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Thomas Gottstein has been CEO of Credit Suisse for 63 weeks. There is no doubt that the overwhelming majority of them, and indeed all of the last eight or so, have been waking nightmares. Surely, however, there have been some consecutive five-day calendrical periods that he has enjoyed the job he has presumably been pining and preparing for most if not all of his professional career, some Fridays when he walked out of his office with a genuine spring in his step and ability to enjoy the weekend as much as any Swiss can enjoy such a frivolity.

This was not that week.

Bank of America Corp. Credit Suisse Group AG and Credit Agricole SA were fined about 28.5 million euros ($34 million) by European Union regulators for colluding in chatrooms on trading of U.S. supra-sovereign, sovereign and agency bonds.

Bank of America got the largest individual penalty of 12.6 million euros, while Credit Suisse was fined 11.9 million euros and Credit Agricole was ordered to pay more than 3.9 million euros. Deutsche Bank AG participated in the cartel but dodged a potential penalty of about 21.5 million euros because it was the first to inform the EU about the illegal behavior.

Twist the knife, why don’t you?

Credit Suisse “continues to believe that the single former employee” criticized by the EU decision “did not engage in anti-competitive conduct,” a bank spokesman said in a statement. The bank said it plans to appeal the fine decision and will “vigorously” defend its position.

And that’s not the only position CS is going to have to vigorously defend in court, nor even the only market manipulation one. And this one really hurts, because it was one market-manipulation allegation out of the countless others that the bank thought it had beaten.

A U.S. Appeals Court reopened a 2018 case alleging that Credit Suisse had engaged in market manipulation of some exchange-traded notes that short the VIX, a popular proxy for volatility…. The appellate judges’ decision said that during these three times, Credit Suisse bought VIX futures contracts to hedge against potential losses on the ETNs. But with insufficient liquidity in the futures markets, Credit Suisse caused prices to spike, and the value of the XIV notes to plummet. The U.S. Appeals Court for the Second Circuit said, “If proven at trial, this alleged conduct was manipulative under our precedents.”

On the bright side, it wasn’t all legal Ls for Gottstein & co. in court this week, although even the one win feels like a loss, given that the embarrassing cat is well and truly out of the bag, meowing loudly about just how bad a job the bank did at preventing one of its own from defrauding Eastern Europeans left and right.

Credit Suisse won an extension of an injunction forcing the report to be removed from the website until a trial is held…. In February, Metigen posted a copy of the critical 2017 report, authored by a Zurich law firm hired by finance regulator Finma, even after Credit Suisse had previously won a ruling from a Swiss court keeping the document confidential…. David Scorey, a lawyer for the bank, said it didn’t seek an injunction against other media outlets because it was only concerned with protecting publication of the report.

And even this very narrow and Pyrrhic-looking victory may not be long for this world.

Judge Collins Rice said she had a “slight niggle” in her mind over a point of jurisdiction. While the website is in English, Ivanishvili is a private citizen who lives outside the U.K. She asked the bank’s lawyer to clarify this afternoon on what basis he was asking her to “restrain his overseas activities.”

BofA Hit Hardest as EU Fines Bond-Trading Trio $34 Million [Bloomberg]
Market Manipulation Case Reopening Adds to Credit Suisse’s Woes [II]
Credit Suisse Sues Billionaire Over Rogue-Banker Report [Bloomberg]

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