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UBS, Credit Suisse Revamp Legal Teams in Archegos Aftermath (3)

April 27, 2021, 5:45 PMUpdated: April 27, 2021, 10:34 PM

Swiss financial services giants UBS Group AG and Credit Suisse Group AG have shaken up their in-house legal and compliance staffs in the wake of the collapse of family office Archegos Capital Management LP.

UBS announced Tuesday its hire of Rio Tinto PLC chief legal officer and external affairs executive Barbara Levi as its new group general counsel. Levi will replace longtime legal chief Markus Diethelm, who will retire as of Nov. 1 but remain an adviser to UBS through 2022, the Zurich-based bank said.

Another Zurich-based financial giant, Credit Suisse, said Monday that it had appointed Renato Costantini, head of legal products and wealth planning, to be general counsel for its Swiss unit. Costantini succeeds Thomas Grotzer, who on April 6 became interim global head of compliance at Credit Suisse.

Credit Suisse has disclosed losing roughly $5.5 billion from the abrupt demise of New York-based Archegos, until recently a relatively unknown family office run by billionaire trader Bill Hwang. UBS’ losses from the Archegos affair are estimated at $861 million, according to Bloomberg News.

In an effort to contain the financial fallout from Archegos, Credit Suisse raised $2 billion from investors last week to shore up its capital reserves. Switzerland’s second-largest bank has also changed some of its business practices and parted ways with several executives as a result of its exposure to Archegos.

Legal Group Changes

Credit Suisse, which saw former managing director and global head of regulatory affairs Saumya Bhavsar decamp last year to become general counsel of digital currency network the Diem Association, didn’t respond to a request for comment about whether it has made other legal and compliance changes.

In October, Credit Suisse hired Cadwalader, Wickersham & Taft special counsel Danielle Katz as a director in Washington and promoted Crystal Lalime to general counsel for investment banking and capital markets, succeeding Natalia Nicolaidis, now a founder and partner at legal consulting firm Dynamic Counsel.

Lalime, who is based in New York and previously served as general counsel for global markets and Credit Suisse’s U.S. intermediate holding company, was sent a letter earlier this month from Sen. Sherrod Brown (D-Ohio), chairman of the Senate Banking Committee, seeking information about the bank’s ties to Archegos.

Grotzer, who once worked at UBS, stepped into Credit Suisse’s top compliance role earlier this month as the bank began taking Archegos-related writedowns.

Fox Business reported earlier this month that Carmen Lawrence, a government investigations and securities litigation partner at King & Spalding in New York, had been retained by Archegos along with crisis communications expert Michael Sitrick.

Sitrick told Bloomberg Law that Lawrence is advising Archegos, while Hwang has hired Gibbons litigation co-chair Lawrence Lustberg and partner Thomas Valen. Sitrick also confirmed that Archegos had its own in-house legal and compliance staff.

David Eun, a Harvard Law School graduate and longtime executive at Samsung Electronics Co. Ltd., was reportedly hired by Archegos as an executive vice chairman in January. That same month Archegos promoted fellow HLS graduate Steven Chen to director. Chen, whose LinkedIn profile shows he joined Archegos in 2018 after spending a summer at Kirkland & Ellis, didn’t respond to a request for comment.

New UBS Roles

At UBS, Levi will take over a top legal role held by Diethelm, who began his career at leading Swiss law firm Bär & Karrer before going on to work at Paul, Weiss, Rifkind, Wharton & Garrison, Shearman & Sterling, and Gibson, Dunn & Crutcher.

Diethelm, hired by UBS in 2008 to succeed Peter Kurer as group general counsel, has led the bank through several legal entanglements during his 13 years as legal chief.

Levi, his successor, will leave Rio Tinto in October, according to a statement from the Anglo-Australian mining company, which said it is now searching for her successor.

“Barbara has made a significant contribution during her time with Rio Tinto and we will be saddened to see her leave,” said CEO Jakob Stausholm.

Levi, who is based in London, was promoted to chief legal, governance, and ethics officer for Rio Tinto in January. She joined the company last year from Novartis AG, a pharmaceutical giant where she was group legal head for mergers, acquisitions, and strategic transactions. Novartis hired a new legal chief in March.

UBS, like Credit Suisse, has also made other changes to its legal group, some of which predate the bank’s involvement with Archegos.

Michael Crowl, a New York-based group managing director and general counsel for the global wealth management and Americas arms at UBS, retired March 31. Crowl didn’t respond to a request for comment about his exit, which he recently noted on his LinkedIn profile. He joined UBS in 2014 from British banking rival Barclays PLC.

Bloomberg Law obtained a memo, the contents of which were confirmed by UBS spokeswoman Erica Chase, showing that Crowl formally relinquished his various general counsel duties Nov. 1. As of that date, Crowl ceded his Americas legal chief role to UBS transactions and disclosure counsel David Kelly.

Douglas Hollowell, managing director and U.S. general counsel for global wealth management, has replaced Kelly as deputy general counsel for the Americas at UBS. Karen Yen, a former head of global litigation at the bank, has taken over Crowl’s top general counsel role for global wealth management.

Diethelm, the now outgoing legal chief at UBS, took over from Yen last year as interim head of global litigation. In its announcement Tuesday, UBS said Diethelm will continue to have “responsibility for select legacy litigation cases” while he remains a senior adviser to the bank through 2022.

(Includes comment from Archegos in 11th paragraph.)

To contact the reporter on this story: Brian Baxter in New York at bbaxter@bloomberglaw.com

To contact the editor responsible for this story: Chris Opfer at copfer@bloomberglaw.com

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