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Is Credit Suisse Still at Risk in Massive Forex Scandal After Deutsche and HSBC Settle?

October 2, 2017
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Credit Suisse was left in the lurch last week as HSBC and Deutsche Bank both came to separate settlements with the Federal Reserve over a Forex scandal that has plagued them for four years.

Reuters reports that:

The fine follows others of more than $4.3 billion levied by the U.S. Commodity Futures Trading Commission and Britain’s Financial Conduct Authority on six banks including HSBC in November 2014.

The scandal saw many big banks implicated in a currency manipulation scandal that has stymied investor confidence and growth for some time. At the time of the settlement, Deutsche’s stock was up. In their case, Bloomberg reports that:

Investors [on] Sept. 29 asked a federal judge to approve a $190 million agreement with Deutsche Bank to settle claims the financial institution rigged currency prices in the foreign exchange market.

Perhaps analysts predicted a far heavier fee, causing the German bank to rise. Bloomberg says that if the settlement is approved it would leave only one bank left to foot the bill; Credit Suisse.

The results of this settlement could be disastrous for the Swiss. After years of being plagued by calls for more transparency which has undermined their banks values, they will now be stuck fighting an intense legal battle all alone. The company has been in a downward spiral for the past two years and this news will not do them any favours.

Investors should evaluate the risks of investing in Credit Suisse with this news out.

With respects to Deutsche and HSBC, this latest development may relieve them of some of their legal headaches and allow them to focus on other difficulties they may be facing.

To read Reuters‘ article on HSBC’s settlement, click here.

To read Bloomberg’s story on Deutsche’s settlement, click here.

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