client whose borrowings were at the center of a 2018 scandal at rival asset manager GAM Holding AG. They were also aware that a lot of the insurance coverage the funds relied on depended on a single insurer, according to a report. Credit Suisse even conducted a probe last year of its funds that detected potential conflicts of interest, yet failed to prevent their collapse months later.