U.S. prosecutors first raised the specter of a criminal plea by Credit Suisse Group AG more than two years after starting an investigation into whether the Swiss bank had helped wealthy Americans evade taxes.
Credit Suisse on Monday became the largest bank in two decades to plead guilty to a U.S. crime and agreed to pay $2.6 billion in fines to prosecutors and regulators, a much more severe penalty than was dealt to rival UBS AG in 2009.
In a meeting with Credit Suisse's lawyers in March 2013, U.S. Justice Department officials, frustrated by what they viewed as poor co-operation from the bank, said an indictment was possible if they did not see an improvement, according to a person briefed on the situation.
Exact details of what prosecutors were seeking could not be learned, but Credit Suisse said Swiss law prevented it from handing over names of clients to U.S. authorities, and Swiss lawmakers did not want to do anything to help the bank to do so.
By that time, Credit Suisse, officials in the United States, and the Swiss government had been negotiating for almost two and a half years with little success.
While U.S. prosecutors insisted on getting at names of alleged U.S. tax cheats, the Swiss government steadfastly maintained it would not invoke emergency law in order to allow Credit Suisse to deliver data on any of its clients.
In Switzerland, breaking banking secrecy laws can mean fines and up to three years on jail, though the Swiss government has said it will loosen those laws and adopt data sharing agreements with its neighbors if it becomes a global standard.
Swiss authorities have aggressively pursued breaches of secrecy in the past, closing off that avenue to Credit Suisse. According to several sources, the bank - much like its Zurich rival UBS - refused to entertain the idea of its management risking jail by meeting U.S. demands for client data.
UBS paid $780 million in fines and got a deferred prosecution agreement to settle similar charges, but also turned over names of 4,450 clients. That data handover was only backed by a narrow margin of Swiss lawmakers in 2010. Since then, political opposition in Switzerland against banks has hardened, with lawmakers unwilling to help Credit Suisse with a UBS-style deal.
The Swiss government had little room to maneuver either: it has been successfully challenged in court in 2010 over its emergency decision to order UBS to