Signature Litigation has been instructed by the investment fund of Georgian billionaire Bidzina Ivanishvili and his family in a dispute against Credit Suisse for losses over mismanagement of his portfolio in Switzerland, which have led to criminal proceedings against the bank’s fund managers.
Having forged his estimated $5bn wealth in post-Soviet Russia through banking, metals, and real estate, and serving as the prime minister of Georgia in 2012 for one year, high profile tycoon Ivanishvili (pictured) entrusted his money to the bank and claims that unauthorised hazardous trading caused significant losses to his portfolio.
In particular the claim relates to former banker, Patrice Lescaudron, who was in charge of Ivanishvili’s account. Ivanishvili filed criminal complaints with Geneva’s public prosecutor in December and January 2015, alleging fraud and mismanagement.
Signature has now been instructed to oversee global strategy and coordination of claims reported to be worth hundreds of millions of dollars, although the firm declined to comment on the value of damages pursued. Recovery actions against are being brought against the bank’s private wealth team in Geneva and its Bermudian-based life insurer.
In a statement the firm said it is currently considering claims against other parts of the Credit Suisse Group for ‘various alleged failures by Credit Suisse to manage client funds and investments, and as regards monitoring, commissions and preservation of trust assets.’
The most recent financial statements for Credit Suisse, for 2015, made a provision of CHF821m in relation to litigation including claims arising from the various parts of the group which are exposed to similar claims from other wealthy groups.
It is understood Credit Suisse has not yet appointed external counsel for the action – although it is known to primarily use Freshfields Bruckhaus Deringer for disputes work.
In addition to criminal proceedings in Switzerland, Signature is working with its overseas instructed law firms including offshore firm Harneys and has applications pending before the courts in the British Virgin Islands and the Bahamas for permission to bring derivative claims in the name of investment companies in the Credit Suisse structure that was set up to manage the client funds and investments. Signature confirmed it is in the course of preparing proceedings in other jurisdictions.
The upcoming legal battle is an unwelcome distraction for Zurich-based Credit Suisse, which is struggling to shift strategy under new chief executive Tidjane Thiam. In 2014 the Zurich-headquartered bank pleaded guilty to criminal charges that it helped Americans evade taxes, and was fined $2.5bn by the US justice department.
Signature’s appointment to a multijurisdictional dispute signals the increasing acceptance and recognition of the disputes boutique model. Signature’s team is led by partner Adam Rooney who joined the firm from Greenberg Traurig Maher in November 2015, and is working with founding partner Graham Huntley.
Huntley told Legal Business: ‘It is perhaps unusual to see a niche litigation practice instructed to bring such wide-ranging international claims but this is a strong validation of the niche firm offering that may be a sign of more to come.’
Credit Suisse declined to comment.