Credit Suisse Disclosure of Staff Details to U.S. Ruled Illegal
(Bloomberg) — Credit Suisse Group AG, the Swiss bank that paid $2.6 billion last year to settle a U.S. tax dispute, illegally sent a former employee’s details to U.S. authorities to help resolve the probe, a Geneva court ruled.
The ex-employee, an assistant relationship manager at the bank’s North America International desk in Geneva, was cited in documents turned over to the U.S. in 2012, according to a copy of a May 28 court judgment seen by Bloomberg. The individual’s name was blacked out.
The court said the transfer of the documents was illegal and overstepped an administrative assistance procedure as the information identified the employee or enabled authorities to identify him. It ordered the bank to pay compensation and legal costs, according to the judgment.
Credit Suisse will appeal the court’s decision, the bank said in an e-mailed statement Monday.
Credit Suisse ’s main Swiss subsidiary is one of about 14 banks to have settled with the U.S. over the handling of undeclared offshore bank accounts for U.S. taxpayers, a probe that has already reaped about $4 billion in penalties.
While Swiss companies are usually prohibited from sending evidence to assist foreign legal proceedings, the government authorized an exemption in April 2012 at the request of an undisclosed number of banks.
“The court has decided on an individual case and has not determined that the cooperation under the authorization by the Swiss Federal Council is generally illegal,” the bank said. “We do not comment on the individual case.”
The U.S. Justice Department opened criminal investigations against more than a dozen banks, including Credit Suisse, after resolving a dispute with the largest Swiss bank, UBS Group AG, in 2009. More than 100 banks entered a separate voluntary disclosure program in 2013.
The Geneva ruling is the first by a court that concretely determines the transfer of personal employee details was illegal, according to Douglas Hornung, a lawyer in Geneva representing the former Credit Suisse employee.
Every former employee or third-party “whose details were transferred by banks, or who were legally opposed to the communication of their details, was waiting for this decision,” Hornung said in an e-mailed statement on Monday.
–With assistance from Jeffrey Vögeli in Zurich.
