In a revealing investigation published last Sunday by Sonntagszeitung reporters Arthur Rutishauser and Jorgos Brouzos, new light was shed on the Greensill affair that has rocked Credit Suisse to its core. Citing over 700 pages of internal documents released in a London court—including two detailed reports from Swiss law firm Wenger Plattner, commissioned by FINMA, and a damning summary from the Swiss financial regulator—the article paints a picture of systematic failure and negligence inside one of Switzerland’s biggest banks.
A Risky Proposition, Sold as Safe
At the center of the debacle is Lex Greensill, an Australian financier whose firm promised to revolutionize supply chain finance. His business model offered upfront payments to companies in exchange for invoices, which were repackaged into supposedly low-risk, high-yield investment products. Credit Suisse marketed these funds to its wealthiest clients, channeling more than $10 billion into them.
Initially, the arrangement appeared sound: invoices were verified by buyers, insurance was in place, and investors saw stable returns—especially attractive amid negative interest rates. But Greensill expanded the concept to include “multi-obligor” deals and the far more speculative “future receivables”—loans based not on actual sales, but on anticipated business. These risky instruments were linked to shaky borrowers such as Sanjeev Gupta’s GFG Alliance, Bluestone Mining, and the now-defunct construction firm Katerra.
Crucially, the insurance backing the investments paid out not to Credit Suisse but to Greensill’s own entities. When Greensill Capital collapsed in 2021, clients and the bank were left dangerously exposed.
Governance Bypassed, Controls Dismantled
Investigators found that Greensill’s products bypassed key internal controls at Credit Suisse. Rather than being classified as “new business” (which would require rigorous review), the funds were labeled as “new products,” skirting stricter oversight. Product board meetings often went ahead with critical absences, including top executives like Michel Degen and Luc Mathys—raising doubts about the integrity of the approval process.
Due diligence was minimal. In 2017, Greensill filled out a brief questionnaire, which investigators later described as inadequate. According to FINMA, even clear contradictions and red flags in the company’s submissions were never scrutinized.
Sales Over Scrutiny
Despite mounting internal concerns, Credit Suisse continued to market Greensill funds aggressively. In 2017, the bank’s in-house magazine featured Lex Greensill in a glowing profile, celebrating his receipt of a CBE from Queen Elizabeth II. Then-global head of asset management Eric Varvel pitched the funds as both flexible and low-risk.
Behind the scenes, sales staff had financial incentives to push Greensill products. Internal advisors earned “shadow revenues” for promoting the funds, while independent advisors—who lacked these bonuses—rarely recommended them. Marketing materials glossed over major risks, particularly those tied to future receivables, even though internal auditors had flagged the issue repeatedly.
Warnings Fell on Deaf Ears
As early as 2017, Credit Suisse executives received warnings. A whistleblower email in 2018 directly questioned the decision to entrust client money to Greensill. Another anonymous tip-off reached CEO Thomas Gottstein in 2019.
Nonetheless, leadership—including then-CEO Tidjane Thiam, chairman Urs Rohner, and wealth management head Iqbal Khan—did not act. A memo was circulated dismissing the concerns, and no internal inquiry followed.
By mid-2020, the scale of the risk had become undeniable. Board member Richard Meddings accused top executives of either gross negligence or worse. Efforts to reduce exposure to Gupta’s companies were ignored by Greensill, who repeatedly broke promises to scale back the risk—even as he pressured CS to increase its investment.
The Aftermath: Collapse Without Accountability
When Greensill Capital imploded in early 2021, it left Credit Suisse reeling. Investors lost billions, and the bank’s reputation suffered a major blow. Not a single executive took responsibility for the failed partnership. FINMA’s findings portray a culture where oversight was weak, red flags were dismissed, and investor trust was sacrificed in pursuit of profit.
