The employee spinning scandal could affect Credit Suisse management. In its investigation, the Financial Market Supervisory Authority (Finma) would now also examine the role played by the governing bodies. The Finma is investigating following the surveillance of two former members of the management of the number two Swiss bank, including the star banker Iqbal Khan, by the Zurich establishment.
Two people familiar with the matter told Reuters that the board’s control of managing director Tidjane Thiam and other senior executives is also part of the investigation. Finma examines whether a lack of control within the bank led to the spying on managers.
Also read: Khan case: prosecutor interested in Tidjane Thiam’s role
Sanctions are possible
Depending on the results of the investigation, Finma may order the renewal of the management. Managers and members of the board of directors who have breached the regulatory requirement of “good management” may be asked to resign. The investigation is still in its infancy and no conclusions have yet been drawn, the two said.
A Finma spokesperson declined to comment on the night of Sunday to Monday. In December, the regulator appointed an independent auditor to shed light on the bank’s practices with regard to supervisory law. “Finma will carry out an independent audit which is not an application check. The final decree has not yet been published and an auditor has not been appointed. We understand that the points submitted to us are not part of the decree, “said the bank in a statement sent to AWP.
Read also: Iqbal Khan case: Finma appoints investigator
“Unfounded speculation according to Credit Suisse”
The bank added that it did not recognize “a number of points that have been submitted to us regarding this matter, in particular the suggestions that particular attention will be given to senior executives or directors of Credit Suisse Group”.
“Such speculation is unfounded and only serves to prejudge the outcome of what is an audit and not an execution measure,” the bank said. Credit Suisse has been under pressure since September when it was learned that the bank had its former star banker Iqbal Khan followed by private detectives. The bank was later forced to admit a second surveillance case, that of former human resources director Peter Goerke.
According to an investigation by the law firm Homburger on behalf of Credit Suisse, it was the former director of operations, Pierre-Olivier Bouée, who ordered the surveillance. The question was whether Iqbal Khan, who moved to UBS, might try to poach former colleagues. Neither Tidjane Thiam nor the board of directors were aware of it.
The banking group will release its annual results on February 13. Analysts are expected to examine performance in the last quarter of 2019, including possible liquidity spikes that could have been caused by this spinning affair. On the Swiss Stock Exchange, the Credit Suisse title fell sharply by 2.6% to 12.86 francs, in a market struggling with fears about the Coronavirus. The SMI star index was down 1.8% at 12:10 p.m.
–
