Swiss Regulator Opens Enforcement Proceedings Against Credit Suisse in Spying Scandal

(Adds Swiss regulator's comments, details, background.)

By Pietro Lombardi

The Swiss financial regulator has opened enforcement proceedings against Credit Suisse Group AG in relation to the surveillance scandal that has hit the reputation of the Swiss bank and rocked its leadership.

The Swiss Financial Market Supervisory Authority FINMA said Wednesday that "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."

The move follows the appointment by the watchdog, earlier this year, of an auditor to investigate the issue. That investigation is now completed, the regulator said.

Responding to the regulator's decision, Credit Suisse said Wednesday that it "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 observation of employees is not part of the culture of Credit Suisse," it said, adding no further comments will be made until the authority presents its findings.

The spying scandal, stemming from the surveillance of two Credit Suisse executives, began in September last year, when the bank's former international wealth management head, Iqbal Khan, confronted an investigator following him in the streets of Zurich.

The scandal led to the resignation of Chief Executive Tidjane Thiam. Mr. Thiam said he hadn't known about the surveillance before it became public and regretted it had happened.

The Swiss bank hired a law firm to investigate the issue and found that former Chief Operating Officer Pierre-Olivier Bouee was responsible for the surveillance.

Finma didn't say when the proceedings will be concluded, noting that they "can be expected to take several months."

Write to Pietro Lombardi at pietro.lombardi@dowjones.com; @pietrolombard10

(END) Dow Jones Newswires

September 02, 2020 02:47 ET (06:47 GMT)

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