LONDON — An investigation into Credit Suisse‘s dealings with the collapsed U.S. hedge fund Archegos Capital revealed Thursday that the Swiss bank had failed “to effectively manage risk.”

The Archegos saga dominated the business headlines in March, with Credit Suisse being the worst hit out of several international banks involved.

Archegos built massive stakes in certain stocks through swaps, a type of derivative that investors trade over the counter or among themselves without having to disclose the holdings publicly and are highly leveraged. But a sell-off in these stocks meant the hedge fund was forced to inject more cash, amassing a forced liquidation of more than $20 billion.

A report published Thursday based on an independent external investigation, which was commissioned by the bank’s board of directors, found a failure to effectively manage risk in the prime services business at Credit Suisse’s investment banking unit “by both the first and second lines of defense as well as a lack of risk escalation.”

“It also found a failure to control limit excesses across both lines of defense as a result of an insufficient discharge of supervisory responsibilities in the Investment Bank and in Risk, as well as a lack of prioritization of risk mitigation and enhancement measures,” the announcement said.

One of the conclusions of the investigation said that “it seems likely that Archegos deceived Credit Suisse and obfuscated the true extent of its positions, which Archegos amassed in the midst of an unprecedented global pandemic.”

“That said, the business and Risk had ample information well before the events of the week of March 22, 2021 that should have prompted them to take steps to at least partially mitigate the significant risks Archegos posed to Credit Suisse,” it added.

The investigation also pointed out that nobody at the Swiss bank “appeared to fully appreciate the serious risks that Archegos’s portfolio posed” even though “these risks were not hidden. They were in plain sight from at least September 2020.”

Nonetheless, the investigation concluded that there had not been “fraudulent or illegal conduct” nor ill intent from its side and its employees.

In the wake of the sandal, the head of its investment bank, Brian Chin, and chief risk and compliance officer, Lara Warner, stepped down. The executive board decided to waive bonuses for the 2020 year, and also cut the proposed dividend.

Thomas Gottstein, CEO of Credit Suisse, told CNBC Thursday: “We are taking this event very seriously from the magnitude, but also how it happened and we want to take all the right lessons.”

He also told CNBC’s Geoff Cutmore that Credit Suisse wants to make sure that “an accident like Archegos will not happen again.”

78% profit drop

— CNBC’s Yun Li contributed to this report.

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