For Credit Suisse, the tax tussle with the U.S. is but a memory from hell. But the events of yesteryear had to be retold before a labor court judge in Geneva – and the verdict won’t have pleased the bank's bosses in Zurich. The bank will appeal.
In a U.S. Senate hearing in 2014, former Credit Suisse CEO Brady Dougan admitted that the bank had broken U.S. law with advice given to clients. But he blamed a small group of client advisers who had overstepped the line and the bank had actually detected the problem at an early stage – all according to Dougan.
A labor court in Geneva has now come to a pretty different conclusion, according to «Neue Zuercher Zeitung». A former relationship adviser of Credit Suisse had sued the bank. Following the study of countless documents and after hearing 38 witnesses, the judges decided that the bank's management had literally incited the relationship managers to go beyond the rules of the bank.
The management had known about the activities of the U.S. team of relationship managers and had accepted the way it performed their tasks. The team members had traveled several times a year to meet clients in the U.S. even after the bank had signed the Qualified Intermediary agreement. Also, the top management of the bank had to sign off on the business trips of relationship managers and had knowledge of the protocols of the meetings.
A Slap in the Face
The former Credit Suisse banker had sued the bank in 2015 for loss of pay, bonus and pension contributions of a total 4 million Swiss francs ($3.94 million). Credit Suisse had fired the banker on May 19, 2014 as part of the tax deal reached with U.S. authorities.
The ruling of the Geneva labor court is in stark contrast to what the bank had claimed at the time. Urs Rohner, the chairman of the bank, had been general counsel of Credit Suisse during the years when the U.S. laws were violated.
The ex-banker of Credit Suisse has been vindicated in Geneva and the bank will be forced to pay him 4 million francs in compensation.
Credit Suisse Comment on Verdict
Credit Suisse reacted to the verdict in Geneva and sent the following statement: «We have taken notice of the judgment which we believe ignores the facts at hand and misses the merits of the case. Credit Suisse will appeal such judgment.»
