Credit Suisse pays $475 million in fines over Mozambique scandal

It was easy — far too easy — for Andrew Pearse, a Credit Suisse banker, to negotiate $45 million of kickbacks for himself as part of a deeply corrupt series of loan and bond issues in Mozambique.

Driving the news: That's the verdict of a major international fraud investigation that culminated Tuesday in the Swiss bank paying some $475 million in fines.

Why it matters: Up until now, Credit Suisse has claimed it was a victim of rogue employees. But the fines, and the associated findings, make it clear that deep internal weaknesses allowed the crimes to proceed.

The big picture: The biggest victims in the scheme have been the citizens of Mozambique, a desperately poor country with massive debt-servicing costs whose first-ever international bond issue, co-run by Credit Suisse, was an integral part of the scandal.

• Credit Suisse has forgiven $200 million it's owed by Mozambique as part of this week's announcements. The bank retains the right, however, to try to claw back some of that money from other guilty participants.

Driving the news: Credit Suisse is paying $175 million to the Department of Justice, $100 million to the SEC, and $200 million to the U.K. Financial Conduct Authority. That's over and above any losses it takes on forgiving the Mozambican debt.

Flashback: The so-called tuna bonds were ostensibly issued to pay for Mozambique to build out a tuna fishing fleet. In fact, nearly all of the money ended up being stolen.

• When it became clear that the debtors would never repay the money, the Mozambique government allowed creditors to swap their paper for (arguably odious) sovereign Mozambique bonds.

The bottom line: Pearse and his co-conspirators have pleaded guilty but have not yet been sentenced; Mozambique is seeking their extradition.

• Expect many further shoes to drop in this case, which is likely to drag on for years.

Go deeper: How Credit Suisse failed at basic risk management