NEW YORK — Swiss banking giant UBS will pay nearly $400 million in fines to U.S., Swiss and U.K. banking authorities for the management failures of Credit Suisse, which UBS bought in June, related to how Credit Suisse handled its relationship with collapsed hedge fund Archegos Capital Management.
Archegos failed in 2021, costing Wall Street banks billions of dollars in losses, and Credit Suisse took the brunt of the losses. The Swiss bank took more than $5 billion in losses from Archegos' failure, which over a period of two years, ultimately led to the fire sale of Credit Suisse to UBS in June.
Credit Suisse management was found to give Archegos special treatment through its prime brokerage division, which caused the bank to take on undue risk when Archegos purchased a highly concentrated position in ViacomCBS. The firm's manager, Bill Hwang, is scheduled to face fraud charges for the collapse of Archegos in October.
Credit Suisse failed to “adequately manage the risk posed by Archegos despite repeated warnings,” the Federal Reserve said in a statement on Monday. The announcement was made by the Fed alongside the Bank of England and the Swiss Financial Market Supervisory Authority.
Sourse: abcnews.go.com
