Swiss banking giant Credit Suisse pleaded guilty to a criminal charge that it helped wealthy Americans dodge income taxes, a milestone following years of criticism that regulators have failed to crack down on huge financial institutions.
The Justice Department filed a criminal charge against the company in federal court Monday in a development that signals a plea arrangement has been reached. The bank pleaded guilty to one count of conspiring to aid tax evasion and pay a fine of more than $2.6 billion.
It marked the first time in more than a decade that a large institution has acknowledged criminal misbehavior.
For years, authorities have been reluctant to bring criminal charges against mammoth financial institutions. They have worried that even the existence of criminal allegations could topple a major bank and lead to a cascading effect throughout Wall Street and the economy.
That fear is behind the wide-ranging debate known as "too big to fail." It's also sparked concern that Wall Street has a sort of impunity in which firms can engage in questionable financial behavior because they believe the government would, in the end, bail them out to prevent wider economic havoc.
Critics say the unwillingness to bring the hammer down on major banks and their top executives effectively fans wrongdoing on Wall Street.
However, the criminal charge against Credit Suisse will apparently only go so far. Its chief executive, Brady Dougan, an American, is not expected to lose his job, according to reports.
Credit Suisse executives have previously admitted that the bank helped Americans shield as much as $12 billion from taxes, and acknowledged the practice was a "mistake" and "unacceptable."
However, they argued that Swiss bank-secrecy laws prohibited the institution from revealing the names of tax-dodging U.S. citizens to American regulators.