Switzerland’s top prosecutor has opened a probe into events leading up to the government-orchestrated takeover of Credit Suisse by UBS.
The Swiss attorney general’s office is examining potential breaches of criminal law by government officials, regulators and executives of the two banks, wherein sensitive information from the negotiations was leaked to the press, a person familiar with the matter told the Financial Times.
“In view of the relevance of the events, [the office] wants to proactively fulfill its mission and responsibility to contribute to a clean Swiss financial center and has set up monitoring in order to take immediate action in any situation that falls within its field of activity,” the agency told the Financial Times, Bloomberg and The Wall Street Journal.
Stefan Blättler, the prosecutor, has issued many “investigatory orders” to government bodies and is expected to interview key officials in relation to the takeover, the Financial Times reported.
There were “numerous aspects of events around Credit Suisse” that asked for an investigation ... to “identify any crimes that could fall within the competence of the [prosecutor],” the agency wrote, without specifying what it was looking for.
Lawmakers, for one, have questioned the use of emergency powers by a seven-person Federal Council, which offered taxpayer-backed financial guarantees to UBS, but did not consider the opinions of shareholders from either bank. Holders of roughly $17 billion worth of Credit Suisse additional tier 1 bonds, made worthless by the deal, have said they were unfairly targeted.
Government officials and regulators, in their defense, have said letting Credit Suisse fail would spur a national, and perhaps global, financial crisis.
Some affected investors have vowed to take the Swiss government and financial regulator to court.
Shareholders of both banks will get the chance to express their grievances this week at annual meetings: Tuesday for Credit Suisse and Wednesday for UBS.
More than three-quarters of Swiss citizens opposed the deal, according to early polling. A majority favored splitting Credit Suisse or recovering bonuses from senior staff who are seen as responsible for conditions at the bank.
A 30% workforce cut?
As it stands, the deal could result in 11,000 job cuts in Switzerland alone, and another 25,000 across the globe — adding up to a 30% workforce reduction, SonntagsZeitung reported Sunday, citing an unidentified senior manager at UBS.
The report comes days after outgoing UBS CEO Ralph Hamers said the bank wants to “take away uncertainty as soon as we can” regarding restructuring and prospective layoffs.
Representatives of Credit Suisse and UBS declined to comment to the Financial Times, The Wall Street Journal and Bloomberg.
The Financial Times, however, reported Saturday that UBS narrowed to four — Bain & Co., the Boston Consulting Group, McKinsey and Oliver Wyman — its list of management consultants to advise on how to integrate Credit Suisse into the bank.
