Switzerland's financial regulator is wading into a lurid spy scandal at Credit Suisse. The move underscores that the Swiss bank is losing control over the affair.
Bern-based Finma is appointing an independent investigator to look at a Credit Suisse spy scandal which surfaced in September, it said in a statement on Friday. The scandal raises questions over the Swiss bank's corporate governance, the regulator said.
«This investigator will clarify the relevant corporate governance questions, particularly in relation to the observation activities, the handling of information in this context and the use of electronic communications,» Finma said. It didn't elaborate who it has mandated but said typically investigations of this sort last several months.
Under Pressure
The move is a setback for Credit Suisse Chairman Urs Rohner and CEO Tidjane Thiam. Both have each come under heavy pressure since it emerged that the bank spied on its former wealth star, Iqbal Khan, who defected to UBS in October.
Rohner offered a full-throated apology for an apparent confrontation between a detective and Khan in a Zurich side street adjacent near to Credit Suisse's Paradeplatz headquarters. Operating chief and long-time Thiam associate Pierre-Olivier Bouée, who ordered the observation, left the bank.
Casts Doubt on Pledge
More recently, two separate reports, one in Switzerland and the other in the U.S. cast doubt on Credit Suisse's claim in September that Khan's shadowing was an isolated incident. In a separate statement, Credit Suisse said it will on Monday release the results of an investigation into the second surveillance operation on the former top executive (and long-standing Thiam associate) Peter Goerke.
Observation is legal in Switzerland, and sometimes used for competitive intelligence or protecting business interests. However, the Credit Suisse episode is jarring against the carefully cultivated image of discretion and reserve in wealth management.
Legal, Yet Distasteful
The public and staff pushback also illustrate that even if surveillance is common, it is viewed as a hugely distasteful way to conduct business. Chairman Rohner alluded to this in October, saying it was «almost unbearable to admit that we spied on our employee.»
On Friday, the bank said it will continue to fully cooperate with Finma. The regulator's involvement illustrates that Credit Suisse can no longer contain the scandal, which has gripped the Swiss wealth management industry but left a big investor unfussed.
