Commentaries

In ruling 6B_1176/2022 of December 5, 2023, the Swiss Federal Supreme Court overturns the acquittal of the former Chairman of the Board of Directors of a bank by the Court of Appeal of the Swiss Federal Criminal Court on the charge of violation of the duty to report under art. 37 para. 2 AMLA. The background is as follows. Albert was CEO of a bank from September 1, 2008 to September 30, 2012, before becoming Chairman of the Board of[...]

Even if the company carrying out the credit scoring is not the company that ultimately decides whether to grant a loan, it takes an automated individual decision and must therefore inform the data subject (CJEU ruling of December 7, 2023 in case C-634/21, SCHUFA Holding AG). Following the refusal of a loan by a bank, a German national requested various items of information from SCHUFA, the leading German company for credit checks. The refusal of the loan was justified on[...]

On December 19, 2023, FINMA published its report on Credit Suisse. This report discusses the background to the collapse (I.), and draws some "lessons learned" (II.). I. In 1856, Alfred Escher helped set up a company that excelled in commercial lending. The Schweizerische Kreditanstalt borrowed from Paul or Virginie at a lower rate than that at which it lent to "Rail" or "Wagon SA", and grew rich on the interest differential. One thing led to another, and the bank moved[...]

Do accounts opened with a Swiss bank by a foreign insurance institution (in order to deposit the premium paid by each of its policyholders) benefit from the privileged treatment of deposits? In ruling 5A_362/2023 of September 28, 2023, the Swiss Federal Supreme Court answered in the negative. The facts are as follows. A Luxembourg insurance institution offers life insurance contracts. For each policy taken out, the insurance company opens an individual account with a bank to deposit the premium paid[...]

On November 29, 2023, the Swiss Federal Data Protection and Information Commissioner (FDPIC) published nine recommendations relating to the acquisition of Credit Suisse by UBS. In essence, the Commissioner draws a distinction between, on the one hand, documents drawn up or communicated after the entry into force of the Necessity Ordinance of March 16, 2023 (Necessity Ordinance), access to which is expressly excluded under the Transparency Act (TransG) and, on the other hand, earlier documents which fall under TransG and[...]

In its decision 858/01 of November 1, 2023 in the case of VT5 Acquisition Company AG, the Swiss Takeover Board (STB) was asked to establish its practice with regard to De-SPACs (transactions whereby a Special Purpose Acquisition Company (SPAC) acquires its target). This decision was eagerly awaited, given that VT5 Acquisition Company AG (VT5) is the first SPAC under Swiss law. First of all, for a brief reminder of what a SPAC is and its specific features, please consult the[...]

On November 14, 2023, the Control Committee of the Council of States (CdG-E) published its follow-up report on the Confederation's involvement in the implementation of economic sanctions. Following recurrent criticism of Switzerland's policy in this area, which some consider too strict, others too lax, the Management Committees of the Federal Chambers of Parliament (CdG) had already decided in 2016 to commission the Parliamentary Control of Administration (CPA) to evaluate the Confederation's involvement in the application of economic sanctions. The task[...]

The Zurich Handelsgericht validates a margin call with a short delay of just over 24 hours in ruling HG200220-O of October 27, 2022, published on November 1, 2023. In this case, the CEO of a company based in Scotland, a qualified "professional" investor, and his ex-wife open a banking relationship with a bank in Zurich. They are both linked to the bank by a high-risk investment advisory relationship. As part of the banking relationship, the bank grants them a Lombard[...]

In a recent ruling, a bank manager was unsuccessful in his bid to obtain back pay, when he demanded a recalculation of his bonus based on assets under management that he claimed to have contributed to his employing bank (TF 4A_519/2022 of October 12, 2023). The facts were as follows: in 2009, a manager had organized a meeting between a business introducer, whom he knew, and a member of a bank's executive committee. Shortly afterwards, a second meeting was organized[...]

In a ruling handed down in the context of criminal tax law proceedings, the Swiss Federal Supreme Court has upheld the appeal lodged by bank account holders who had been denied the right to request the sealing of the documentation produced (ruling 7B_99/2022 of September 28, 2023). The background can be briefly summarized as follows. On the authorization of the Federal Department of Finance, the Federal Tax Administration (FTA) is conducting an investigation into suspicions that two individuals and a[...]

