Credit Suisse’s chief operating officer has resigned after a probe found he initiated surveillance of an executive who left to join rival UBS.
Private detectives were hired to track the Swiss bank’s former head of wealth management, Iqbal Khan in September, in a scandal that has rocked the normally staid world of Swiss banking.
Mr Khan left the bank in July.
There was no indication chief executive Tidjane Thiam, who had fallen out with Mr Khan, knew about the surveillance.
Mr Khan had initially been praised and promoted by Mr Thiam.
But there were reports that a personal animosity had developed, which intensified after Mr Khan bought and spent two years redeveloping a property near Lake Zurich which neighboured a property belonging to his boss.
Media reports suggest there was an altercation in January between Mr Khan and Mr Thiam’s girlfriend at a cocktail party held by the chief executive at his home, over trees planted on Mr Thiam’s property.
Shortly after that Mr Khan announced his departure from Credit Suisse.
The scandal surfaced in September when it transpired that the bank had hired corporate intelligence firm Investigo to track Mr Khan, due to fears he might poach clients when he started work at UBS this week.
Mr Khan, after noticing he was being tailed, confronted the person observing him. His version of the altercation that ensued differs markedly from the report from Investigo and the incident is under criminal investigation.
‘Severe reputational damage’
Questions were raised over who within Credit Suisse instigated the operation to have Mr Khan followed, and who was aware of it.
As a result Credit Suisse hired law firm Homburger to examine the chain of responsibility and whether Mr Iqbal had violated the terms of his contract.
The personal relationship between Mr Thiam and Mr Khan was not part of the investigation, Credit Suisse said.
“The Homburger investigation did not identify any indication that the CEO had approved the observation of Iqbal Khan nor that he was aware of it prior to September 18, 2019, after the observation had been aborted,” the bank said.
Credit Suisse said that the decision to observe Mr Khan was “wrong and disproportionate and has resulted in severe reputational damage to the bank”.
But it said the report had found it was chief operating officer, Mr Bouée alone who had decided to initiate the observation of Mr Khan.
The Homburger report said neither its own investigations nor those of intelligence firm Investigo found evidence that Mr Iqbal had attempted to poach employees or customers away from Credit Suisse.