If Iqbal Khan, Credit Suisse’s former head of wealth management felt like he was being watched over the last few weeks, that’s because he was. Khan left Credit Suisse after a tiff with CEO Tidjane Thiam and was headed for greener pastures at UBS. To find out of Khan was taking any CS employees with him COO Pierre-Olivier Bouée ordered Investigo to start following him.
The problem? The PI wasn’t so private. Mr. Khan caught wind of and confronted the stalker outside a Zurich restaurant in September and has filed a complaint with the authorities. Cue the PR nightmare for CS.
Crossing the line
In a press conference on Tuesday, CS threw its COO under the bus. Chairman Urs Rohner said “it was wrong to order surveillance,” and called for those responsible to step down. Well, Urs got his wish. Bouée and head of Credit Suisse security, Remo Boccali, both handed in their resignation. Neither of them will get the pay-out standard for departing executives. And you thought DB was the most f*cked up bank in Europe.
It wasn’t just the COO and head of security who were embroiled in this scandal … some lost more than just their jobs. The unnamed contractor who was acting as a middle man between CS and the private investigating firm turned up dead of an apparent suicide. The plot thickens.
When asked if CS felt any responsibility, Mr. Rohner said the bank was “deeply saddened.” As sad as he can be that the only person who really knew what was going on wound up dead.
How high up does it go?
If CS is to be believed, the buck stopped with Boccali and Bouée. According to a statement by the firm, neither the CEO or else anyone on the executive board had any idea this was going on. Sure thing, guys.
The bottom line …
While spying on former employees isn’t necessarily illegal, investigations into criminal wrongdoing by the bank are ongoing. According to Zurich prosecutors, the consultant’s death is part of that investigation.
As far as the COO role goes, Bouée will be replaced by the former CFO of Credit Suisse’s US operation, James B. Walker.
Charles Schwab is going all Robinhood on us. Chuck announced it will remove fees for US stocks, ETFs, and options.
Why tho?
This move is at least partially a reaction to Interactive Brokers’ announcement last week that it would provide free trades, following the trend in recent years (g*d d*mn millenials). In fact, just last year, Fidelity, Vanguard, and JPMorgan all eliminated fees and commissions on several of their offerings.
Schwab, which has struggled as of late due to a challenging economic environment and announced more than 600 job cuts last month, will focus on making up for the lost revenue by offering advice and portfolios to clients approaching retirement.
To put things in perspective, the $4.95 commission per trade made up roughly 4% of Chuck’s net revenue each quarter.
The bottom line …
Unsurprisingly, this announcement did not bode well with Schwab’s investors, who infer that more zero-fee investment options at Charles’ rivals are on the horizon. And they were right. Late last night TD Ameritrade announced it too will eliminate its commission for ETF and options trades.
Schwab and Interactive’s shares were both down over 9%, which sounds bad, but pales in comparison to TD Ameritrade’s drop of OVER 25%. Ameritrade estimates its net revenue will decline by around 15% thanks to this loss of fees.
