In 2015, Iqbal Khan was on top of the world. The 34-year-old finance wunderkind, who had moved from Pakistan to Switzerland when he was just a teenager, was promoted to head of international wealth management at Credit Suisse, the global investment bank. “Even Khan was shocked” by his fast ascension, writes Duncan Mavin in his new book, “Meltdown: Greed, Scandal, and the Collapse of Credit Suisse” (Pegasus Books), out now. But his success would be short-lived.
Khan, who was “widely seen as the ‘crown prince’ [of Credit Suisse], the CEO-in-waiting,” would soon become ensnared in one of the most bizarre scandals in the history of global finance, “one which laid bare the jealousies, egos and betrayals that frequently characterized the bank,” writes Mavin. “The affair came to be known as ‘spygate.’ ”
Just a few years after his dramatic rise within the company, Khan realized that he was being tailed by private detectives, hired by executives at Credit Suisse. They were part of a team that’d been tracking Khan for weeks. “They’d observed him at his home, when he was out jogging, when he was having a coffee with former colleagues,” writes Mavin. “Their mandate was to take photos and record evidence of anyone with whom Khan met,” and that included his children.
The investigation was prompted by suspicions that Khan might try to poach his best co-workers and take them to a competing bank. Although Credit Suisse’s CEO Tidjane Thiam never admitted publicly to the scheme, behind the scenes he allegedly grumbled that “the snoops had been amateurish,” writes Mavin. Even more alarming, just weeks after spygate was exposed, the consultant who arranged the surveillance operation committed suicide under mysterious circumstances.
For any other bank, the scandal might have defined their legacy or even destroyed it. But for Credit Suisse, one of the biggest banks in the world, it was business as usual. How did it come to this? The bank, founded in Switzerland in 1856, “was deeply embedded in the global economy,” writes Mavin. “Its clients were billionaires and multinational corporations. It financed massive investments in infrastructure and provided loans to businesses and governments alike. It was too big to fail.”
And yet it did fail, in slow motion over many decades and countless controversies.
Bankers behaving badly isn’t unusual, but Credit Suisse “was the bank that most consistently courted trouble,” writes Mavin. “At other firms, there were years when everything seemed to work as it should, whereas Credit Suisse’s history reads like a long list of relentless wrongdoings.”
Even the spygate saga of 2019 wasn’t an isolated incident. An investigation by authorities found more evidence of other employees being followed by private detectives, as well as the ex of the CEO’s partner. They uncovered proof of seven separate spying programs, which several members of the Credit Suisse executive board were fully aware of. But “nothing was officially documented,” writes Mavin. Executives “communicated on personal WhatsApp accounts or in text messages that were out of reach of the regulators. In one case, an invoice was altered to conceal that it was related to the cost of hiring spies.”
The company’s downfall didn’t happen overnight. It had been years in the making, and in some ways was the inevitable result of a financial worldview that privileged secrecy over ethics. Much as Switzerland valued neutrality, particularly during World War I and II, their banks took this a step further, providing “a safe haven for anyone wanting to store their wealth away from the prying eyes of their enemies,” writes Mavin. That included kleptocrats and dictators, brutal strongmen and corrupt officials.
Most horrifically, they also served as middlemen for Nazis and fascists, both during and after World War II, taking the gold and other valuables stolen from Jews and cleansing it “of the Nazi taint,” writes Mavin. Radu Lecca, a leading Nazi officer in Romania, and Italian dictator Benito Mussolini both had accounts with Credit Suisse. One of the bank’s branches in New York reportedly helped Germans “conceal the actual ownership” of their deposits, writes Mavin.
There’s also damning evidence of how they responded to Jews trying to claim accounts in their name. Shortly after the war, a Polish Jewish Holocaust survivor named Estelle Sapir tried to retrieve money left by her late father, who’d died in a concentration camp, from a Credit Suisse branch in Geneva. She was told that she’d need to provide a death certificate.
“Estelle demanded of the bank clerk whom she should ask for a death certificate: Hitler, Himmler or Eichmann?” writes Mavin. “She ran, screaming, from the bank.”
Credit Suisse finally agreed to pay Sapir $500,000, but it didn’t happen until 1998. And even then, a spokesperson for the bank apologized “but also said Swiss bank secrecy laws prevented them from confirming or denying whether any of the incidents Sapir described had ever happened,” writes Mavin.
The mistreatment and secrecy from Credit Suisse wasn’t confined to outsiders. Even their own leaders could become victims. John Mack — nicknamed “Mack the Knife” for his “ruthless approach to cost-cutting,” writes Mavin — was hired as the company’s co-CEO in 2001, and despite bringing the bank back to profitability for the first time in years, he was fired in June 2004 in the most bizarre way possible.
“The bank had set up a whole shadow operation in a different building across the street from its Manhattan office,” writes Mavin. Mack had been going to work for weeks without realizing he was at a completely “staged” office. The real one was being rebuilt right next door.
In recent years, the scandals came fast and furious, with “many of the ailing bank’s dirtiest secrets . . . aired in public,” writes Mavin. In February 2022, a group called the Organized Crime and Corruption Reporting Project leaked information on 18,000 accounts from the Swiss bank, dubbed the “Suisse Secrets.” The documents showed that Credit Suisse had “banked dozens of unsavoury characters, including ‘the family of an Egyptian intelligence chief who oversaw the torture of terrorism suspects for the CIA; an Italian accused of laundering criminal funds; and a German executive who bribed Nigerian officials for telecoms contracts,’” writes Mavin.
Then in April 2023, new revelations surfaced that the bank hadn’t closed accounts with hundreds of Nazi officials, including one sentenced at Nuremberg, until just a few years earlier.
The end finally came for Credit Suisse in June 2023, when it was bought for $3.2 billion by Swiss bank UBS Group AG, in an all-stock deal brokered by the Swiss Financial Market Supervisory Authority (FINMA). But the exact reasons for Credit Suisse’s collapse are still open to debate. Aside from the rampant corruption and repeated scandals — from 2010 onward, “the bank paid fines of more than $15 billion in relation to misconduct by its own employees,” writes Mavin — it also had a spending problem.
According to FINMA, Credit Suisse had a too-generous approach to compensation “that failed to provide incentives for the right kind of behaviour,” writes Mavin. Employees were rewarded with huge bonuses regardless of whether the bank had a good or bad year.
Mavin argues, however, that the real reason for its demise may have been its attempts to grow too quickly beyond the Swiss borders. Credit Suisse “had become a monster,” he writes, “a high-octane global investment bank strapped onto a relatively small, secretive Swiss firm.”
