finews.com reveals new details about the alleged embezzlement of millions at private bank Pictet. The scandal is dragging the discreet, partner-led firm into an unwelcome spotlight.

The Pictet employee discovered allegedly siphoning millions from the exclusive private bank was head of its banking operations until recently, two people familiar with the matter told finews.com. The employee, whose identity is known to finews.com, has worked for Pictet in Geneva for nearly 20 years until the alleged scam surfaced, the people said.

«The public prosecutor confirms it has opened a procedure for fraud and breach of trust against a former employee of the bank», a spokeswoman for Geneva's prosecutor told finews.com on Friday. Pictet didn't comment.

Routine Staff Probe

The man suspected of the scam is believed by the bank and authorities to have skimmed a low single-digit million Swiss franc figure from accounts linked to the bank, both of the persons said. These funds ultimately belong to Pictet's seven partners – Nicolas Pictet, Renaud de Planta, Boris Collardi, Laurent Ramsey, Rémy Best, Bertrand Demole, and Marc Pictet. 

Staff who worked in the banker's immediate vicinity are being probed in the criminal investigation, they said. However, this is a matter of routine investigative procedure, and thus far there is no evidence that others are involved.

An initial review by the bank had shown that no client funds were taken; because the suspect isn't a private banker and worked in a so-called support function, it is highly unlikely he ever met any clients.

Dragged into Limelight

As news of the alleged fraud made its way around banking circles last week, reaction from the industry was surprisingly sanguine. «It happens at every bank,» said one insider while another added that «clients are usually protected» and the «bank usually has some level of cover» for such an eventuality. 

Nevertheless, the more details of this matter are brought to the attention of the public in droplets, the more this will affect Pictet. The Swiss private bank has for centuries endeavored to display the greatest possible discretion. 

The bank had already been dragged into the limelight by its newest partner, the media-friendly Collardi. Now, the fraud case represents another test of how Pictet deals with the public.

 Reporting by Claude Baumann, Shruti Advani, and Katharina Bart