Credit Suisse may replace top lawyer as legal battles mount

April 24, 2022, 2:18 PM UTC
This illustration photo shows a sign with the logo of Switzerland's second largest bank "Credit Suisse" at their headquarters in Zurich on March 23.

Credit Suisse Group AG is considering replacing its top lawyer Romeo Cerutti, as the troubled lender struggles to resolve legacy legal issues and focus on looming court battles, people familiar with the matter said.

The Zurich-based lender is considering hiring former UBS Group AG general counsel Markus Diethelm, the people said. Diethelm is fresh from exiting as chief legal counsel at the Zurich rival, including the negotiations that led to a fine for tax evasion in France. The bank may also replace Chief Financial Officer David Mathers and Helman Sitohang, who is the chief executive for the Asia Pacific region, according to a report by the Neue Zuercher Zeitung’s Sunday edition. NZZ also earlier reported the potential legal counsel change. 

Credit Suisse is likely seeking a refresh of its legal team and other long-standing executives on its management team after the scandals linked to the collapse of Greensill Capital and Archegos Capital Management, in the past year, cost the bank billions of dollars and led to the departure of more than half of the executive management team.

“Senior management under the leadership of the Group CEO together with the Board of Directors is regularly discussing succession plans and is reviewing senior appointments for certain positions, including for certain legal entities, regions and the Executive Board. However, no board decisions have been taken and we will communicate at the appropriate time,” Dominik von Arx, a spokesperson for Credit Suisse, said in an emailed statement.

The bank is also looking for a new chief executive for its U.S. legal entity, people familiar with that search told Bloomberg earlier. 

Credit Suisse is facing a difficult transition year, likely to be marked by restructuring and further legal battles. Last week, the bank set aside another 600 million franc ($627 million) in legal provisions, including for a verdict of potentially more than $550 million in a Bermuda case related to former private banker and convicted fraudster Patrice Lescaudron. As a result of those provisions and losses related to the war in Ukraine, Credit Suisse said it will post a first-quarter loss on April 27.

Cerutti joined in 2006 as general counsel for private banking and as a global co-head of compliance for the whole bank. He became general counsel in 2009 and has presided over the handling of legal issues the bank has faced in the last decade. Mathers and Sitohang have both been in their roles for at least a decade. Sitohang saw his region dismantled as part of a restructuring last year that merged the various Asian businesses into global units, which left him with a regional responsibility but no business division to run. 

Diethelm officially stepped down from the role at UBS in November 2021 but stayed on as a senior adviser into this year to help the bank navigate its ongoing legal battle in a tax evasion case in France. Diethelm’s team took the decision in 2017 to spurn a French settlement demand and push the case to trial, ending in the record fine and a protracted appeal. UBS is still appealing the case, including a 1.8 billion euro ($1.9 billion) penalty and guilty verdict.

UBS declined to comment. Diethelm didn’t respond to an emailed request for comment on Sunday.

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