Credit Suisse adviser ‘bilked client of millions’

A customer service representative for Credit Suisse defrauded a wealthy client of more than 50 million francs, the Tages Anzeiger newspaper reported on Wednesday, citing “well-informed sources”.

Credit Suisse adviser 'bilked client of millions'
Photo: AFP

The client was “probably from abroad” said the Zurich-based daily, which noted that the employee apparently no longer works for the bank.

It said Credit Suisse, Switzerland’s second largest bank, has filed a complaint against him.

In its financial report for the third quarter of 2015, the bank mentions under a section on “customer account matters” that some clients have raised concerns about a “former relationship manager” whose management of their accounts led to investment losses.

“A few clients have claimed that a former relationship manager in Switzerland has exceeded his investment authority in the management of their portfolios, resulting in excessive concentrations of certain exposures and investment losses,” says the report, released in October 2015.

“Credit Suisse AG is investigating the claims, as well as transactions among the clients,” it said.

“No formal proceedings have been initiated at this time.”

Tages Anzeiger said that based on its information the fraud of the customer service representative amounts to more than half of an “operational expenditure” of 98 million francs for dealing with wealth management clients for the third quarter of 2015.

The newspaper said, that according to its sources, the bank will be making further provisions to account for the fraud in the fourth quarter.

It said the issue had come to light as the result of a cleanup ordered by the bank’s new CEO Tidjane Thiam.

The bank itself had become aware of the misconduct of their employee and not the affected customer, the newspaper said.

The bank declined to comment on the case. 

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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.