Prominent Swiss lawyer Isabelle Romy is leaving UBS’ board – early. finews.com surmises a link to the Iqbal Khan surveillance affair.
She would have four years left to a regular tenure on UBS' board – which limits directors to 12 years: However, Isabelle Romy, a well-known Swiss banking lawyer who has been a UBS director since 2012, won't stand for re-election in April. Neither the bank nor Romy detailed the reasons.
While it isn't unheard of for board directors to relinquish their seats before term limits kick in, the exit of the vocal and influential 55-year-old raises the specter of her indirect link to the surveillance operation by Credit Suisse on Iqbal Khan last year.
Half of Power Couple
Romy is one-half of a veritable power couple of Swiss wealth management: her partner, Flavio Romerio (pictured below between Credit Suisse director John Tiner, at left, and Chairman Urs Rohner), is also a lawyer and partner at Swiss white-collar law firm Homburger. Romerio led two outside investigations at Credit Suisse into two separate surveillance incidents.
(Image: Keystone)
Romerio helped the second-largest bank in Switzerland arrive at the conclusion that former operating chief Pierre-Olivier Bouée alone concocted and coordinated surveillance of Khan and of Peter Goerke, another top executive at the bank. Neither CEO Tidjane Thiam nor Chairman Urs Rohner knew of the covert plan, the bank said.
Spy Saga Far From End
The scandal is far from buried: Khan himself now faces a criminal complaint from the surveillance firm, the Swiss financial regulator is investigating at Credit Suisse, and a Zurich prosecutor is looking at a complaint lodged by Khan after the original scuffle in September.
The 43-year-old can do without the ugly distraction as he sets about restructuring UBS' private bank, together with co-head Tom Naratil. It remains highly delicate for both big Swiss wealth managers: By the time Khan landed at UBS, he was less well-known as an ex-Credit Suisse star than as one of the main protagonists in one of the most lurid scandals to hit Paradeplatz in years.
Specter of Conflict
UBS' unease with the issue is underscored by the bank's reported attempt to get Khan to stop seeking charges against the detective agency (he reportedly refused). For UBS, the investigation represents the potential for new information to come out – and smear the bank with collateral damage.
Romy's role at UBS combined with her husband's as Credit Suisse's chief investigator may have been another vulnerability: it could be interpreted as a potential conflict of interest. To top it off, she is part of the five-member board committee responsible for succession of top executives – Romy would have had a weighty word in Khan's hire.
Locking Down Vulnerable Spots
If Romy's exit is linked to the spy scandal, it wouldn't be the first time her career was influenced by the cozy ties of Swiss finance: in 2012, she left a partnership at Niederer Kraft Frey, or NKF, another white-collar law firm in Zurich, in order to become a director at UBS.
NKF wasn't willing to tolerate a top partner sitting on the board of Switzerland's largest bank. Romy moved to Froriep, which didn't quibble with her $625,000-a-year job at UBS and welcomed her as a full partner in 2012 (she also runs Froriep's business in Zurich).
UBS' risk in hiring Khan is two-fold: the banker has roughly 18 months to kickstart growth at the hidebound Swiss wealth manager. As he attempts to do so, the «spygate» saga will hum along – on a criminal and regulatory level. This allows for Romy's exit at UBS to be interpreted as the bank's desire for any potential ties to the affair to be stanched.
