A bombshell twist in the saga of Credit Suisse’s $17bn additional tier 1 writedown hit the headlines this week, when mainFT sort-of revealed the following:
Credit Suisse directly disputed the Swiss financial regulator’s basis for writing down $17bn of its additional tier 1 bonds, in a private letter aimed at sparing staff bonuses that were tied to the debt.
We say “sort-of” because, while the FT was the first major news organisation to write about the revelations contained in a second decree Switzerland’s Finma issued ordering Credit Suisse to zero its AT1 bonds, another lesser-known media outfit actually got the scoop:
The second decree was published in full online last week by Antigua News, a local news outlet. The Financial Times separately obtained a copy of the decree and verified its authenticity with several people with direct knowledge of the situation.
If you are not familiar with Antigua News, you are not alone.
The barely two-year-old website primarily traffics in the comings and goings on the Caribbean island nation of Antigua and Barbuda, with recent stories chronicling a robbery at local takeaway joint Roti King and the suspension of a high-profile criminal trial due to a courtroom “mould infestation”.
Even by the standards of a local news start-up, Antigua News’s Twitter presence was minimal, with a paltry 15 followers ahead of the FT’s story on Monday:
Antigua? We hardly know ’er
Needless to say, obscure Caribbean websites do not usually break big European banking stories.
For those not following the intricacies of the fallout from Credit Suisse’s shotgun marriage to UBS, earlier this month a group of AT1 bondholders that have banded together to sue Finma achieved an early victory in what is expected to be a protracted courtroom battle.
The aggrieved investors forced the Swiss financial regulator to hand over two hitherto secret documents: Finma’s decree ordering Credit Suisse to wipe out the AT1 bonds and a second decree relating to staff bonuses that were tied to the debt.
While aspects of the first decree soon leaked out into the Swiss press, the world’s media had missed that Finma had even issued a second decree before Antigua News arrived on the scene.
The contents of this second decree were even more explosive. The document reveals Credit Suisse had challenged Finma’s interpretation of the AT1 contracts and argued that the conditions allowing for a writedown had not been met. It represents a coup for investors battling to prove that Finma acted improperly.
On May 15th, hours after muckraking Swiss financial blog Inside Paradeplatz published an article containing a couple of photographed extracts from copies of the first decree, Antigua News quietly published digital versions of both the first and second decrees in their entirety. It even savvily watermarked them:
FT Alphaville set out to find out how this little-known Antiguan website got hold of the Swiss smoking gun and scooped the world’s financial press.
The answer led us to a pizza-loving lawyer and ambassador, whose notable past clients include Vladimir Putin’s former son-in-law.
Caribbean websurfing destination
Antigua News had published two articles on Credit Suisse’s travails in March, as the 167-year-old lender fell into the arms of longtime rival UBS. These earlier stories at least carried a byline (“Tata”), but lacked the strength of sourcing of the later marmalade-dropper dispatch.
While the owner of the antigua.news domain had used a privacy protection service, online records also suggested a Swiss connection:
The website itself is . . . not user friendly. Vast sections of screen space are covered by large invisible link frames, which make right-clicking impossible.
Some gentle fiddling allowed Alphaville to circumvent these barriers and access the raw images of the Finma decrees. File names such as “FITMA 1.pdf.jpg” suggested not only a slight sloppiness arising from an eagerness to get content online (we can relate), but also that the poster had a digital version of the document itself.
As much as we love a spot of online archaeology, at this point we decided it would be more efficient to hit the phones.
Unexpected Item in bagholding area
A Swiss lawyer, Antigua and Barbuda’s ambassador to Spain, and a fledgling media mogul walks into a bar.
His name is Dario Item.
“This is my article, I wrote the article on Antigua News,” Item told FTAV. “I am also [the owner] of Antigua News. And I am also a Swiss lawyer . . . I am defending some investors and for this reason, I have this information.”
We happened upon the rather forthcoming man behind the scoop while cold calling phone numbers connected to Antigua News (it was more successful than our earlier exchange with a slightly bemused advertising sales representative who had not heard of Credit Suisse, but dutifully promised to pass on our inquiry all the same).
Item, 50, is the Antiguan ambassador not only to Spain, but also the small European principalities of Monaco and Liechtenstein, and the United Nations World Tourism Organisation. His embassy owns and operates Antigua News. He is also a lawyer based in Lugano, Switzerland, representing undisclosed investors holding Credit Suisse AT1s, which were wiped out during the sale to UBS.
“You understand it’s a big scandal in Switzerland,” he told us. “We are all very upset because we sincerely believe that there [was] no legal basis at all in order to write down the AT1s.”
(Item declined to name the investors he is representing, citing “attorney-client privilege”.)
In possession of both the decrees and Antigua News (which he called an “official channel of the embassy of Antigua and Barbuda in Madrid”), Item decided to cut out the middleman: he effectively supplied the documents to himself, posting them alongside an explanation of their significance on the news website he controls via his diplomatic post.
