The enforcement procedure by the Swiss regulator against Julius Baer may, indirectly, hit bankers where it hurts most: in their pockets. The bank plans to withhold bonuses, according to media reports.
The Swiss banking regulator Finma on Thursday had issued a statement on the enforcement procedure against Zurich-based private bank Julius Baer.
Among other measures, the bank currently is barred from making acquisitions, as reported by finews.com. Also, to make sure that measures are being implemented properly, Finma has delegated a supervisor to Zurich.
Bonus Ban for Compliance Staff
After the damning verdict, the bank also took swift action, according to a report by «Sonntagszeitung» (behind paywall). Julius Baer won’t pay out the variable compensation components to a dozen employees responsible for the deficiencies in compliance, the Sunday paper said, citing sources. The ban may also affect payments to ex-Chief Executives Boris Collardi and Bernhard Hodler, the paper added.
Another newspaper, «Luzerner Zeitung», however suggested that the ban may not hit Collardi because all the deferred bonuses had lapsed when he joined rival Pictet.
Collardi and Hodler
Still, Finma will look into the liability and behavior of individual members of staff at Julius Baer. The investigation covered the business years of 2009 through 2018 and uncovered serious compliance issues.
As such, the probe covered a period that coincided with the years Collardi was in charge (who departed at the end of 2017). Hodler, his successor, had previously been the head of risk.
