Biotech Bet
Starting around 2012, he encouraged his clients to invest heavily in a U.S. biotechnology company called Raptor Pharmaceutical Corp. Ivanishvili and the banker’s other accounts soon became some of the largest single holders of the stock, according to public disclosures. The share price more than doubled in 2013.
But in addition to the purchases the clients had authorized, the banker said he bought millions more shares on credit that he’d taken out without their permission.
For a few years, the returns were good, generating millions in gains as he sold shares to lock in profits and pumped more money back into the stock.
He was nearly exposed in 2013, when he inadvertently sent a statement to one of the Russian clients that included the unauthorized loans and sub-accounts, totaling more than $50 million, according to the criminal complaint filed by the client. But the banker reassured him by telling him he’d gotten the wrong statement -- one for a different client with the same name, he told him. He quickly sent him a new, doctored version where the unauthorized activity was concealed.
The banker didn’t mention this episode in his comments to Credit Suisse in September.
Abrupt End
The end came abruptly on Sept. 14, 2015, when Raptor announced that trials of a new drug had failed. The stock plunged 37 percent.
Ivanishvili began getting margin calls, one for $128 million, for the leveraged positions the banker had bought without permission. One of the Russian clients was shocked to find he was facing an almost $8 million margin call for the other man’s account, according to his criminal complaint.
Four days later, the banker confessed to Credit Suisse. In the corporate security office in Geneva, he told investigators he could have prevented the margin calls with more unauthorized trading. But he was trying to enjoy the last day of his Italian vacation, he said. “I had had enough of this situation that had upset me so much.”