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Credit Suisse settles spying case with ex-wealth chief Iqbal Khan

Credit Suisse Group AG updates

Credit Suisse has settled one of the most explosive feuds in its history, reaching an out-of-court agreement with its former star wealth manager Iqbal Khan as it prepares for its first quarterly results under new chair António Horta-Osório on Thursday.

A spokesperson for the bank confirmed that it had reached a settlement with Khan and his wife after they sued Credit Suisse, and the private detective firm Investigo, for having had them followed through the streets of Zurich. “All involved parties have agreed to settle,” said Credit Suisse. “This matter is now closed.”

The news was first reported in Swiss newspaper NZZ am Sonntag.

Credit Suisse did not give further details about 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 arch rivals UBS two years ago, was one of Switzerland’s most dramatic corporate scandals, and eventually led to the ousting of Tidjane Thiam as Credit Suisse chief executive last February.

After Khan’s resignation, Credit Suisse feared that he would attempt to lure staff and clients to UBS and hired Investigo to monitor him and identify anyone he met with.

Khan alleged that a group of three men chased him and his wife through the streets of Zurich by car and on foot, which culminated in a physical confrontation behind the Swiss National Bank.

Credit Suisse subsequently admitted it had hired private investigators to trail another former executive, Peter Goerke, and that both incidents of surveillance had been ordered by its former chief operations officer Pierre-Olivier Bouée.

In response, Finma, Switzerland’s financial regulator, started enforcement proceedings last year over how the bank had breached the law with its surveillance and “in particular the question of how these activities were documented and controlled”.

Finma told the FT its enforcement proceedings against Credit Suisse were unaffected by the Khans’ settlement.

Credit Suisse has been roiled by a series of scandals in the two years since Khan’s departure, culminating in the dual crises surrounding controversial finance firm Greensill Capital and family office Archegos Capital this spring that revealed critical weaknesses in the bank’s risk management and culture.

The Swiss bank was forced to suspend $10bn worth of funds it invested in debt linked to Greensill in March. Just a few weeks later, it lost $5.5bn after the collapse of Archegos, which was a client of the bank’s prime brokerage unit.

Former Lloyds Banking Group chief executive Horta-Osório took over as chair in April and is reviewing the lender’s risk operations and strategic direction.

Meanwhile, Khan has enjoyed a period of strong growth since becoming joint head of UBS’s wealth management division. The unit reported its best second quarter last week, with record profits in Asia. Pre-tax profits at the wealth management arm jumped to $1.3bn, up 47 per cent from a year ago.

Khan, who at one point was seen as a potential Credit Suisse chief executive, was granted a $8.1m one-off payment when he joined UBS.

Additional reporting by Stephen Morris


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