Credit Suisse Group AG (CSGN.S) has told customers in recent months it will no longer execute transactions in shares of cannabis companies with U.S. operations or hold them on behalf of clients, a cannabis company executive and other industry sources told Reuters on Wednesday.
The Swiss lender was among a handful of banks that had been willing to buy and sell marijuana-related stocks for clients in the United States and hold those shares as a custodian. Credit Suisse declined to comment.
Cannabis remains illegal under U.S. federal law, even though many states have legalized its use. This represents a legal risk for investment banks working for companies that produce or trade the drug.
Credit Suisse's compliance and risk management procedures have come under scrutiny from investors and analysts after it lost at least $4.7 billion from the collapse of Archegos, an investment firm dedicated to managing the fortune of hedge fund veteran Bill Hwang, as well as the suspension of funds linked to insolvent supply chain finance company Greensill.
Read more at reuters.com