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Credit Suisse acknowledges hit to reputation, but defends CEO over spying affair

Credit Suisse Group AG defended its CEO following the resignation of its COO over a spying affair, saying it was an "exceptional occurrence" while acknowledging the matter had tarnished the bank's reputation and that of Swiss finance.

The bank said Oct. 1 that COO Pierre-Olivier Bouée and global security services chief Remo Boccali had resigned after an investigation found that the COO had mandated private detectives to tail former wealth management boss, Iqbal Khan, who had left the bank to join UBS Group AG.

The investigation showed that the COO had acted alone, and while he had done so to protect the bank's interest, Credit Suisse could not condone such action, Chairman Urs Rohner told journalists at a news conference. The COO had wanted to ensure that Khan was not poaching clients or employees before his move to UBS, he said.

"To order the observation was wrong and inappropriate," he told reporters.

CEO in the clear

There was "zero evidence" that CEO Tidjane Thiam knew of the matter and he continues to have the full backing of the bank's board, Rohner said.

The persons involved had acted alone, in a matter that carried "reputational risk" for the bank and "unfit to start with," Rohner said.

"These events were damaging for the reputation of Credit Suisse and also the entire financial center of Switzerland," he said.

The bank defended its CEO, saying the fact that the COO had acted alone did not suggest that Thiam was not in charge of the bank.

"I don't believe in my own mind speaking as a board member that that suggests that Mr. Thiam is not on top of the rest of the organization," John Tiner, chairman of the bank's audit committee, told the news conference.

"I think that this was a highly irregular and unusual act and that form of taking responsibility for something so significant as this without escalation is a highly exceptional occurrence in Credit Suisse," he said.

Tailed in Zurich

The affair came to light in September when Khan filed a criminal complaint after discovering he was being tailed by private detectives in Zurich.

There was no evidence from the investigation to show that Khan had been poaching clients or employees, Tiner said.

Rohner said the bank had no intention of pressing charges and said that no other employees were involved, he said.

While Rohner said he did not think there was a "problem" with the bank's corporate culture, he said the lender would be asking all employees in the weeks and months to come to ensure they comply with Credit Suisse's code of conduct.

The bank is also looking at other measures such as whether to have its security services report to its compliance division, he said.