Word: ditted
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Last month the officers of Crédit Suisse convened an extraordinary meeting to explain to 3,000 stunned stockholders how the debacle could have occurred. Newly elected Board Chairman Oswald Aeppli was unable to put a specific figure on the bank's losses. So tangled was the trail of the fraudulent investments, he said, that a 100-man Crédit Suisse investigating team has still not sorted out the mess. The investigation could take months longer...
Same Dividend. Other bankers have estimated that the Chiasso affair -named for the town in the Italian-speaking Swiss canton of Ticino where the scandal centered-could cost the firm some $400 million. Nonetheless. Aeppli assured stockholders that the rest of Crédit Suisse's affairs were in good order and indicated that this year's dividend would most likely be the same as that paid in 1976: $32 per bearer share...
...Tempting. The traffic in "hot" Italian funds was all too tempting to Crédit Suisse's Kuhrmeier, manager of the bank's Chiasso branch. He brought huge volumes of business to his bank. Swiss investigators eventually discovered, Kuhrmeier did this by offering depositors 1) interest rates higher than those paid for Eurodollar accounts and 2) written assurances that Crédit Suisse guaranteed depositors' funds. In short, he exploited the advantages of the fiduciary account ploy without obeying its restrictions...
...depositors the higher interest rates, Kuhrmeier had to find riskier investments than the Eurodollar market. He chose a Liechtenstein-based holding company called Texon Finanzanstalt, which he had founded in 1961. Over the years Kuhrmeier funneled $868 million of Crédit Suisse's Chiasso deposits to Texon. The company then bought stakes in more than 150 Italian companies dealing in, among other things, wine, plastics and vacation resorts...
Kuhrmeier concealed this operation from his superiors in Zurich. Whenever bank auditors visited the Chiasso branch, the books that recorded Kuhrmeier's Texon dealings and other incriminating papers were spirited through a private doorway into a collaborating law firm next door. Crédit Suisse's Chiasso branch, says Bernhard Miiller, director of the Swiss Banking Commission, "was a bank within a bank...