Credit score Suisse clears its CEO in spying scandal that rocked Swiss banking

ZURICH (Reuters) – Credit score Suisse (CSGN.S) cleared its CEO on Tuesday of snooping on a star wealth supervisor in an episode that noticed suicide, scandal and espionage invade the secretive world of Swiss non-public banking.

The brand of Swiss financial institution Credit score Suisse is seen at its headquarters on the Paradeplatz sq. in Zurich, Switzerland October 1, 2019. REUTERS/Arnd Wiegmann

The spying on ex-wealth administration chief Iqbal Khan after he left the financial institution for arch-rival UBS (UBSG.S), and the suicide of a personal investigator concerned in organizing the surveillance, has badly tarnished the status of the Swiss financial institution and its prime managers.

“I’ve not come throughout anybody who will not be shocked by what is occurring,” an individual accustomed to Credit score Suisse’s administration mentioned. “The shock is huge. What you’ve seen within the media over the past 10 days has had an enormous influence on the employees right here.”

Khan, who left Switzerland’s second-biggest financial institution in July and commenced work on Tuesday at UBS, was beneath surveillance by non-public detectives employed by Credit score Suisse from Sept. four to Sept. 17, when he noticed them.

Information of a rift between Credit score Suisse CEO Tidjane Thiam and Khan previous to the latter’s departure has prompted hypothesis over causes for the surveillance, which has roiled Switzerland’s monetary heart, triggered a felony investigation and damage the picture of everybody concerned.

A non-public investigator who organized the surveillance of a senior former Credit score Suisse supervisor dedicated suicide final week,

a lawyer for the safety agency on the heart of the spying case mentioned.

The financial institution’s chairman, Urs Rohner, mentioned on Tuesday {that a} private dispute between Khan and Thiam, which had made it inconceivable for the 2 to work collectively, had prompted Khan’s departure however had been unrelated to the hiring of detectives.

The financial institution’s inner probe carried out by legislation agency Homburger discovered Chief Working Officer Pierre-Olivier Bouee alone initiated statement of the previous wealth administration govt to see if he was attempting to poach former colleagues to hitch him at UBS.

The investigation discovered no proof that Khan had tried to poach workers or shoppers from Credit score Suisse.

Bouee – whose skilled life has carefully tracked Thiam’s, having labored collectively at McKinsey, Aviva (AV.L) and Prudential (PRU.L) earlier than shifting in 2015 to Credit score Suisse – stepped down from his position to take duty for the matter, the financial institution mentioned on Tuesday.

Bouee and Thiam had been shut associates for the reason that McKinsey days, with Bouee described as extra abrasive than Thiam by one supply who beforehand labored with them each in Britain.

“He was unhealthy cop to Tidjane’s good cop,” the individual mentioned, including that the 2 normally spoke collectively in French.

A second banker who labored with each added that, whereas Thiam and Bouee had an excellent working relationship, Thiam didn’t keep an interior circle of nearer contacts amongst his group.

Rohner advised a information convention on Tuesday that Thiam nonetheless loved the complete confidence of the board. “We’ve got completely zero proof that he was knowledgeable about it,” he mentioned, whereas apologizing to Khan and his household for the incident.

The board referred to as the spying operation “flawed and disproportionate” in an announcement, including it had brought on extreme reputational injury for the financial institution.

The felony investigation of the spying operation continues.

Rohner and John Tiner, head of the board’s audit committee, batted again questions in regards to the credibility of the probe’s findings, saying the incident was uncommon and insisting Thiam was on prime of what was taking place on the group.

Solely two workers – Bouee and the safety boss beneath him, who additionally resigned – knew of the surveillance, the probe discovered.

Nonetheless, deleted messages despatched on safe platform Threema utilized by Bouee and safety personnel had restricted the scope of the findings, Homburger managing companion Flavio Romerio mentioned.

Messages between Bouee and Thiam from Aug. 22 onward, which have been despatched through firm electronic mail and messaging platform WhatsApp, had been reviewed and located to not be related, he added.

Thiam didn’t attend the information convention.

Two huge buyers mentioned final week that they wished Thiam, architect of a sweeping three-year revamp on the financial institution, to remain except it was proven he broke the legislation, however shareholders largely remained silent on Tuesday as Credit score Suisse’s shares reversed early positive aspects to shut down 2.9%.


Khan was referred to as a easy and bold supervisor placing life into Thiam’s technique of reshaping the financial institution right into a wealth administration juggernaut to rival larger peer UBS.

Beneath his watch, the Worldwide Wealth Administration enterprise he led greater than doubled earnings and sharply boosted the consumer property it handles.

The abrupt departure of Pakistan-born Khan, who moved to Switzerland when he was 12, uncovered his falling out with Thiam, the 57-year-old Franco-Ivorian govt who revamped a stagnant Credit score Suisse by chopping hundreds of jobs, scaling again funding banking and bolstering its steadiness sheet.

Rohner mentioned a heated change that occurred between the 2 in January prompted the chairman to become involved.

“The decisive query for me was whether or not the variations between the 2 gents… would influence their cooperation going ahead,” Rohner mentioned, including their efficiency was unaffected at first. “However it turned obvious {that a} long-term, trusting and mutual cooperation was not doable and that Mr. Khan wished to depart the financial institution.”

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Khan’s swap to co-head of wealth administration at market chief UBS sealed the divorce.

Khan, 43, went to the police after the Sept. 17 confrontation with not less than one detective who was shadowing him and his spouse as they drove by Zurich. Conflicting variations have emerged of how the incident unfolded.

A spokesman declined touch upon behalf of Khan, stating that “Mr. Khan being now with UBS won’t touch upon right this moment’s announcement of Credit score Suisse”. UBS additionally declined to remark.

Reporting by Brenna Hughes Negaiwhi, Michael Shields and Oliver Hirt; Extra reporting by Carolyn Cohn, Joshua Franklin and Silke Koltrowitz; Enhancing by John O’Donnell/Edwina Gibbs/Susan Fenton

Author: Maxwell C.

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