By John Letzing and David Enrich
ZURICH--After seven years at the helm of Credit Suisse Group AG,
outlasting the financial crisis and most of his fellow bank chief
executives, Brady Dougan is known as a survivor.
He nearly lost that reputation.
As a yearslong U.S. tax-evasion investigation case was dragging
on in recent months, board members at the giant Swiss bank mulled
actions that likely would have cost Mr. Dougan his job, according
to people familiar with the deliberations.
To expedite a legal settlement, Credit Suisse officials
considered asking the Swiss government to implement an emergency
law enabling the lender to sidestep bank-secrecy rules and hand
over the names of certain clients to U.S. authorities, these people
said. Board members believed such a request would mean Mr. Dougan
would have to resign to appease Swiss politicians--something that
seemed like a distinct possibility inside the bank until recently,
they said.
Ultimately, Mr. Dougan, a 54-year-old Illinois native, dodged
the bullet. Credit Suisse on Monday pleaded guilty in a Virginia
court to aiding tax evasion and agreed to pay $2.6 billion to
settle the case. Mr. Dougan remains in his job.
The turning point for Mr. Dougan apparently came earlier this
month, when Switzerland's finance minister, