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Credit Suisse exec quits over spying scandal

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK
The logo of Swiss banking giant Credit Suisse in Zurich. Photo: Fabrice Coffrini/AFP/Getty

The chief operating officer of Credit Suisse (CS) has resigned over a spying scandal that rocked the buttoned up world of Swiss banking and threatened to topple the bank’s CEO.

Credit Suisse said on Tuesday that Pierre-Olivier Bouée had resigned as COO and stepped down from the board of directors and executive board. It follows an independent investigation into the tailing of a high-flying Credit Suisse banker who was poached by rival UBS.

Iqbal Khan, formerly head of Credit Suisse’s wealth management division, was tailed by private investigators working on behalf of the bank last month. Khan spotted his observers and eventually publicly confronted one of them in Zurich, leading to press accounts of the event. The story quickly spiralled and the board of Credit Suisse last week launched an independent inquiry to find out who was responsible.

Credit Suisse said on Tuesday that the investigation found Bouée ordered the observation of Khan without consulting any other senior executives or board members. Bouée authorised the tailing because he was concerned Khan may try to poach members of his former team to join him at UBS.

The board of Credit Suisse said the decision was “wrong and disproportionate and has resulted in severe reputational damage to the bank.” Credit Suisse’s Head of Global Security Services has also resigned over the scandal.

The investigation’s findings mean Credit Suisse CEO Tidjane Thiam looks set to keep his job. The Financial Times reported last week that Thiam had had a personal and professional falling out with Khan before he left the bank, leading to speculation that Khan’s tailing could have been ordered by the CEO.

Law firm Homburger’s investigation found that Thiam was not consulted on the tailing and wasn’t even aware of the operation until two weeks ago.

“The investigation did not reveal any evidence that the observation was related to the personal differences between Iqbal Khan and the CEO that have been reported in the press,” Homburger said in a summary of its investigation released by the bank.

The independent probe found that Khan was tailed for seven days between September 4 and 17, after which the banker spotted his tail and confronted him. Homburger said there was no evidence that Khan had tried to poach any Credit Suisse staff. It also found no evidence that Credit Suisse had tailed any other former employees who left the bank. It cautioned that its investigation did not have access to police records related to the incident and had only partial access to private communications linked to the case. Some private messages have also been deleted, the law firm said.

Credit Suisse has appointed James Walker as its new chief operating officer following Bouée’s departure. Walker is currently chief financial officer of the bank’s US arm.