Fri, Mar 3rd 2023
Credit Suisse has begun informing high-net-worth clients that their sensitive, personal information was compromised in a data breach, according to an exclusive story in On the Money.
A rogue employee
Credit Suisse sent letters to top customers who keep $50 million or more in the bank that a rogue employee stole data including their social security numbers, employment details, and contact information. The letter reads that “an individual employee, who has since left the firm and had legitimate access to your personal data at the time for their daily work, inappropriately copied this information without Credit Suisse’s authorization onto their personal device.”
Although there is currently no evidence that the data has been exploited, some clients are understandably worried.
“Someone stole enough information to take out a loan or buy a house in my name,” one customer told OTM. “And the CEO can’t even write a letter — it’s only from the chief compliance officer?!”
The letter was signed by the bank’s chief compliance officer and group data protection officer. The bank informed clients that they would be enrolled in an identity theft protection service, Identity Works, but would not be paying for the fees. The bank noted that clients can file a report with the Trade Commission or a state Attorney General.
“Swiss banks are supposedly about discretion and secrecy,” the same customer told OTM. “They’ve failed in that and have the audacity to pay minor credit monitoring fees. They’re so cheap they can’t pay an extra $20.”
Credit Suisse in freefall
Less than a month ago, The Swiss Times reported that Credit Suisse lost 7.3 billion Swiss francs in 2022 – about 300 million CHF more than what financial analysts expected.
Credit Suisse has been plagued by years of scandals, court cases, and record-breaking losses. The bank dropped from a profit of CHF 2.7 billion in 2020 to a loss of CHF 1.65 billion in 2021, mostly due to bad investments in failed supply chain group Greensill and hedge fund group Archegos.
In the 2021 collapse of the hedge fund, U.S. authorities have charged Archegos’ founder Bill Hwang and three colleagues with racketeering and fraud charges. In October of 2021, U.S. and U.K. authorities handed down a verdict that Credit Suisse must pay CHF 439 million to resolve a Mozambican corruption scandal which included bribery and fraud charges.
The same week, the Swiss Financial Market Supervisory Authority announced it had discovered “serious organization shortcomings” in its investigation into a corporate espionage case that began with a 2020 audit of the bank. According to the investigation, Credit Suisse spied on members of its board and former employees. By 2022, bad headlines became synonymous with the bank and #DebitSuisse was trending on Twitter.
In October of 2022, Credit Suisse Chairman Axel Lehmann made an attempt to shore up confidence by announcing a radical restructuring plan, but rumors of its true financial health scared off many of their wealth management clients. UBS was the main recipient of customers pulling their cash out of Credit Suisse accounts. UBS saw a 23% increase in pre-tax profits for its last quarter of 2023, thanks to an influx of Credit Suisse clients.
More blunders like this week’s could be the death of Credit Suisse.
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