Credit Suisse on Monday admitted it was behind instructions to carry out surveillance on a second executive, after dismissing a previous similar incident as an "isolated event". Switzerland's second-largest bank pinned the blame on former chief operating officer Pierre-Olivier Bouee, who it said hired detectives to track former HR head Peter Goerke in February.
The bank earlier blamed Bouee for a similar incident involving former wealth manager Iqbal Khan. "The observation of Peter Goerke, which has now been confirmed, is inexcusable," Credit Suisse Chairman Urs Rohner said in a statement, adding there was "grave concern" that those responsible for ordering the surveillance had not mentioned it during an earlier probe regarding Khan.
In spotlight since September
"We are aware that the observation of Iqbal Khan and Peter Goerke have damaged the reputation of our bank," Rohner said. Credit Suisse has been in the spotlight since September when Khan filed a criminal complaint in Zurich after being followed by private detectives.
The bank launched an investigation and found it had bankrolled the surveillance. Rohner at the time called the conduct "wrong" and CEO Tidjane Thiam told employees the debacle was "strictly an isolated event".
Thiam said he had no knowledge of the order given by long-term associate Bouee, who followed him over to Credit Suisse from Prudential. The new investigation regarding Goerke again found Thiam and other executives and board members had not been aware.
An investigation by law firm Homburger into spying on Khan — who now works for rival UBS — had found Bouee and a security boss under him were alone responsible for the order and found no evidence of other incidents. Both resigned and Credit Suisse said on Monday that Bouee's employment had now been terminated for cause, indicating his bonus and other potential compensation would likely be forfeited. Attempts to reach Bouee and Goerke for comment were not immediately successful. Switzerland's finance watchdog is looking into the bank's surveillance activities and its corporate governance. A criminal probe into the Khan affair continues as well.
Credit Suisse and Homburger will continue their latest probe, a spokesman said, having determined that Bouee and others involved had not told the truth when asked about any other surveillance orders in September and had taken care not to leave any identifiable traces in the bank's systems.
"Credit Suisse will look into any relevant indications if we receive information about alleged (surveillance)," he said. Another former Credit Suisse employee, Colleen Graham, alleges she was followed in the United States after she disputed accounting arrangements for a joint venture she was overseeing. The bank says an investigation found her claims to be baseless. Credit Suisse stock fell 1.2% by 1000 GMT while the European bank sector index was off 0.8%.