Credit Suisse banker removed from role for unauthorised messages to clients
  • 14.06.2022
  • 955 views
Action taken as regulators target industry’s use of private applications to conduct business
A senior Credit Suisse investment banker was removed from his position earlier this year after he was found to have used unapproved messaging applications with clients, according to people with knowledge of the matter. Anthony Kontoleon, known as “AK” to colleagues, was Credit Suisse’s global head of equity capital markets syndicate in New York and left his position in April. He is set to depart the bank, where he has worked for 28 years. The action taken by Credit Suisse comes amid a US government investigation of record-keeping practices across Wall Street. Credit Suisse decided to remove Kontoleon from his role after an audit of several dozen of its bankers found that he had used personal messaging applications to communicate with clients, the people added. The audit did not find that Kontoleon had shared any inappropriate information. In a memo to staff in April, Credit Suisse’s global head of equity and debt capital markets, David Hermer, said Kontoleon had informed him that he would be leaving “to pursue other opportunities”.
Kontoleon declined to comment and referred any questions to the bank. Credit Suisse declined to comment. Kontoleon’s exit follows a string of scandals at Credit Suisse in the past two years, including a $5.5bn trading loss from lending to family office Archegos Capital Management and the bank’s recommendation that clients invest in funds tied to Greensill Capital, a supply chain finance company that later collapsed. Credit Suisse in March disclosed that it was co-operating with a Securities and Exchange Commission investigation into its US subsidiary’s compliance with record-keeping requirements related to business communications sent over unapproved messaging channels.
Credit Suisse’s management hoped that a high-profile departure such as that of Kontoleon would be seen by US regulators as a sign that the bank was taking the matter seriously, said one of the people with knowledge of the matter. JPMorgan Chase in December agreed to pay $200mn in fines to the SEC and the Commodity Futures Trading Commission for failing to keep records of staff communications on personal devices, in an action that spooked many Wall Street banks.
At Credit Suisse, Kontoleon connected private companies with public market investors, and worked with public companies when they wanted to do block trades or secondary transactions. He worked on some of the bank’s biggest stock market listings, including initial public offerings for US ride-hailing company Lyft, Chinese ecommerce giant Alibaba and Google. His departure underscores the extent to which a record-keeping investigation on Wall Street is creating anxiety inside large banks, where text messaging apps such as WhatsApp have become commonplace. Following the JPMorgan fine, other lenders including HSBC and Goldman Sachs disclosed that US regulators were looking into whether their bankers improperly used personal messaging apps to do business. Syndicate desks, such as the one where Kontoleon worked, are attracted to text messaging for quick and easy communication because they are in constant dialogue with hedge fund and asset management clients about stock sales and market activity.
The practice became more common when bankers started working from home during the Covid-19 crisis. “During the pandemic, people got so accustomed to just texting outside of the controlled environment,” said one senior Wall Street banker. Bankers at companies including JPMorgan and UBS have started to use an app called Movius on their phones, which records all calls and logs text messaging. In a further sign of Credit Suisse’s worries over the record-keeping issue, the bank in December asked its employees to let it access their personal mobile phones and other devices if they used them to communicate with clients or colleagues.
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