Commentaries

Can obtaining a COVID credit fraudulently lead to criminal consequences, and if so, what are they? In ruling 6B_295/2022, the Swiss Federal Supreme Court upheld the conviction of a greedy entrepreneur for money laundering. The ruling also provides an opportunity to discuss other criminal offences that may be relevant. A quick (re)contextualization before turning to the case at hand: in March 2020, the COVID-19 pandemic strikes with full force. To help companies affected by this crisis, on March 25, 2020,[...]

The world of sustainable finance seems to be in a constant state of flux. New products, neologisms and acronyms follow one another at a pace that can make your head spin. On October 12 alone - by way of example - the G7 expressed its support for a whole series of international initiatives in this field, and the Swiss Confederation issued its first "green" bond. Legal and regulatory news is no exception to this effervescence, and there are already dozens[...]

If the bank executes unauthorized transactions, should the customer file a claim for enforcement or damages? This depends on whether the fraud is internal or external, as stated by the Swiss Federal Supreme Court in ATF 149 III 105 (ruling 4A_407/2021). The facts can be simplified as follows: a relationship manager, in charge of a bank's Turkish desk, carries out transactions (Forex operations, investments, transfers, etc.) on the accounts of several customers, without having received prior orders. In order to[...]

Not comparing an order received by e-mail with one received by post? A serious error, according to Federal Court ruling 4A_425/2021. Following the death of a customer, a Swiss bank required the heirs to send the bank account instructions by post, in order to obtain the signatures of all the heirs. In practice, the account manager has regular telephone conversations with the deceased's son. The latter tells him that the heirs must pay EUR 141,599.85 to the notary in charge[...]

What could Kim Kardashian, Nabilla and the Swiss Federal Supreme Court possibly have in common? Not much, a priori. However, the promotion of online trading courses and cryptoactives concerns all three. The first two have been fined, one for promoting a website offering online trading courses, the other for promoting a cryptoasset. Both failed to inform their subscribers that they were being remunerated for their publication by the companies in question. For its part, the Swiss Federal Supreme Court recently[...]

The Swiss Federal Supreme Court has handed down its ruling (TF 4A_601/2021 of September 8, 2022) in a case followed with some trepidation by practitioners, but without providing a federal jurisprudential answer to the question of whether retrocessions received in the context of an execution-only relationship are subject (or not) to the duty of restitution. The suspense was at its height, as the Federal Supreme Court had the opportunity to consider, for the first time to our knowledge, the scope[...]

The end of the summer saw the publication of two Federal Supreme Court rulings concerning civil claims by adhesion to criminal proceedings (6B_1310/2021, summarized in Lawinside.ch/1231 and 4A_417/2021, commented in Lawinside.ch/1232). This case law is of practical importance in banking disputes, where the question regularly arises as to which procedure customers should initiate to assert their civil claims against a bank and its employees. The Court of Criminal Law first ruled that the notion of "civil claims" in art. 122[...]

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[...]

The Asset Management Association Switzerland (AMAS) has published a voluntary sustainability self-regulation aimed at improving the framework conditions for the creation and management of sustainable collective investment schemes (CIS). This self-regulation will come into force on September 30, 2023, and will impose binding guidelines for financial institutions - members of AMAS - that produce and manage PCCs in relation to sustainability. AMAS thus complements the Swiss Bankers Association's self-regulation of sustainability criteria in customer advice (commented in cdbf.ch/1241). For the[...]

In its new Corporate Criminal Enforcement Policies memorandum of October 2022, the DoJ states that priority will be given to the prosecution of individuals, and stresses the importance of companies voluntarily disclosing information about the individuals involved. Only the cooperation of the company under investigation would enable it to benefit from mitigation or exemption from the penalty incurred. In proceedings against foreign companies, the importance of parallel prosecutions by foreign authorities, targeting both the companies and individuals concerned, is also[...]

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[...]

On June 28, 2022, the Swiss Bankers Association (SBA) published two self-regulatory guidelines on sustainable finance for its members. The first guideline concerns the integration of ESG preferences and risks by financial service providers (providers) in their investment advisory and asset management activities. The second directive is aimed at mortgage providers, who are required to address the issue of energy efficiency and the preservation of the long-term value of buildings when granting financing. The present commentary is limited to presenting[...]

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[...]

The Swiss Federal Audit Office has carried out an audit to assess the effectiveness of MROS's work. The report focuses on three areas: the organization of MROS ; the processing of information by MROS; and collaboration with other stakeholders in the fight against money laundering (private sector, supervisory and prosecuting authorities, and other financial intelligence units). With regard to the first point, the audit concludes that the integration of MROS into fedpol is appropriate, but recommends that internal regulations be[...]

On March 24, 2022, the International Organization of Securities Commissions (IOSCO) published a report on decentralized finance (DeFi). This report aims to present and analyze the functioning of DeFi in terms of technology, products and services, and key participants, while taking into account various risks. The report, although relatively succinct, is relatively dense. This commentary is limited to some of the salient points. Between questions and recognition The main objective of DeFi, recognized by IOSCO in its report, is to[...]

At its meeting of March 11, 2022, the Federal Council approved a revision of the Ordinance on the Organization of Government and Administration (OLOGA). A new art. 24a OLOGA has been adopted to specify the Federal Council's tasks in terms of "supervision and control" ("Aufsicht und Steuerung") of the federal administration's autonomous entities ("Verselbstständigte Einheiten"). Could this revision - which comes into force on July 1, 2022 - undermine FINMA's independence? The current framework governing the supervision of entities made[...]