A former Julius Baer Group employee’s effort to discredit the 121-year-old bank by handing stolen client data to WikiLeaks has put Swiss banking secrecy back in the spotlight.
Rudolf Elmer, who worked for Zurich-based Baer’s Cayman Islands unit until December 2002, says he wants to expose tax evasion through the use of offshore accounts. He was detained by Swiss prosecutors after handing over data on about 2,000 cross-border accounts to WikiLeaks’ founder Julian Assange on Jan. 17.
“WikiLeaks is changing the dynamic because it’s a platform with a worldwide audience,” said Teodoro Cocca, professor of wealth management at Johannes Kepler University in Linz, Austria. “The reputational damage for Swiss banking could be much broader than someone selling data to a tax authority.”
The questions surrounding Baer follow attacks on secrecy in Swiss banking by U.S., French and German officials. As clients reassess the benefits of cross-border accounts, Baer must decide whether to build branch networks in Europe and Asia to compete with larger rivals such as UBS and Credit Suisse Group.
Elmer, who is in a Zurich prison while the city’s prosecutors investigate whether he broke banking secrecy laws, can’t comment, according to his lawyer Ganden Tethong Blattner.
The involvement of WikiLeaks, after informants helped authorities pursue tax-evasion cases involving UBS, HSBC Holdings’s Geneva private bank and Liechtenstein’s LGT Group, is an escalation of the stolen data issue, according to Konrad Hummler, managing partner of Wegelin & Co., Switzerland’s oldest private bank.
Elmer, who worked for Baer for 15 years, was found guilty in a separate case on Jan. 19 of making a death threat against a bank employee and of breaking Switzerland’s client-secrecy laws.
Elmer “is a whistleblower and he has important things to say,” Assange told reporters in London on Jan. 17.
He said the data will take at least two weeks to check and disseminate. WikiLeaks was not immediately available for comment after being e-mailed by Bloomberg News.