Credit Suisse has set aside CHF 624 million ($499 million) after tax or CHF 960 million before tax to cover legal risks associated with the collapse of Enron Corp, certain IPO allocation practices, research analyst independence and other related litigation at its investment banking arm, called Credit Suisse First Boston at the time.
The charge is in addition to the reserve of CHF 702 million before tax originally established in 2002 and brings the total reserve for these private litigation matters to CHF 1.4 billion ($1.1 billion) after deductions for settlements that have since taken place. The charge more than doubles the 2002 reserves and has pulled down second-quarter net profit to CHF 919 million ($735 million), far below expectations.
Credit Suisse is exposed to fallout from the 2001 collapse of Enron., and is among several banks that could face claims for their role in alleged fraud at the US energy company.
