Credit Suisse Group’s efforts to spy on top executives were broader than previously known and broke Swiss supervisory law, that country’s financial regulator said on 19 October.
The regulator, Finma, said that senior management knew about at least some of the seven surveillance campaigns it documented, pushing back on the bank’s claims that rogue employees were to blame.
Finma’s report wraps up a nearly two-year investigation into the spying scandal that rocked the Swiss bank after it first broke in 2019 and ultimately forced out its CEO, Tidjane Thiam. The agency said it had reprimanded two people in writing and opened enforcement proceedings against three others.
Credit Suisse had previously acknowledged that it spied on two executives in 2019. Two additional cases of surveillance were reported by The Wall Street Journal in which Credit Suisse hired private eyes to follow one employee in New York suspected of using confidential information and another employee in Asia who had threatened colleagues and was dismissed from the bank.
Credit Suisse said on 19 October that the five additional incidents cited by Finma were planned by a small group of former executives and was partly aimed at protecting employees’ physical safety. It said those involved organised their plans over channels that were outside the bank’s electronic monitoring system.
Finma said Credit Suisse executives took informal decisions to spy on employees and imposed a requirement that Credit Suisse’s chief executive and chairman approve future surveillance assignments.
Physical surveillance of employees is typically legal. However, the potential reputational risk means it is seen as a last resort if a company suspects an employee of serious ethical or legal breaches such as fraud, bribery or other behaviour that violates company rules.
The scandal began in September 2019 when Credit Suisse’s international wealth-management head, Iqbal Khan, noticed an investigator following him and his wife. Khan had resigned from Credit Suisse two months earlier and was preparing to start a new job with rival UBS Group. He went to the police and filed a criminal complaint against the investigators.
Credit Suisse initially said the spying on Khan was an isolated incident before eventually admitting that it had another executive tailed earlier in 2019. It blamed its chief operating officer and security chief, both of whom left the bank and haven’t commented.
In February 2020 Thiam, almost five years into the CEO job, was forced out after failing to contain the reputational damage of the scandal.
Write to Margot Patrick at [email protected]
This article was published by Dow Jones Newswires