His account of the big scoop was confirmed by the unnamed journalist who oversees Antigua News’s WhatsApp group, who also suggested that their hands-on proprietor has a similarly direct editorial philosophy as that professed by the London Evening Standard’s Lord Lebedev:
(The anonymous journalist had also seen our snarky tweet about Antigua News’s paltry number of Twitter followers, cheerfully flagging that their Facebook account is far more popular as “Islanders hardly use Twitter”. Fair point!)
Item explained that he was the man for the job when it came to writing about the complexities of the legal case surrounding Credit Suisse’s AT1s because it is “a very sensitive matter.”
“I have the competencies to write an article like that,” he said. “And I decided to do it because I believe it’s very important.”
It’s certainly a novel approach to journalism. The FT’s other sources close to the case have been more circumspect about sharing documents from the ongoing litigation. Item has no such qualms.
“These documents are absolutely not secret,” he told us, adding that the Swiss court that compelled Finma to disclose the decrees to bondholders did not place “any restrictions” on publishing them. “This is very, very important. People have to know. With all details.”
A one-minute-31-second clip, titled “Dario Item”, is one of three videos on the YouTube channel “Dario Item”. The other two are called “Dario Item” and “Dario Item”.
It shows Felipe VI of Spain stood in the Antechamber of Charles III, part of the royal palace in Madrid. Item enters from a far door, and formally presents his credentials to Felipe.
The scene is also documented on Item’s Instagram, where he primarily posts beach pictures and has north of 800,000 followers.
These are but a couple of examples of Item’s sprawling web presence, which, alongside Antigua News, also includes a personal website, another personal website, another personal website, a personal press website, another personal press website, and a Medium profile. Here he is promoting Antigua and Barbuda’s blockchain regulation. And here he is mourning the death of Queen Elizabeth II in the Scottish local press. Here he is writing about money laundering in Switzerland.
Item also repeatedly comes up in relation to Antigua’s “Nomad Digital Residence” programme, which allows foreigners to live and work remotely from Antigua and Barbuda for up to two years.
Last summer, Item announced the scheme had been “cautiously reopen[ed]” for “non-sanctioned Russians and Belarusians”, subject to “strict criteria”. We also noticed that Russian is one of the handful of language options on many of Item’s myriad websites.
The ambassador confirmed to us that his Russian websites were his way of promoting Antigua’s citizenship by investment programme in the country and the surrounding region. He added that “unfortunately” the window for Russian and Belarusian applicants closed again just one month after his big announcement.
There are other Russia-related Item items around.
In 2020, the Organized Crime and Corruption Reporting Project, a consortium of investigative journalists, named Item in connection with a network of offshore companies owned by Kirill Shamalov, Russian president Vladimir Putin’s former son-in-law. It labelled Item the “main custodian of Shamalov’s offshore secrets”.
Item branded this claim “really ridiculous”, noting he was one of several lawyers that worked for Shamalov.
“And every lawyer is custodian of secrets,” he told us. “By the way, the case was related to a Swiss bank and considering Switzerland as [an] offshore country [is] simply ridiculous. I was just a lawyer, but it was five years ago.”
It is not the only Putin-adjacent story we found.
This 2014 Reuters report included documents from a company called Medea Investment, which supplied materials to the notorious Black Sea-adjacent property dubbed “Putin’s Palace”. The document names “Dr. Dario Item” of Lugano, Switzerland, as a representative for Medea. Reuters reported the company’s shareholder was Lanfranco Cirillo, an Italian architect best known for designing the mansion allegedly constructed for the Russian President’s enjoyment.
Item said his work for Cirillo was “in the past” and claimed client-attorney privilege again prevented him from discussing details.
Then there was his run in with the financial authorities in Labuan, a federal territory of Malaysia, which in 2019 struck off Item as a director of two financial services firms. As a consequence of the regulatory sanction, Antigua also revoked one of his companies’ banking licenses. The Malaysian regulator later overturned the personal sanction against Item, following a judicial review.
“I was — you can believe me or not — I was the victim of a fraudster,” said Item. “I won in court and there is nothing left in that country [Malaysia]. Every measure against me has been withdrawn and this is public.”
We thought this story was weird and wonderful enough. Then we found the pizza forum.
Among his other interests, Item owns a messaging board for pizza enthusiasts, La Verace, where he posts as an admin under the name Napoli72. One of the other pizza aficionados even affectionately refers to him as “Zio Dario” (“Uncle Dario”).
Zio Dario has posted 4,635 times. Here’s his signature (translated by Google):
“It’s my passion. It’s my passion. Absolutely. It’s absolutely my passion. I love cooking. I love cooking,” Item told FTAV.
He added: “And I have a pizza oven in all my houses, also here in Antigua. I am a bit crazy to be honest.”
A commitment to making high-quality homemade pizzas didn’t seem that out there for a man of Item’s means. But he then began detailing the delicate logistics involved.
“You can’t imagine how difficult it was to bring an oven from Naples,” Item continued with a chuckle, explaining how he had to use a crane to install the traditional forno. “If you saw what I did here, you definitely could conclude that I am crazy.”
While FTAV wouldn’t go that far, it is certainly illustrative of the same can-do approach that led the international lawyer and diplomat to take matters into his own hands when the world’s financial press missed the real story on Credit Suisse.
Read the full article here