Credit Suisse observation activities prompt FINMA to launch enforcement proceedings

Maria Nikolova

The Swiss regulator will pursue indications of violations of supervisory law in the context of the bank’s observation and security activities.

Swiss

The Swiss Financial Market Supervisory Authority FINMA has initiated enforcement proceedings against Credit Suisse in the context of its observation activities.

This follows the appointment of an auditor to investigate Credit Suisse in the context of its observation activities. The auditor’s investigation has now been completed. FINMA has opened enforcement proceedings against the bank, in which it 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.

Typically such proceedings can be expected to take several months.

Credit Suisse’s respond to today’s announcement by Finma says:

“Credit Suisse takes note of the decision announced today by Finma to open enforcement proceedings in the context of the “observation matter”. Credit Suisse will continue to fully cooperate with Finma and is determined to support the effort to ensure a complete and expeditious conclusion of the review of this episode and incorporate lessons learned. The Board of Directors and the Executive Board of Credit Suisse agree and unequivocally affirm that the observation of employees is not part of the culture of Credit Suisse. No further comments can be made at this stage until findings are presented by Finma”.

The matter concerns the observation of Peter Goerke, a Member of the Executive Board at the time. He was placed under observation by a third-party firm on behalf of Credit Suisse for a period of several days in February 2019.

In December 2019, Credit Suisse said that its Board of Directors had carried out internal and, with the support of Homburger AG, external investigations into this matter.

The investigation concluded that Pierre-Olivier Bouée, a former Member of the Executive Board, 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.

During questioning by both the Board of Directors and Homburger following the Iqbal Khan matter, the responsible individuals did not respond truthfully when asked about any additional observations and did not disclose the observation of Peter Goerke. Furthermore, when organizing and carrying out the observation of Peter Goerke, they took care not to leave any identifiable trace in the bank’s systems.

Credit Suisse noted back then that the new investigation by Homburger did not find any indication that the Group CEO Tidjane Thiam, other Members of the Executive Board, or Members of the Board of Directors had any knowledge of the observation of Peter Goerke until media reported on it.

The Board of Directors considers the observation of Peter Goerke to be unacceptable and completely inappropriate, Credit Suisse stressed, adding that this operation and the subsequent observation of Iqbal Khan do not correspond to the corporate culture of Credit Suisse as promoted by the Board of Directors. The Board of Directors apologized to Peter Goerke for the observation.

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