Credit Suisse Finds 'Material Weakness' in Its Financial Reporting

Credit Suisse acknowledged "material weakness" in its financial reporting Tuesday as it scrapped bonuses for top executives in the wake of the bank's worst annual performance since the global financial crisis. From a report: The embattled Swiss lender also said chairman Axel Lehmann had proposed to "voluntarily waive" a share award worth 1.5 million Swiss francs ($1.6 million) for the 2022-2023 financial year, given the firm's "poor financial performance." Credit Suisse (CSGKF) said in its annual report that it had found "the group's internal control over financial reporting was not effective" because it failed to adequately identify potential risks to financial statements. The revelations come just days after the bank delayed the publication of the annual report after an eleventh-hour query from the US Securities and Exchange Commission over cash flow statements for 2019 and 2020. The board concluded that the "material weakness could result in misstatements of account balances or disclosures that would result in a material misstatement to the annual financial statements of Credit Suisse," the annual report said. Credit Suisse is urgently developing a "remediation plan" to strengthen controls.

Oh noes.. the Rich People's Bank in trouble?

[TigerPlish]

Oh noes! The Rich People's Bank is in trouble? What will we ever do?

Me, personally, if Suisse goes down, I will celebrate with a single-malt and a cigar. Suisse caters to those who wish to hide their finances from scrutiny from governments.. basically tax cheats / tax dodgers.

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[Kokuyo]

My mortgage is running out at the end of this year. I will not be shedding a tear and I certainly won't stay with the bank.

In fact I wish I had realized back then that the bank I was dealing with belonged to CS...

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[TigerPlish]

Lucky you! (I mean that whole-heartedly, not sarcastically)

Debt is slavery. Very hard to not have debt when houses cost what they do, and same with cars.

I have a ways to go on my mortgage. But even so, I look at what I pay for mortgage, and what rent would be these days if I were still renting, and I"m still in good shape, unexpected repairs and all that included.

Had I been renting, with the pace of rent increases in Florida, I'd been in a real shit sandwich.

But it's still a rock around my neck, that mort

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[iMadeGhostzilla]

I refused to play that game and I bought a house in another country for cash despite reltively small savings for my /. id. The quality of life in the town where the house is is good and I can work remotely. There are also great undervalued areas in the US as well.

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[Kokuyo]

Oh I'm not done paying, it's just this contract that is running out.

I worry about the rich's money

[rsilvergun]

because we gave them nearly unlimited power and we steadfastly refuse to take it away. So when they hurt, even the tiniest bit, they always take it out of our hide, like a particularly nasty slave master.

Re:Oh noes.. the Rich People's Bank in trouble?

[Corbets]

I lived 13 years in Switzerland - 2 working for CS. It is not the country or bank your ignorant stereotypes portray.

If you’re interested in tax cheats, look at Delaware corporations. That’s a much easier, much closer to home way to cheat Uncle Sam, but nobody wants to actually solve the problem, so it’s better to demonize someone far away who is “not us”.

Anyway, I still can’t figure out why this story is on Slashdot.

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[martinX]

Can someone explain this:

What draws companies to the Corporation Trust Center is not its drab, yellow brick exterior, but rather the Delaware General Corporation Law (DGCL), often referred to as the single most important corporate jurisdiction since the beginning of the 20th century. The DGCL allows businesses based in other states... to file their taxes in Delaware, whose unusually low corporate tax rate saves major corporations billions in taxes.

Isn't this state taxes? That would mean the company is still

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[spun]

More than just a regular old rich people's bank, this is THE bank for laundering dirty Russian money so the oligarchs can use it outside of Russia. If it goes tits up, the world will rejoice, as a major source of Evil dark money will be gone. Online discourse will become less rancorous as Russian troll farms don't get paid. And the Ukrainians will have an easier time wiping the floor with the sorry excuse for an army the Russians can field. So all in all? This is cause for celebration!

Possibly crypto sweep

[Okian Warrior]

Oh noes! The Rich People's Bank is in trouble? What will we ever do?

Me, personally, if Suisse goes down, I will celebrate with a single-malt and a cigar. Suisse caters to those who wish to hide their finances from scrutiny from governments.. basically tax cheats / tax dodgers.

People have noticed that many of the banks that have failed or been taken over by the regulators have been heavy into crypto.

Signature bank (according to Barney Frank) didn't actually fail, but the FDIC took over anyway.

It's been suggested that the current stress (and bank failures) is the Fed doing a "controlled burn" of crypto asset holding banks in order to pave the way for a national crypto monetary system.

