Credit Suisse had its former star banker shadowed by private detectives. The end justifies the means in crisis-hit Swiss wealth management – an alarming sign for the refined culture of noble restraint. 

The Swiss bank's statement reads as a mea culpa: Credit Suisse Chairman Urs Rohner would oversee an investigation into a broad-daylight confrontation between its outgoing top executive Iqbal Khan and a three-man security detail, as finews.com reported

Rohner and CEO Tidjane Thiam appeared to blame press sensationalism for ginning up the episode, without specifying what precisely it meant. Regardless of what the investigation brings to light, an altercation near Paradeplatz – the apex of Swiss private banking – represents a new low in the inglorious history of Switzerland's wealth industry.

Strong Suspicions

A Credit Suisse banker familiar with the matter said the bank hired private security because it harbored strong suspicions that Khan was violating a non-solicitation deal. Such pacts are common and seek to prevent leavers from orchestrating mass defections of either employees or clients.

It is unclear if the shadowing is illegal and whether Credit Suisse holds any responsibility; Zurich's prosecutor on Monday said it opened an investigation into alleged coercion and threats. The episode is egregious even if perfectly legal, and it speaks volumes on the paranoia currently circulating in Switzerland's battered wealth management industry.

Keystone Cops

It isn't clear who ordered Khan tailed, and by Keystone Cops amateurish enough to get caught by the Swiss banker against the backdrop of the ritzy Metropol restaurant (a popular finance haunt) and the Swiss central bank. What is inevitable is that Credit Suisse will have to provide a scapegoat for an increasingly bare-knuckles style. 

The level of paranoia and insecurity on display comes as UBS and Credit Suisse grapple with their wealth strategies, and with the role of investment banking. In short, both giants are getting hammered on costs while their growth and revenue prospects remain modest. 

One Hire Can Make or Break 

In this fierce environment, the fight for single bankers and executives becomes even more pronounced: Pictet, for example, expects dramatic growth of former Julius Baer boss Boris Collardi, who joined as a partner last June. UBS also has a huge hole it is looking to Khan to fill – both in terms of wealth business growth as well as to its leadership, as finews.com wrote.

Angst over who Collardi might poach circulated well before the star banker began at Pictet (in fact, he has lifted dozens of bankers and several teams). Julius Baer, in turn, grabbed from Credit Suisse and other private banks. In a market finished growing organically, wealth managers have little choice but to hunt in their rivals' backyard.