Credit Suisse to Hand Over Video in Case Linked to Spy Claim
Credit Suisse to Hand Over Video in Case Linked to Spy Claim
(Bloomberg) -- Credit Suisse Group AG was reprimanded by a U.S. judge for failing to produce documents in a case filed by a whistleblower former executive who accuses the bank of retaliating against her.
Colleen Graham, who ran a software joint venture between Credit Suisse and Palantir Technologies Inc., argued she was pushed aside and later followed for failing to sign off on aggressive accounting practices before the business was closed down. Credit Suisse, which denies the allegations, now has to hand over a video and other documents related to the case.
Graham made headlines in December as the third spying allegation to rock the Swiss bank in almost as many months after the surveillance of former international wealth head Iqbal Khan and ex-human resources chief Peter Goerke in Zurich. Khan was spied on after he left for UBS Group AG, while the reasons for Goerke’s surveillance are still unknown.
The scandal shook the bank. It pinned the blame for the affair on ex-chief operating officer Pierre Olivier Bouee, who was fired. Former-CEO Tidjane Thiam resigned shortly after, though denied he was aware of the actions. Chairman Urs Rohner said surveillance wasn’t part of the bank’s culture and blamed rogue operators acting without the board’s knowledge.
The bank has acknowledged the cases in Switzerland, though not that in the U.S. of Graham.
The documents Credit Suisse must now produce relate to the Trader Holistic Surveillance, or THS, product including a company video, administrative law Judge Theresa Timlin said in a previously unreported June order on the Graham case. The ruling pertains to access to documents and not to her underlying allegations of spying and retaliation.
“Credit Suisse’s failure to produce the requested documents cannot be excused,” according to Timlin, a U.S. Department of Labor judge.
The ruling is a partial victory for Graham, who has seen setbacks that have narrowed the case since she first brought it in 2018. The judge dismissed Palantir and the Credit Suisse First Boston Next fund, a related entity, from the case in January.
“This matter is frivolous and has been repeatedly defeated in full, after a thorough review of all relevant materials by multiple finders of fact and law,” Credit Suisse said in a statement. “This current matter has also been significantly narrowed by rulings adverse to Ms. Graham on the merits in advance of a final hearing.”
The venture that Graham led was named Signac. It was designed to develop a more effective way of monitoring traders for potential criminal behavior. She accuses Credit Suisse of passing off the venture’s work as purely a bank effort, denying her credit and compensation, and then spying on her after she refused to sign off on what she believes was aggressive accounting.
The ruling on the documents is part of a larger dispute in which Graham is seeking compensation for what she says is her promised equity stake in the Signac project.
“Signac was projected to be worth billions of dollars based almost entirely on the THS software it developed,” which remains extremely valuable given Palantir’s stock-market listing, Graham said in a statement. Palantir began trading on the New York Stock Exchange last week and is valued at about $15 billion.
While Timlin will hold a full series of hearings in March, her ultimate decision may be appealed to the Department of Labor’s Administrative Review Board. Rulings from the five-member board could then be subject to a federal court appeal.
In the most recent dispute over evidence, the bank said it didn’t provide the documents because they included professional secrets that should be covered by a protective order, the judge wrote. Timlin rejected that defense and ruled that the THS documents and Graham’s personnel file be excluded from any future protective order.
The bank “did not have a pending motion for a protective order at the time it failed to produce the documents,” Timlin wrote.
Still, Timlin granted the bank’s request for a protective order on other documents. She also agreed that Credit Suisse didn’t have to hand over personnel files held by Signac as it was a separate entity. Graham left Credit Suisse in February 2016 to join Signac.
Both sides must share all relevant documents with the other party by Oct. 30, the judge said.
Credit Suisse has previously said it had conducted “thorough and comprehensive internal investigations into every one of Ms. Graham’s claims and found them to be entirely baseless.”
Graham said her refusal to approve how revenue from Signac would be booked prompted the bank to exclude her from meetings, threaten to fire her and deny her compensation, all to make Signac seem like a failure, her lawyer said in her 2018 complaint. Then the bank resorted to even more extreme measures, her lawyers said.
Credit Suisse sent an “unidentified woman to follow, harass and intimidate Ms. Graham for three days” in and around New York, according to the complaint.
The video at the heart of the legal tussle was shown to shareholders and analysts at the bank’s December 2018 investor day and was referenced on the slides of a presentation by Lara Warner, the bank’s chief of compliance. The video isn’t included in an archived version of the event that is available on Credit Suisse’s website.
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