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[martinX]

It's been suggested that the current stress (and bank failures) is the Fed doing a "controlled burn" of crypto asset holding banks in order to pave the way for a national crypto monetary system.

Or things that the bank counted on as assets were just puffs of smoke.

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[gtall]

You outta be on Fox, they go for unsupported conspiracy theories. Hell, you don't even have to convince Fox they are true, just sellable to the gullible.

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[Growlley]

but how are they then going to claim their losses back from the tax payer without declaring it?

what's that smell?

[jm007]

accountability and C-suite smell funny when mixed together.... just not used to it; being a natural cynic, I strongly suspect there's more to it than we get post-PR spin; perhaps there are other unmentioned incentives, facts, etc., that were intentionally left out of the discussion

does this also mean all the folks who don't get a say in how things are run, but nonetheless worked hard and were productive, will have to forego any bonuses? I'd certainly have more respect for the gesture if the execs were th

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[Kokuyo]

Well, simply put those 1.5 million sound like a lot to us plebs but I'm sure is just a negligible fraction of the compensation this man gets through all channels available to him.

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[torkus]

That share award will be worth a whole lot less as their stock price tanks.

Better to seem responsible, boost the company, etc. and have the remaining millions of his portfolio go up (or down less). Plus honestly, it's cheaper for him to give it up then fend off the inevitable lawsuits that would follow...which might claw it back anyway.

You saw nothing, ya hear?

[Tablizer]

Zip it! Everyone's jittery about banks of late; you'll trigger a market crash. Slowly drain it and walk out nonchalantly so nobody notices.

Material weaknesses = lies

[Potor]

Fewer words would be better.

“material weakness could result in misstatements of account balances or disclosures that would result in a material misstatement to the annual financial statements of Credit Suisse,”

'We lied' would suffice.

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[R_Ramjet]

Actually, it's more like "You won't be able to tell when we lie."

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[TigerPlish]

'We lied' would suffice.

Are you kidding? Clear and concise language has NO place in business or government! How else would they bury the truth in a sea of lies? /s

There's a whole career built around Bullshitting -- PR lackey. (Ok, there's also ad man, but that's close to PR lackey)

Well...

[Petersko]

This is a problem I have with how the term "lie" is used these days. In order for it to be a lie, it has to have been known to be false when it was said. Otherwise it's not a lie... it's just being wrong. In the same way that if you think you are telling a falsehood that later turns out to be true, you were still lying when you said it.

Were the weaknesses known to the person who certifies the statements, and known at the time of certification?

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[luttapi]

Actually it means "We will continue to lie and there is nothing you can do about it."

Still looking for that Nazi gold though?

[greytree]

So you can give it back to the victims?

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[Growlley]

they gave it back to it's last owners decades ago.

Wow, they can tap dance!

[OneOfMany07]

It wasn't a mistake or a lie, but a "misstatement"? "Financial reporting" (aka what they do to make and track money) needs work?

I think they should just fire themselves and call it good. Or be explicit and real about what they've done, and were not doing that they should have been.

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[Petersko]

I've been involved in post-mortems on projects that failed - relatively small ones to the tune of several million dollars, up to a quarter billion.

When that quarter billion dollar project cratered, there was a huge exercise in determining what, if anything, could be declared an asset and be capitalized, and how much had to be moved from capital expenditures to operating expenses. The project spanned 3 years, and so this was a material question for already published statements that showed capital assets in t

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[Growlley]

they are bankers if you believe otherwise , I just happen to have a bridge for sale.

"material weakness" in its financial reporting

[martinX]

Buffet specifically mentioned this "material weakness" in financial reporting in his annual letter to stockholders.

Finally, an important warning: Even the operating earnings figure that we favor can easily be manipulated by managers who wish to do so. Such tampering is often thought of as sophisticated by CEOs, directors and their advisors. Reporters and analysts embrace its existence as well.

Beating “expectations” is heralded as a managerial triumph. That activity is disgusting. It requires no

Voluntarily waive the share award?

[at0mjack]

If the bank has had poor financial performance (let alone had major failings in internal risk management), then why was the chairman eligible for any share award in the first place?

I have no problem with the C-suite being rewarded for outstanding performance, but if your company is doing significantly worse than expected under your watch then why should you get getting any extra reward over your base salary? There's definitely a double standard here where is the company does well then the C-suite expect

As demografic pyramids flip ...

[Qbertino]

... around the world and productivity hits the steep end of price for performance and the tricky outlier of highly optimized globalization, money value goes *Poof* . There is way to much money in the market anyway and if it's dying backend moneyhoards that take those excess bazillions with them, that's by and large probably a good thing. Better like this than in some extreme depression that takes out huge swaths of society.