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Credit Suisse C.E.O. Tidjane Thiam Exits After Spying Scandal Credit Suisse C.E.O. Tidjane Thiam Exits After Spying Scandal
(32 minutes later)
They were two top executives at the same bank, living next door to each other. One day, they got into an argument over trees on one person’s property. A year later, it has ended badly.They were two top executives at the same bank, living next door to each other. One day, they got into an argument over trees on one person’s property. A year later, it has ended badly.
On Friday, Tidjane Thiam announced his resignation as chief executive from Credit Suisse, brought down over a spying scandal involving his next-door neighbor, the bank’s former head of wealth management, Iqbal Khan. On Friday, Tidjane Thiam announced his resignation as chief executive from Credit Suisse, brought down over a spying scandal involving his neighbor, the bank’s former head of wealth management, Iqbal Khan.
The Swiss bank hired Mr. Thiam in 2015 to help turn the company round. But his well-publicized falling out with Mr. Khan, who accused the company of spying on him after he left for a rival, UBS, has prompted resignations, as well as criminal and regulatory investigations, and tainted the reputation of Credit Suisse and the Swiss finance industry.The Swiss bank hired Mr. Thiam in 2015 to help turn the company round. But his well-publicized falling out with Mr. Khan, who accused the company of spying on him after he left for a rival, UBS, has prompted resignations, as well as criminal and regulatory investigations, and tainted the reputation of Credit Suisse and the Swiss finance industry.
Mr. Thiam, who has been credited with improving the bank’s financial position, has now become the biggest casualty of the scandal.Mr. Thiam, who has been credited with improving the bank’s financial position, has now become the biggest casualty of the scandal.
The dispute between two men, who had homes in the Lake Zurich area, stemmed from an argument Mr. Khan had with Mr. Thiam’s partner over some trees on the Thiam property, according to news reports. This disagreement was eventually followed by Mr. Khan’s departure for UBS.The dispute between two men, who had homes in the Lake Zurich area, stemmed from an argument Mr. Khan had with Mr. Thiam’s partner over some trees on the Thiam property, according to news reports. This disagreement was eventually followed by Mr. Khan’s departure for UBS.
After he left Credit Suisse, the company began surveillance of Mr. Khan to see if he was trying to poach employees or clients, which would have been a breach of his Credit Suisse contract.After he left Credit Suisse, the company began surveillance of Mr. Khan to see if he was trying to poach employees or clients, which would have been a breach of his Credit Suisse contract.
But the investigation turned messy after Mr. Khan confronted the corporate spy outside a Zurich restaurant in mid-September last year. But the investigation turned messy after Mr. Khan confronted the corporate spy outside a Zurich restaurant in mid-September.
Mr. Khan filed a criminal complaint, which prompted an investigation by Zurich’s public prosecutor. The spying efforts had not produced any evidence that Mr. Khan was trying to poach employees or clients.Mr. Khan filed a criminal complaint, which prompted an investigation by Zurich’s public prosecutor. The spying efforts had not produced any evidence that Mr. Khan was trying to poach employees or clients.
The surveillance activities also prompted an investigation of Credit Suisse by the Swiss Financial Market Supervisory Authority.The surveillance activities also prompted an investigation of Credit Suisse by the Swiss Financial Market Supervisory Authority.
Credit Suisse started its own inquiry, conducted by an outside law firm, which found the spying had been ordered by the bank’s chief operating officer, Pierre-Olivier Bouée, who resigned in October after the finding. The inquiry found that Mr. Thiam and other executives had not been aware of the surveillance effort. Credit Suisse started its own inquiry, conducted by an outside law firm, which found that the spying had been ordered by the bank’s chief operating officer, Pierre-Olivier Bouée, who resigned in October after the finding. The inquiry found that Mr. Thiam and other executives had not been aware of the surveillance effort.
But the incident was damaging for the bank, which had spent years trying to put its house in order, only to be faced with questions about whether its chief executive was out of the loop on a corporate spying effort and, if he was, what else might be happening under his management that he did not know about.But the incident was damaging for the bank, which had spent years trying to put its house in order, only to be faced with questions about whether its chief executive was out of the loop on a corporate spying effort and, if he was, what else might be happening under his management that he did not know about.
Before long, more reports about spying emerged in the news media.Before long, more reports about spying emerged in the news media.
In December, the Swiss newspaper Neue Zuercher Zeitung reported that Peter Goerke, a former head of human resources at Credit Suisse, had been followed in February 2019, just before he left the management board. And another former executive, Colleen Graham, said that she believed she had been surveilled in 2017 in retaliation for her stance on an accounting issue, according to The Wall Street Journal. In December, the Swiss newspaper Neue Zuercher Zeitung reported that Peter Goerke, a former head of human resources at Credit Suisse, had been followed last February, just before he left the management board. And another former executive, Colleen Graham, said she believed that she had been surveilled in 2017 in retaliation for her stance on an accounting issue, according to The Wall Street Journal.
Earlier this month, another Swiss newspaper, SonntagsZeitung, reported that Credit Suisse had spied on Greenpeace after the environmental group disrupted the bank’s annual shareholder meeting in 2017. Another Swiss newspaper, SonntagsZeitung, reported this month that Credit Suisse had spied on Greenpeace after the environmental group disrupted the bank’s annual shareholder meeting in 2017.
The bank on Friday declined to comment on the more recently reported incidents of spying. The bank declined to comment on Friday on the more recently reported incidents of spying.
The storm of questions put the bank in the grip of a high-powered tussle, as some shareholders threw their support behind the chief executive and demanded the resignation of the chairman, Urs Rohner.The storm of questions put the bank in the grip of a high-powered tussle, as some shareholders threw their support behind the chief executive and demanded the resignation of the chairman, Urs Rohner.
On Friday, Mr. Thiam maintained again that he “had no knowledge” of the spying efforts. “It undoubtedly disturbed Credit Suisse and caused anxiety and hurt,” he said in a statement. “I regret that this happened, and it should never have taken place.”On Friday, Mr. Thiam maintained again that he “had no knowledge” of the spying efforts. “It undoubtedly disturbed Credit Suisse and caused anxiety and hurt,” he said in a statement. “I regret that this happened, and it should never have taken place.”
During his tenure, Mr. Thiam managed to steady the bank profits, where a drive for revenue at any cost had pushed traders to take outsize positions in risky and hard-to-sell securities. He turned Credit Suisse away from the volatility of its investment bank by embracing its more reliable wealth management division. That strategy appeared to be working: The bank reported a doubling of profit in the third quarter of last year. During his tenure, Mr. Thiam managed to steady profits at the bank, where a drive for revenue at any cost had pushed traders to take outsize positions in risky and hard-to-sell securities. He turned Credit Suisse away from the volatility of its investment bank by embracing its more reliable wealth management division. That strategy appeared to be working: The bank reported a doubling of profit in the third quarter of last year.
Mr. Rohner, the chairman of the board, credited him with Credit Suisse’s “very solid foundation” in a statement on Friday.Mr. Rohner, the chairman of the board, credited him with Credit Suisse’s “very solid foundation” in a statement on Friday.
Mr. Thiam will step down on Feb. 14 and hand over the reins to Thomas Gottstein, a longtime veteran of the company who leads its Swiss operations. Mr. Thiam will step down next Friday and hand the reins to Thomas Gottstein, a longtime veteran of the company who leads its Swiss operations.