ZURICH (Reuters) - A group representing Swiss bank employees demanded an apology from Credit Suisse boss Brady Dougan on Thursday after he said the practice of helping Americans conceal their wealth was the work of a few dishonest employees.
The American-born CEO told a U.S. Senate subcommittee on Wednesday that he and other top managers were not aware a small group of Credit Suisse private bankers had helped U.S. customers evade taxes with offshore accounts.
“The evidence showed that some Swiss-based private bankers went to great lengths to disguise their bad conduct from Credit Suisse executive management,” Dougan told the senators.
He said the wrongdoing appeared to have taken place before 2009 despite “industry-leading compliance measures” at the bank.
The body representing staff at Credit Suisse and other Swiss banks reacted with astonishment to Dougan’s comments, saying it was “hardly credible” that the bank’s bosses knew nothing of the practices.
“It was common knowledge that tax evasion was the strategy, a business model pursued by many banks for a long time,” the Schweizerischer Bankpersonalverband said in a statement.
It said Dougan’s comments “vilify lots of employees that had nothing to do with offshore U.S. banking”, and demanded he apologize to the bank’s 46,000 staff.
The comments may have been motivated by efforts to lessen the bank’s penalties in the United States, but Dougan still owes staffers an explanation, the employee group said.
More than 22,000 Americans were using Credit Suisse to park combined assets of $12 billion at one time, according to a report released by the U.S. Senate ahead of Wednesday’s hearings.
The Senate subcommittee alleged that Credit Suisse bankers held secret meetings in luxury hotels and used hidden elevators to help foreign clients hide their wealth, a practice that one senator said belonged in a spy novel, not a bank.
Credit Suisse management has accepted responsibility for wrongdoing by its staff, while rejecting any suggestion that it was bank policy to help foreign clients hide their wealth from their governments.
“Credit Suisse repeatedly said that wrongdoing was centered around a small group of employees. This reflects the findings of our internal investigation as well as statements made by the SEC (Securities and Exchange Commission) in their order of February 21, 2014,” the bank said in an emailed statement.
When the bank sent data on employees to U.S. prosecutors investigating its U.S. dealings last year, some staff voiced outrage and went to court to prevent Credit Suisse from releasing the data.
Credit Suisse last week settled charges levied by the SEC, admitting to wrongdoing and paying $196 million in fines. But a settlement with the Justice Department is not imminent, a person familiar with the matter has told Reuters.
Credit Suisse is one of 14 Swiss banks being probed by U.S. prosecutors over taxes, after UBS became the first major bank to agree on a settlement over the charges. Two smaller Swiss banks, Wegelin & Cie and Bank Frey, have had to close as a result of the U.S. investigation.
Reporting By Katharina Bart; editing by Tom Pfeiffer and Jane Baird