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
"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.
[to top of second column]
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
(Reporting By Katharina Bart; editing by
Tom Pfeiffer and Jane Baird)
[© 2014 Thomson Reuters. All rights
Copyright 2014 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.