Bloomberg Law
Oct. 5, 2020, 4:06 PM

Credit Suisse to Hand Over Video in Case Linked to Spy Claim (1)

Hugo Miller
Hugo Miller
Bloomberg News
Patrick Winters
Patrick Winters
Bloomberg News

Credit Suisse Group AG was reprimanded by a U.S. administrative law judge for failing to produce documents in a whistleblower case filed by a former executive who also accused the bank of spying on her.

Credit Suisse was ordered to hand over the documents in a case filed by Colleen Graham, a former employee who ran a software joint venture between Credit Suisse and Palantir Technologies Inc. in the U.S. The bank is contesting the allegations, which it describes as “frivolous.”

Graham’s case made headlines in December as the third spying allegation to rock the Swiss bank in almost as many months. She argues that she was pushed aside in retaliation for failing to sign off on aggressive accounting practices at the joint-venture before it was closed down.

Credit Suisse must now produce the documents related to the Trader Holistic Surveillance, or THS, product including a company video promoting the software, Judge Theresa Timlin said in a June order that hasn’t been previously reported.

“Credit Suisse’s failure to produce the requested documents cannot be excused,” according to Timlin, the U.S. Department of Labor administrative law judge overseeing the case.

The rulings are a partial victory for Graham, who had also worked for the bank in the U.S., in a case where she has previously faced setbacks. The judge dismissed Palantir and the Credit Suisse First Boston Next fund, a related entity, from the case in January.

“This matter is frivolous and has been repeatedly defeated in full, after a thorough review of all relevant materials by multiple finders of fact and law,” Credit Suisse said in a statement. “This current matter has also been significantly narrowed by rulings adverse to Ms. Graham on the merits in advance of a final hearing.”

Graham headed the venture, named Signac, which was designed to develop a more effective way of monitoring traders for potential criminal behavior. She accuses Credit Suisse of passing off the work of the venture as purely a result of the bank’s efforts, denying her credit and compensation, and then spying on her after she refused to sign off on what she believes was aggressive accounting on the project.

Read more: The ‘Striking Blond’ Joins Spies Haunting Credit Suisse

The ruling on the documents comes in a larger dispute over where Graham is seeking an equity stake in the Signac project.

“Signac was projected to be worth billions of dollars based almost entirely on the THS software it developed,” which remains extremely valuable given Palantir’s stock-market listing, Graham said in a statement. Palantir began trading on the New York Stock Exchange last week and is valued at about $15 billion.

“I had a 3% equity stake in Signac and I believe I am entitled to 3% of THS because it belongs to Signac, not Credit Suisse,” she said.

While Timlin will hold a full series of hearings in March, her ultimate decision may be appealed to the Department of Labor’s Administrative Review Board. Rulings from the five-member board could then be subject to a federal court appeal.

In the most recent dispute over evidence, the bank said it didn’t provide the documents because they included professional secrets that should be covered by a protective order, the judge wrote. Timlin rejected that defense and ruled that the THS documents and Graham’s personnel file be excluded from any future protective order.

The bank “did not have a pending motion for a protective order at the time it failed to produce the documents,” Timlin wrote.

The judge, however, agreed that Credit Suisse didn’t have to hand over personnel files held by Signac as it was a separate entity.

Credit Suisse’s Answers in Spy Scandal Raise More Questions: Q&A

In the first two spying cases, Credit Suisse admitted that one of its former star bankers and its human resources chief were shadowed by detectives on the streets of Zurich. The bank blamed the surveillance on its chief operating officer, who was fired and then-CEO Tidjane Thiam resigned shortly thereafter.

Credit Suisse has said it had conducted “thorough and comprehensive internal investigations into every one of Ms. Graham’s claims and found them to be entirely baseless.”

Graham said her refusal to approve how revenue from Signac would be booked prompted the bank to exclude her from meetings, threaten to fire her and deny her compensation, all to make Signac seem like a failure, her lawyer said in her 2018 complaint. Then the bank resorted to even more extreme measures, her lawyers said.

Credit Suisse then sent an “unidentified woman to follow, harass and intimidate Ms. Graham for three days” in and around New York, according to the complaint.

The video at the heart of the legal tussle was shown to shareholders and analysts at the bank’s December 2018 investor day and was referenced on the slides of a presentation by Lara Warner, the bank’s chief of compliance. The video isn’t included in an archived version of the event that is available on Credit Suisse’s website.

(Adds details on video in last paragraph)

--With assistance from Benjamin Penn.

To contact the reporters on this story:
Hugo Miller in Geneva at;
Patrick Winters in Zurich at

To contact the editors responsible for this story:
Anthony Aarons at

Christopher Elser, Dale Crofts

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