Is there a necessary link between control on the Board of Directors and control through a shareholder's voting rights? The Swiss Takeover Board (STB) had to decide this question in its decision 853/01 of August 31, 2023 in the case of GAM Holding AG. The STB had to rule on the validity of a clause conditioning a voluntary offer on the possibility of appointing all the members of the board of directors of a listed company. The appeal lodged against[...]

On October 19, 2023, the FATF published its fourth enhanced follow-up report on Switzerland since the 2016 mutual evaluation. The report is limited to Switzerland's progress in improving its compliance with Recommendations 10 (due diligence) and 40 (international cooperation). The FATF has highlighted three main improvements (two in connection with recommendation no. 10, one in connection with recommendation no. 40). The first is the amendment, with effect from January 1, 2023, of art. 4 para. 1 AMLA, which now expressly[...]

In a recent decision, the Criminal Appeal Court of the Vaud Cantonal Court confirmed the plaintiff status of a company taking over a company following a merger by absorption (decision Jug/2023/314 of May 4, 2023, published on October 23, 2023). This is a deliberate departure from the strict case law of the Swiss Federal Supreme Court. The ruling in question is not final. It is therefore possible that the matter will be brought before the Federal Court in the near[...]

The issues surrounding the return of retrocessions can be simplified into two questions: (i) must a retrocession be returned to the client? If so, (ii) how much information must the client be given in order to validly waive this return? In its ruling HG210223-O of June 21, 2023 (now in force), the Zurich Handelsgericht confirms its case law to the effect that a bank bound by an execution-only relationship with its customer is obliged to make restitution. The court also[...]

How can an insurer object to having to compensate a listed company for damage estimated at nearly a million following a successful cyber attack? On the grounds that the payment would contravene US sanctions, since the cyberattack was allegedly the work of Russian hackers under sanctions. However, the Zurich Handelsgericht and then the Swiss Federal Supreme Court were not convinced by this argument (4A_206/2023). In July 2020, a company listed on the NYSE fell victim to an attack by the[...]

The Federal Council has just announced that it does not wish to pursue work on the creation of a trust under Swiss law. The final say will rest with the Federal Assembly, which could refuse to shelve the 2018 motion, but such a refusal is unlikely. Why did this project fail? Was it unnecessary? One might have feared that the introduction of the trust as an institution of Swiss private law, enshrined in the Code of Obligations without being a[...]

15 years after the collapse of Lehman Brothers and 13 years after the FINMA reports "Madoff affair and distribution of Lehman products: implications for investment advisory and wealth management activities" and "Distribution of financial products to private clients", the collapse of the Lehman Brothers investment bank is back in the spotlight. the collapse of the Lehman Brothers investment bank is back in the spotlight of the Swiss legal scene. Should a bank compensate a client who has suffered a financial[...]

The Federal Council's preliminary draft revision of the anti-money laundering provisions, put out to consultation on August 30, is, in part, déjà vu. Indeed, when the Money Laundering Act (AMLA) was last amended - and came into force less than nine months ago - a parliamentary majority curtly refused to make certain activities linked to the creation and management of domiciliary companies or trusts subject to the AMLA. As the representative of the Federal Council pointed out during the parliamentary[...]

Investing your savings in a start-up or crypto-currency involves risks. If the investment ultimately proves unsuccessful, can the investor complain of a scam in an attempt to recover his or her stake? In a final decision dated March 21, 2023 (ACPR/206/2023), the Geneva Court of Justice ruled in the negative, rejecting the appeals of some twenty unfortunate investors who felt they had been duped. A group of companies (called "S") is developing a payment system that can be used with[...]

In its ruling 4A_263/2022 of June 23, 2023, the Swiss Federal Supreme Court rejected an application for ancillary intervention by the heirs of a customer whose assets had allegedly been misappropriated, in proceedings pending between the bank and the current holder of the said assets. The Federal Court considers this to be a misuse of a procedural tool to exercise a substantive right of accountability. E., who died in 2014, held an account with Bank B SA in Geneva. His[...]

