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Updates from Credit Suisse Group AG
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Credit Suisse has settled one of the most explosive feuds in its history, reaching an out-of-court settlement with its former star wealth manager Iqbal Khan as he prepares for his first quarterly results under the leadership of his new president António Horta-Osório on Thursday.
A spokesperson for the bank confirmed that it reached an agreement with Khan and his wife after they sued Credit Suisse and private investigator firm Investigo, for having followed them through the streets of Zurich. “All parties involved have agreed to settle,” Credit Suisse said. “This matter is now closed.”
The news was first reported in the Swiss newspaper NZZ am Sonntag.
Credit Suisse did not give further details on the settlement, while Khan and Investigo did not respond to requests for comment.
The feud between Khan and Credit Suisse, after the banker defected to become his big rival UBS two years ago, has been one of Switzerland’s most dramatic corporate scandals and ultimately led to the ouster of Tidjane Thiam as CEO of Credit Suisse last February.
After Khan resigned, Credit Suisse feared he would try to lure staff and clients to UBS and hired Investigo to monitor him and identify anyone he met.
Khan alleged that a group of three men chased him and his wife through the streets of Zurich by car and on foot, which resulted in a physical confrontation behind the Swiss National Bank.
Credit Suisse later admitted to hiring private investigators to track down another former executive, Peter Goerke, and that the two surveillance incidents were ordered by its former COO Pierre-Olivier Bouée.
In response, Finma, Switzerland’s financial regulator, last year launched enforcement proceedings into how the bank broke the law with its oversight and “in particular the question of how these activities were documented. and controlled “.
Finma told the FT that its enforcement proceedings against Credit Suisse were not affected by the Khans settlement.
Credit Suisse has been rocked by a series of scandals in the two years since Khan’s departure, culminating this spring with the dual crisis surrounding controversial financial firm Greensill Capital and family office Archegos Capital, which exposed weaknesses critics in the risk management and culture of the bank.
The Swiss bank was forced to suspend $ 10 billion in funds invested in debt linked to Greensill in March. A few weeks later, she lost $ 5.5 billion after the collapse of Archegos, which was a client of the bank’s main brokerage unit.
Former Lloyds Banking Group Managing Director Horta-Osório took over as chairman in April and is reviewing the lender’s risk operations and strategic direction.
Meanwhile, Khan has enjoyed a period of strong growth since becoming co-head of UBS’s wealth management division. The unit posted its best second quarter last week, with record profits in Asia. The wealth management industry’s pre-tax profits jumped to $ 1.3 billion, up 47% from a year ago.
Khan, who at one point was considered a potential CEO of Credit Suisse, received a one-time payment of $ 8.1 million when he joined UBS.
Additional reporting by Stephen Morris
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