The Swiss bank as well as former risk boss Lara Warner face legal proceedings over software meant to detect potential rogue traders. For Warner, the parameters have changed.
A U.S. judge is allowing a legal claim against Zurich-based Credit Suisse and Lara Warner (pictured below) to go forward in arbitration, according to documents seen by finews.com. Credit Suisse had sought to stifle the proceedings, which are being brought by former executive Colleen Graham.
This represents a setback for Credit Suisse in the case, which emerged after a corporate surveillance scandal surfaced in autumn of 2019. Graham, like former top executive Iqbal Khan, asserts that she too was followed after falling out with the bank. Credit Suisse admitted shadowing Khan as well as Peter Goerke, another former top executive.
Third-Party Ambitions
Graham's claims center on Signac a joint venture between the bank and Silicon Valley data firm Palantir. Besides dealing floor risks like rogue traders which Signac helped the bank address, the joint venture was to scrutinize private bankers in the wealth management arm.
By the end of 2017, the two companies planned to sell the roughly 40-person strong team's software to third parties. It never came to that: by June the joint venture was history.
Retaliation For Refusals?
Graham (pictured below), a veteran Credit Suisse compliance executive who had overseen Signac and stood to gain financially from its success, has since lodged claims against the bank and Warner, who represented the bank on the joint venture's board. Graham alleges that Credit Suisse continued to use software that originated through the technology venture with Palantir.
She argues she lost out on funds she would have earned had the venture not been halted – and has also lodged a whistleblowing complaint over alleged faulty accounting practices. The U.S. lawyer claims Credit Suisse retaliated against her when she refused to agree with its accounting at Signac before the bank pulled the plug.
A spokeswoman for Credit Suisse denied her allegations. «Credit Suisse has fully prevailed on this matter multiple times, in separate venues, and in each case tried so far, all of the claims against Credit Suisse were dismissed,» she said. «This latest filing is a fruitless attempt to bring forward the same claims that were previously fully rejected following fulsome hearings.»C
Changed Parameters
The arbitration now allowed to go forward involves Warner, who resigned last month after two major scandals – Greensill, then Archegos – surfaced in March. It isn't clear how the legal parameters will change after she is no longer a Credit Suisse employee (Warner couldn't immediately be reached for comment).
To be sure, the spat over the «trading holistic surveillance» software represents a peccadillo compared to Credit Suisse's bigger issues at the moment. Under Chairman António Horta-Osório, the Swiss bank is heading into long period of uncertainty as it ascertains the crisis damage and reviews strategy, as finews.com reported.
