Credit Suisse and its ex-top private banker, Iqbal Khan, reportedly reached a detente in a damaging spy scandal.

The feud between Credit Suisse CEO Tidjane Thiam and his former wealth chief Iqbal Khan came into sharper focus with a report that it is being more closely probed by a Swiss prosecutor. The two men reportedly had a loud confrontation last January, which left Khan feeling Thiam's behavior towards him warranted police notification (though none were lodged).

It remains unclear what the alleged «massive threats against life and limb» against Khan were. They may relate to a secrecy deal brokered by the bank's chairman,Urs Rohner, Swiss daily «Neue Zuercher Zeitung» (behind paywall, in German) speculated on Tuesday. NZZ, which normally steers clear of speculation, broke a second case of spying at the bank last month.

Secrecy Quid Quo

NZZ, whose traditionally close relations with Credit Suisse have reportedly cooled, reported that Khan may be bound by a non-disclosure agreement with the bank. The 43-year-old Swiss banker is now busy restructuring UBS flagship private bank, which he co-runs. UBS is keen to distance itself from the scandal, as finews.com reported.

The Swiss newspaper speculates that quid pro quo for the secrecy agreement is that Khan was allowed to defect to UBS within three months – without precedent in recent history. While bankers move between the wealth giants almost daily, Khan wasn't held to his notice or a traditional cooling-off period.

Absurd Skirmish

In the intervening months, Credit Suisse set a private detective on Khan, in a bid to ensure that the star banker didn't poach clients or key staff before officially joining UBS. The scandal surfaced when the detective was confronted by Khan in an absurd skirmish near Credit Suisse's tony Paradeplatz headquarters, witnessed by Khan's wife well as bystanders.

Despite any non-disclosure pacts which may exist, more gory details of the affair can be expected to hit the headlines. A Swiss prosecutor is investigating two criminal complaints, and Switzerland's financial regulator Finma also began asking for answers after at least one more spy case emerged at Credit Suisse.