Case-law

On the one hand, the head of the US desk who encourages his employee, a senior manager, to prospect for US customers, despite internal rules to the contrary. On the other hand, this executive, who is trained and informed of the risks associated with US persons, continues to travel to the USA to meet potential customers. Following an investigation that lasted almost four years, involving thousands of allegations and the hearing of almost forty witnesses, the Swiss Federal Court weighed[...]

The Swiss Federal Supreme Court recently clarified the application of the rules on the disclosure of holdings in collective investment schemes (art. 120 ff. LIMF) in a ruling 2C_546/2020 of August 18, 2022, intended for publication. In particular, it held that the parent company of a group composed of collective investment schemes must disclose the latter's holdings on a consolidated basis. At issue in this case were two foreign-based financial services companies. The first (the controlled company), based in the[...]

Can the injured party of a money laundering act committed by a foreign debtor apply for LP sequestration of assets located in Switzerland? In its published decision 5A_709/2018, the Swiss Federal Supreme Court examines the condition of a sufficient link between the claim and Switzerland as a condition for the admissibility of a sequestration under art. 271 para. 1 no. 4 LP. In criminal proceedings in Italy, Marc is accused of breach of trust (appropriazione indebita) for embezzling over EUR[...]

Does the Federal Tax Administration (FTA) have a duty to inform persons who are involved, but not directly targeted, in a request for international administrative assistance ("third parties")? Reading this question may give you a feeling of "déjà vu". And rightly so. The FTA's duty to inform third parties has already been the subject of several decisions, commented on on this site (cf. in particular. ATF 143 II 506 commented in cdbf.ch/982/ and 2C_310/2020 commented in cdbf.ch/1169/). With ruling 2C_825/2019,[...]

In a ruling 5A_13/2022, the Swiss Federal Supreme Court examines whether the beneficiary of claims asserted - in the context of a bank bankruptcy - could or should have recognized the bank's fraudulent intent under art. 288 LP. Anne is a client of Banque Privée Espírito Santo (Suisse) SA, based in the canton of Vaud. This establishment is part of the Espírito Santo group, of which Anne's family is a founding member. In the course of 2014, one of the[...]

In 2012, art. 8 of the Data Protection Act (DPA), which allows access to personal data, was seen as a potential "new weapon" for customers wishing to obtain information from their bank (Fischer in cdbf.ch/821/). In 2020 and 2021, the Federal Court expressly limited this right of access. In the decision commented on here, the Geneva Court of Justice confirms the limits of art. 8 of the DPA, as a customer attempted to use it to gain access to various[...]

In a ruling handed down on April 21, 2022 (4A_412/2021), the Swiss Federal Supreme Court has upheld a decision handed down by the Cantonal Court of the Canton of Vaud, which dismissed a customer's claim against a bank concerning highly leveraged forex transactions (1:100) that caused losses following the abandonment of the CHF/EUR floor rate on January 15, 2015. The dispute focuses on the following four main points. I. Qualification of the contractual relationship The customer complains that the bank[...]

In a ruling 4A_525/2021 intended for publication, the Swiss Federal Supreme Court clarifies the scope of res judicata of a first judgment in the context of a second lawsuit concerning a partial action for damages brought by a customer against her bank. Following turbulence on the financial markets in 2018, the foreign currency positions held by a company with a Swiss bank experienced significant fluctuations in value, resulting in insufficient account coverage. On August 10, 2018, the bank sends a[...]

In a ruling 6B_45/2021 of April 27, 2022, the Swiss Federal Supreme Court confirms the conviction (in absentia) of a former bank employee - whom we shall refer to as Albert - for economic intelligence services (Art. 273 StGB) and money laundering (Art. 305bis StGB). In short, Albert was accused of having, between 2005 and 2012, collected and stolen customer data before selling it to the German authorities in summer 2012. Then, in August 2012, he opened an account in[...]

What information can a client receive from her bank in a dispute over a margin call? The Swiss Federal Supreme Court recently addressed this question in ruling 4A_599/2019 (commented in cdbf.ch/1190/). It is now confronted with this question again in ruling 4A_436/2020, which concerns the same set of facts. In October 2012, a Lebanese company opened an account with a Swiss bank. The client invested in "in-house" OTC options and structured products designed and issued by the bank, which was[...]

