Credit Suisse and a prominent Latin American broker defrauded a young Mexican client of hundreds of millions of dollars by trading excessively in his name to run up fees and used his money to buy stakes in companies for themselves, according to a lawsuit.
The client, Moises Cosio, a filmmaker and the scion of a Mexican banking and real estate fortune, fell victim to “predatory schemes” carried out by broker Inigo Domenech and an associate, Ramon C. Perez, who managed Cosio’s family office, according to a suit in Florida state court that was dated Feb. 27 and reviewed by Bloomberg News.
“This case is about the systematic exploitation of a young man by those who claimed to be his most trusted advisers,” Cosio says in the lawsuit.
Domenech didn’t respond to requests for comment. Perez didn’t immediately respond to an email sent to him through LinkedIn, which lists him as managing director at Accendo Capital Group, Cosio’s onetime family office. Their attorneys couldn’t be immediately identified.
Cosio inherited his fortune after his father died in 1998, when he was 14. Among his personal holdings is the landmark 59-story 500 Fifth Avenue building in Manhattan, according to a 2014 financing agreement.
At the time Cosio became a client, Perez worked at Citigroup, and he steered Cosio to Domenech, who was then a young Citigroup banker in Mexico, the suit says. Cosio developed a close personal and financial relationship with Domenech, who arranged exotic cars and entertainment for his client during his visits to Miami, according to the filing.
Domenech then moved to Credit Suisse, where he spent six years before switching to Morgan Stanley in 2016, his brokerage industry registration indicates. He took the Cosio account with him along the way.
A Citigroup representative declined to comment.
Credit Suisse has denied wrongdoing in a related arbitration case. On Monday, Karina Byrne, a bank spokeswoman, said: “Credit Suisse believes the allegations in this lawsuit are without merit and looks forward to vigorously defending against them.”
Morgan Stanley paid Domenech’s 12-person team close to $75 million to move to the firm, the website AdvisorHub reported, citing an unnamed person. Credit Suisse was closing its U.S. private banking operations at the time. Domenech is still employed by Morgan Stanley, records show.
Morgan Stanley declined to comment.
When Domenech was at Credit Suisse, he and Perez, who didn’t work for the bank, invested more than $150 million of Cosio’s assets in U.S. and Mexican companies, according to the complaint. The financiers misappropriated a “significant portion” of Cosio’s ownership stake in those companies by claiming to have put tens of millions of dollars of their own money into the ventures and providing their client with false valuations, the suit alleges.
Domenech also traded foreign currencies and securities excessively, according to the complaint. The banker “implemented a trading strategy at Credit Suisse designed to maximize the fees and commissions Mr. Cosio paid to the bank and, in turn, Domenech’s compensation,” the suit says.
Domenech’s “seeming devotion” to Cosio was “nothing more than a ploy to lull Mr. Cosio into trusting Domenech with control of his wealth,” the suit alleges.
In mid-2018, after Cosio began to suspect wrongdoing, Domenech and Perez destroyed some documents, forged others and deleted emails, according to the complaint. Cosio was still able to unearth evidence revealing their misdeeds, his lawyers say.
The lawsuit accuses Domenech and Perez of multiple acts of fraud and breach of fiduciary duty. It also says that Credit Suisse’s supervision of Cosio’s accounts was negligent.
Cosio’s arbitration claim is pending before FINRA. Credit Suisse has said that the investments were consistent with the account’s risk tolerance and investment objectives, according to a regulatory filing.
