Two former chief executives of private bank Julius Baer, Boris Collardi and Bernhard Hodler, have been formally reprimanded by Switzerland’s market regulator for their role in connection with a sweeping South American money-laundering scandal.
Finma said on Thursday that it had concluded a long-running probe into four former employees of Julius Baer. It focused on almost a decade of “serious shortcomings” in compliance measures over the handling of dirty money from Venezuela’s state-owned oil company Petróleos de Venezuela (PDVSA).
The hard-charging Mr Collardi was appointed chief executive of Julius Baer in May 2009 — its youngest ever boss — and oversaw a breakneck expansion of the bank. It more than doubled its assets under management during his tenure, before his unexpected resignation in November 2017.
He was succeeded by Mr Hodler, the bank’s former head of compliance, who acted as temporary chief executive for 18 months while it looked for a more permanent successor.
Finma said in a statement that its investigation had focused on four individuals. It has sent formal written reprimands to two of them and is deciding on more serious enforcement action against a third. A fourth has been let off without sanction, having agreed to retire from financial services.
As is commonly the case in regulatory actions in privacy-conscious Switzerland, Finma did not name any of those concerned.
Three individuals familiar with the decision told the Financial Times Mr Collardi and Mr Hodler were the two executives to receive a written reprimand.
A spokesperson for Mr Collardi said he was “pleased . . . that the Finma review in the Julius Baer matter has been completed”. Mr Collardi accepted the reprimand that had been issued, the person said. “The key is that this decision brings this matter to a close.”
A spokesperson for Mr Hodler said the former chief executive “took note” of the reprimand.
In the years since Mr Collardi and Mr Hodler’s time at Julius Baer, the lender has faced a slew of investigations and enforcement actions, raising serious questions over the checks and balances in place as it took on tens of billions in new money. Julius Baer currently manages SFr402bn ($454bn) in assets, making it Switzerland’s third-largest bank and one of the world’s largest depositories for the super-rich.
Since taking over the helm of Julius Baer in mid-2019, current chief executive Philipp Rickenbacher has pledged to rigorously clean up the bank’s client base.
A case-by-case review of all the lender’s accounts — internally dubbed “project Atlas” — was completed just over a year ago at a cost of SFr87m. The review was initiated by Mr Collardi before he left. A separate internal review into Mr Collardi and Mr Hodler’s tenure meanwhile resulted in a decision in October to withhold millions in deferred pay owed to its former bosses.
Finma’s institutional probe against the bank over accounts linked to PDVSA — and a parallel investigation into corruption relating to the governing body of world football, Fifa — was concluded last February. An unexpectedly harsh rebuke was issued, with an indefinite ban on acquisitions, which the bank is hopeful will be lifted soon, and the installation of a Finma-appointed independent auditor to monitor corrective action at the bank’s Zurich headquarters.
Subsequently, Finma shifted its work to focus on rule-breaking by specific former employees.
Mr Collardi is now a partner at Julius Baer’s Geneva-based rival Pictet.
Pictet said it had taken note of the Finma decision and had “full confidence” in Mr Collardi’s ongoing work for the group.
Julius Baer declined to comment on actions taken against former employees. The bank is due to report its full-year results on February 1.
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