The Swiss Federal Supreme Court recently examined the scope of a bank's obligation to render an account to its client, not in relation to retrocessions received by the bank (a question which has been the subject of abundant case law, cf. cdbf.ch/1145), but in relation to retrocessions allegedly paid by the bank to a third party (TF 4A_436/2020 of April 28, 2022). This ruling was issued in the context of the contractual relationship between a Lebanese company (client) and a[...]

In a ruling 2C_380/2021 of February 28, 2022, intended for publication, the Swiss Federal Supreme Court examines a case involving the transfer of several real estate assets from an occupational pension scheme to an investment foundation whose investors are exclusively pension funds. A pension fund owns a large number of properties, mainly in the canton of Zurich. It wishes to transfer its real estate holdings to an investment foundation - also dedicated to occupational benefits - in exchange for participation[...]

In a ruling 4A_66/2022 of March 25 concerning a standby letter of credit, the Swiss Federal Supreme Court ruled that the existence of criminal proceedings potentially directed against the standby beneficiary justified a stay of the civil proceedings aimed at determining the merits of the standby claim. A bank was mandated to issue several standby letters of credit ("LCS") in favor of a long-standing customer, the purpose being to guarantee the beneficiary payment by C ("C") of the agreed price[...]

In an execution-only banking relationship, does the bank necessarily have to make good the loss suffered by the customer when it acquires securities without prior authorization? Case 4A_469/2020 answers in the negative. In April 2005, a customer opened an account with a bank in Lugano, and to this end signed the general terms and conditions, as well as a residual bank clause. Following the opening of the banking relationship, the customer invested in equity funds through an advisor at another[...]

In a ruling 2C_624/2021 of March 28, 2022, intended for publication, the Swiss Federal Supreme Court examines the question of the levying of transfer duties when a contractual investment fund changes management. Specifically, the case concerns a real estate fund reserved for qualified investors. In 2019, a contract provides for the "gratuitous" transfer of management from Ancienne SA to Nouvelle SA. It also stipulates that the new management takes over from the former management as debtor of the fund's mortgage[...]

Switzerland's four largest gold importers can rest assured: tax secrecy should (again) prevail over transparency, according to Federal Administrative Court ruling A-741/2019 of March 16, 2022. At the root of this case is the Society for Threatened Peoples. In 2018, this association submitted a request to the Federal Office of Customs and Border Protection (FOCB) based on the Transparency Act (LTrans). It wished to obtain complete statistics on gold imports by the four largest importers, including quantities, broken down by[...]

How should a bank react to contradictory instructions issued within hours of each other by the joint account holders? In whose hands must it act? In ruling 4A_630/2020, the Swiss Federal Supreme Court clarifies the rights and obligations of a bank receiving contradictory transfer orders relating to a joint account. A father and son opened a joint account with a bank, on which each had individual signing authority. The assets in this account amount to around EUR 20,000,000. On the[...]

India requests information from Switzerland about Anne. Anne is said to hold an account with bank ‘B.’ through trust structures (Truststrukturen). After a procedural mishap, the FTA agrees to pass on to its counterpart the information that the person concerned is a ‘beneficiary of the overlying trust of the company holding the account with the number xxx […]’. Anne challenges this decision before the Federal Administrative Court, which partially upholds her appeal. Still dissatisfied, she appealed to the Federal Court[...]

In rulings 4A 365/2021, 4A 366/2021, 4A_367/2021 and 4A 368/2021, the Federal Court looks at the contractual relationship between an asset management company and external managers: in this case, it will be categorised as an employment contract, despite the employer's attempt to attribute a different assessment to it from the perspective of the delegation of tasks. Four managers approached an asset management company with a view to a collaboration agreement for the creation and management of an investment fund. The[...]

Following the US sanctions against Russia for its annexation of Crimea, the Federal Supreme Court, in its ruling 4A_84/2021, examined the scope of the grounds justifying a refusal of the payment services falling under the universal service of the Post Office. In April 2018, Viktor Vekselberg, a Russian citizen and Swiss resident, was placed on the list of Specially Designated National and Blocked Persons (SDN) by the US Office of Foreign Assets Control (OFAC) as part of the sanctions against[...]