Dear Credit Suisse, We Saw What You Did There
h/t Market Ticker
A Swiss bank that used its Cayman Islands’ branch to engage in what a US federal judge has branded “predatory lending practices” is being investigated by the US authorities.
Senior officials of Credit Suisse, Switzerland’s second largest bank, are facing claims that they pocketed millions of dollars by dishing out loans that were impossible to repay.
On Tuesday, 15 September, 31 of the bank’s officials received subpoenas demanding that they hand over internal documents that explain why they loaned $375 million to the now bankrupt Yellowstone Club in 2005.
The Yellowstone Club, founded by American tycoon Tim Blixseth, was once valued at more than US$1 billion.
It ran a service providing its uber-wealthy clientele - which included Microsoft billionaire Bill Gates and former American vice president Dan Quayle - with access to a string of luxurious properties across the globe.
The club’s portfolio featured an ocean front villa in Costa Rica, a slope-side chalet in Aspen, Colorado and a palatial nine-bedroom property on its own private island in the Turks and Caicos Islands.
However, the Yellowstone Club ran into severe financial difficulty last year after it struggled to keep up the repayments on a loan taken out with Credit Suisse against a sprawling resort it owned in Montana, US.
Credit Suisse has now been accused of loaning the money in an unorthodox and lucrative deal for the bank that federal bankruptcy judge Ralph B. Kirscher described in May this year as a case of “naked greed” that “shocks the conscience of this court.”
Hey Judge Kirscher, great move but perhaps you can take a look at homicidal maniac Alan Greenspan's unorthodox lending practices? I heard he was basically just giving the stuff away and his replacement has thus far perpetuated his legacy via helicopter drop. That shocks the conscience of this blogger.