Frankly, as we discussed earlier, Credit Suisse spends more than enough time in courtrooms and law firms. And has lost enough money on hifalutin mutual funds to his liking lately too. Given the more disturbing things it learns about the supply chain finance firm, whose products make up nearly all of the four funds that Credit Suisse sells to clients to hire very expensive lawyers, and whose money the supply chain finance firm is relying on In order to keep funding the supply chains, it will begin to limit its future legal liability.
Greensill’s troubles came to a head Monday after Credit Suisse announced it would prevent investors from buying or selling four private mutual funds based entirely on Greensill-created securities.
Credit Suisse has frozen the funds because some of its assets are “currently subject to significant uncertainty about their exact valuation,” the bank said in a statement to investors.
The German banking regulator BaFin began investigating the relationship between Mr Gupta’s companies and Greensill’s German banking unit last year, according to a person familiar with the investigation. The regulator was concerned that Greensill Bank was too involved in Mr. Gupta’s business.
Another factor behind Credit Suisse’s decision to suspend the funds: Greensill’s insurance policies, which provide protection in the event of asset default, have expired in recent days, according to some people familiar with the matter.
Of course, in the inevitable litigation, there will still be some rather nasty allegations.
It’s not Greensill’s first run-in with a fund suspension. In July 2018, Swiss asset manager GAM Holding AG frozen a $ 12 billion fund after an internal whistleblower raised concerns about the fund’s valuation of greensill assets. This included hundreds of millions of dollars of illiquid assets tied to Mr. Gupta’s business.
Oh yeah, and then there’s the uncomfortably avant-garde nature of Greensill’s relationship with another maestro of spectacular financial disasters, Masa Son.
SoftBank’s multi-faceted roles in Greensill have sparked controversy. In addition to investing in Greensill itself and receiving Greensill funds through its portfolio companies, SoftBank also invested $ 700 million in Greensill funds managed by Credit Suisse.
Of course it is not too toxic for Leon Black & Co.
Greensill is also in talks with private equity giant Apollo Global Management Inc. to sell its operations for around $ 100 million, according to people familiar with the talks. While a deal wouldn’t cover all of Greensill’s assets, the amount is a fraction of its peak valuation of $ 4 billion.
Greensill faces possible bankruptcy after Credit Suisse has suspended mutual funds [WSJ]