What are the requirements for proof of investment damage in an investment advisory relationship? In its ruling 4A_131/2022 of June 20, 2023, the Swiss Federal Supreme Court reiterates that the customer cannot simply claim, without supporting evidence, that the damage was too difficult to quantify, or that no investment would have been made if the bank had provided adequate advice (see also 4A_202/2019 commented in Laurent Hirsch, cdbf.ch/1110/). Between March 2012 and May 2013, a client had an investment advisory[...]

In the course of unsealing proceedings, the disputed data may not be passed on to other parties and participants in the proceedings, even if disclosure is prohibited. This is what the Federal Supreme Court said in its decision 1B_635/2022, 1B_636/2022 of June 15, 2023. The Geneva Public Prosecutor's Office was conducting criminal proceedings for various economic offences against former and current employees of a bank. In June 2022, it carried out a search of the bank's premises. All e-mails in[...]

To what extent can a person whose data is subject to an automatic exchange of information demand that the Federal Tax Administration (FTA) issue a challengeable act? The Federal Supreme Court addresses this question for the first time in its ruling 2C_946/2021 of June 6, 2023, which is intended for publication. Information relating to a trust and its two settlors (both Argentine residents) was transmitted to the FTA as part of an automatic exchange of information in tax matters. Believing[...]

Is an employee who fails to negotiate down the price of work awarded to a third party, and who receives retrocessions on the price paid to the third party, guilty of unfair management towards his employer within the meaning of art. 158 of the Swiss Criminal Code? The Federal Supreme Court's decision 6B_280/2022, 6B_287/2022 of April 14, 2023 is in the affirmative. The facts can be summarized as follows: between 2003 and 2012, two employees set up a scheme with[...]

If the principle of speciality is violated as a result of administrative assistance, does the person concerned have a right to have the Federal Council intervene with the requesting state? In a ruling 2C_236/2022, intended for publication, the Federal Supreme Court clarifies whether positive obligations against Switzerland can result from arts. 8 and 13 ECHR. In 2011, FINMA granted administrative assistance to the French Autorité des marchés financiers (AMF), which requested the transmission of documents relating to transactions carried out[...]

The Federal Supreme Court's decision 1B_92/2023 of May 11, 2023 is in line with case law: at the sealing stage, the right not to incriminate oneself does not preclude the use, in (administrative) criminal proceedings, of an internal investigation report drawn up by a bank on behalf of FINMA. The case of inexploitability of the evidence is not clear-cut and the question must therefore be dealt with by the trial judge. In 2017, FINMA sent a criminal complaint to the[...]

In its ruling 4A_389/2022 of March 14, 2023, the Swiss Federal Supreme Court examined a request for mutual assistance in civil matters, in which a bank was asked to provide documents relating to a client. In 2012, the MPC opened criminal proceedings against the former CEO of a state-owned institution in Y for money laundering and fraudulent mismanagement. Judging that there was a risk that the documents obtained in the criminal proceedings might be passed on to State Y, the[...]

On May 17, the Europe Middle East & Africa Credit Derivatives Determinations Committee (DC) of the International Swaps and Derivatives Association (ISDA) issued an initial ruling on the absence of government intervention constituting a credit event for credit default swaps (CDS) on Credit Suisse's subordinated bonds for the amortization of Additional Tier 1 (AT1) bonds. The day after its decision, the DC received a second request to establish whether a bankruptcy constituting a credit event had occurred in respect of[...]

In a recent decision intended for publication, the Swiss Federal Supreme Court confirms that a request for mutual assistance for the enforcement of a foreign decision imposing a sanction corresponding in Switzerland to a compensatory debt (art. 71 CP) can only be executed in application of art. 94 ff EIMP (TF, 21.04.2023, 1C_624/2022). In 2011, following requests for mutual assistance from Belgium, the Zurich Public Prosecutor's Office ordered the precautionary seizure of the bank assets of a man named Edouard[...]

All the players involved - CS/UBS, FINMA, the Swiss National Bank and the Federal Department of Finance - should begin by themselves examining the takeover of CS by UBS ordered by the authorities. This would provide a starting point and framework for parliamentary clarification, and facilitate a fact-based Swiss and international discussion on the regulation and supervision of globally systemically important banks such as the future UBS. A necessary update The takeover of CS by UBS, ordered by the authorities,[...]