Bank employee info transfer to US ‘illegal’

A Geneva court has ruled that Credit Suisse's decision to provide US tax authorities with information on an employee was illegal, according to the ruling made public on Monday.

Bank employee info transfer to US 'illegal'
Photo: AFP

In April 2012, the Swiss government gave 11 Swiss banks the go-ahead to accommodate a US tax evasion probe and hand over the names of thousands of their employees and consultants working with American clients.
Fearful of harsh US penalties and prosecution, the banks then met Washington's demands, handing over personal information about numerous staff members, and reportedly also making personal documents, emails and details of telephone calls available.
But in a ruling reached on May 28th and made public on Monday, a Geneva court found in favour of a former Credit Suisse employee, who had challenged Switzerland's second largest bank over the information about her given to US authorities in 2012.
The woman, who was not named, had not been informed at the time that information concerning her was being shared — something that ran counter to Switzerland's long cherished bank secrecy practices, which are currently under international pressure.
In the first Swiss court ruling on the controversial practice, the Geneva court noted “the unlawfulness of Credit Suisse's communication to US authorities, outside an international process of mutual assistance, documents containing data” on the former employee, making it possible to identify her.
The court found that the woman, who was not named, “can legitimately consider that she will be at risk if she travels to the United States,” and ruled that this impacted her “freedom of movement, (and) constitutes a deprivation of (her) personal liberty”.
Lawyer Douglas Hornung, representing the former employee, described the ruling as “an important first-step victory.”
It could have implications for the some 400 other current and former employees of Swiss banks who his law firm represents in similar cases.
Credit Suisse, which as a result of the US probes was slapped with a $2.8-billion fine last year after pleading guilty to having helped rich Americans evade taxes, said it had taken note of the Geneva court ruling.
“We plan to appeal,” spokesman Jean-Paul Darbellay wrote in a statement sent to AFP.
“The court has decided on an individual case and has not determined that the cooperation under the authorization by the Swiss Federal Council is generally illegal,” he said.

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Probe unearths second spying case at Credit Suisse

An internal Credit Suisse probe confirmed Monday that a second executive had been spied on, following earlier revelations that the bank's former head of wealth management was tailed by private investigators.

Probe unearths second spying case at Credit Suisse
Photo: Depositphotos

But Switzerland's number two bank maintained that just one senior leader, who has since been forced out, was entirely to blame for both incidents and that rest of the top brass had not been aware of the activities. 

Releasing the investigation conducted by the Homburger law firm, Credit Suisse said that “it has been confirmed that Peter Goerke, who was a Member of the Executive Board at the time, was placed under observation by a third-party firm on behalf of Credit Suisse for a period of several days in February 2019.”

The probe was launched following media reports last week that spying at Credit Suisse ran deeper than one case.

The banking giant was shaken by the discovery last September that surveillance had been ordered on star banker and former wealth management chief Iqbal Khan.

READ: Credit Suisse boss resigns following spying scandal

Kahn was tailed after he jumped ship to competitor UBS, sparking fears he was preparing to poach employees and clients.

That revelation came after Khan confronted the private investigators tailing him, leading to a fight in the heart of Zurich. Khan pressed charges.

An initial investigation by Homburger blamed former chief operating officer Pierre-Olivier Bouee, who stepped down, but found no indication chief executive Tidjane Thiam was involved.

The probe results released Monday echoed those findings, concluding that Bouee “issued the mandate to have Peter Goerke put under observation.”

“As was the case with Iqbal Khan, this observation was carried out via an intermediary,” it said, stressing that Bouee “did not respond truthfully” during the initial investigation “when asked about any additional observations and did not disclose the observation of Peter Goerke.”

The new investigation also did not find indications that Thiam or others in the board or management “had any knowledge of the observation of Peter Goerke until media reported on it,” the statement said.

“The Board of Directors considers the observation of Peter Goerke to be unacceptable and completely inappropriate” it said, adding that it had issued an apology to Goerke.

It added that “safeguards” were already in place to avoid future similar misconduct. Switzerland's market watchdog FINMA meanwhile said last week that it was “appointing an independent auditor to investigate Credit Suisse in the context of observation activities.”

“This investigator will clarify the relevant corporate governance questions, particularly in relation to the observation activities,” a statement said Friday.