After appointing an auditor last December, FINMA decided to open so-called enforcement proceedings. © Keystone/Lukas Lehmann
The Swiss financial supervisor FINMA says it has opened enforcement proceedings against Credit Suisse into the 2019 spying affair that toppled the bank’s leadership and tarnished its reputation.
FINMA opened the proceedings after an auditor appointed last December completed its investigation of Credit Suisse, which has acknowledged surveillance activities against former wealth management boss Iqbal Khan (now at the rival UBS bank) as well as former human resources head Peter Goerke.
“FINMA … will pursue indications of violations of supervisory law in the context of the bank’s observation and security activities and in particular the question of how these activities were documented and controlled,” the watchdog said in a statement on Wednesday. The probe is expected to last several months.
Ex-chief executive officer Tidjane Thiam resigned in February in the case that roiled Zurich’s banking scene, contending that he knew nothing of the spying activities but acknowledging that it caused anxiety and pain.
The regulator can demand that banks improve their compliance and internal supervision systems if they are found to be lacking – as it has done with other banks in the past.
FINMA cannot issue fines but can demand that guilty parties surrender illicitly gained funds. It has the ultimate sanction of suspending or revoking licenses for individuals or institutions to operate in Switzerland, but only does so in the most extreme cases of market abuse.
In response to FINMA’s enforcement proceedings, Credit Suisse said it would cooperate “to ensure a complete and expeditious conclusion of the review of this episode and incorporate lessons learned.”
Credit Suisse reiterated previous statements that spying on its employees was not part of its culture.
The bank’s own internal probe, carried out by a Zurich law firm last year, had found then-chief operating officer Pierre-Olivier Bouée initiated spying on Khan, who had led Credit Suisse’s wealth management activities.
It included pursuing Khan through the streets of Zurich to see if he was trying to poach former colleagues to join him at UBS. Bouée was forced to resign for his part in the scandal.
Zurich prosecutors have also opened a criminal investigation into the spying allegations that resulted in a Credit Suisse contractor taking his own life.
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