Actions by the former Credit Suisse are still haunting UBS since the acquisition of its former banking rival nearly three years ago.<\/p>\n
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This week, a Financial Industry Regulatory Authority panel handed down a nearly $9 million dollar arbitration award to a former Credit Suisse broker who contends he was unfairly blamed for losses from the collapse of the massive family office Archegos Capital Management.<\/p>\n
Paul Reid Galietto, who was at Credit Suisse from 2017 to 2021, was awarded just over $8.7 million in compensatory damages over the claims, including wrongful cancellation of payments he contends were owed him and false blame. UBS, which acquired Credit Suisse in 2023<\/a>, was also named as a respondent in the action.\u00a0<\/p>\n READ MORE: Credit Suisse signals deeper loss as charges mount, clients pull money<\/a><\/p>\n Blamed for losses from the collapse of Archegos Capital Management<\/p>\n Galietto’s lawyer, Steven Eckhaus of Harris St. Laurent & Wechsler in New York, said Credit Suisse had denied Galietto compensation after trying to blame him for losses the firm had suffered from the collapse of Archegos, a family office that had one time had more than $36 billion under management. Archegos fell apart in 2021 amid a scandal, and its founder, Bill Hwang, was later sentenced to 18 years in prison.<\/p>\n Credit Suisse lost more than $5.5 billion as a result<\/a>, and the collapse of Archegos was one of several factors that eventually drove it into the arms of UBS. Eckhaus said Credit Suisse’s board tried to blame Galietto, who had worked out of the firm’s New York offices.<\/p>\n “They fired him because the board of directors wanted to pin the blame on him rather than on themselves,” Eckhaus said.<\/p>\n Before parting ways with Galietto, Credit Suisse enlisted the outside law firm Paul Weiss to conduct a third-party investigation of his conduct. Eckhaus noted that the FINRA arbitration panel questioned whether that report was truly independent in nature.<\/p>\n “We find that [Credit Suisse] acted in bad faith when they relied on the Paul Weiss Investigative Report that was not independently produced to cancel [Galieto’s] deferred compensation,” according to the report.<\/p>\n “It was all set up to try to blame Paul for problems that had nothing to do with Paul’s performance,” Eckhaus said.<\/p>\n Paul Weiss did not respond to a request for comment. UBS declined to comment.<\/p>\n