Credit Suisse COO Resigns Over Spying Scandal; CEO Thiam Spared

As expected, the Credit Suisse board has exonerated CEO Tidjane Thiam, ensuring that Thiam, who first took over the leadership of the Swiss banking giant back in March 2015, won’t be pushed out over a scandal that began as an argument between two neighbors over “suburban shrubbery.”

Unfortunately, another C-Suite executive wasn’t so lucky: COO Pierre-Olivier Bouee was forced to step down after taking the fall for hiring the private security company Investigo to tail former Credit Suisse banker Iqbal Khan, who is on ‘gardening leave’ before starting a new job at cross-town rival UBS.

Pierre-Olivier Bouee

According to Bloomberg, the board said Bouee “acted alone”, and there was “no evidence that Thiam or the board knew about his actions.”

Losing Bouee won’t be easy for Thiam. The executive had been Thiam’s top lieutenant for more than 10 years at three different companies. Bouee submitted his resignation after the board heard ‘more details’ about the ‘surveillance operation’ carried out against Khan – an operation that ended with a confrontation between Khan and three Investigo agents in Zurich.

The bank started spying on Khan early last month over fears that he might be trying to poach bankers and clients from Credit Suisse to boost his profile at UBS.

The investigation was carried out by independent law firm Homburger after the story blew up in Swiss tabloids (though it hasn’t moved beyond the business pages in the English-language press), FT reports.

“The COO said that he alone, in order to protect the interests of the bank, decided to initiate the observation of Iqbal Khan, and that he did not discuss it with Credit Suisse’s chief executive or any other member of Credit Suisse’s executive board, the chairman of the board of directors of Credit Suisse, or the chairman of its audit committee,” the bank said.

With the board’s decision, the scandal will likely fade. However, mere hours before the bank’s announcement, it was reported that the Credit Suisse contractor who had hired the private detectives to tail Khan committed suicide. The contractor, whose name wasn’t given, fatally shot himself one week ago according to reports that first appeared in Swiss media.

CS said it appointed James Walker to replace Bouee as COO. Walker is currently the head of several senior roles in the bank’s finance organization, including as CFO for several critical US subsidiaries. In addition to Bouee, CS’s head of global security services also resigned, the bank said.

Initially, many suspected that the spying scandal might topple Thiam as it played out across the pages of several Swiss tabloids. Yet, several of CS’s largest executives expressed their support for Thiam, and convinced the board to follow their recommendation. Many suspect that the real reason Thiam managed to hang on is because the bank doesn’t have a clear succession plan, and instability at the top could be bad for the share price.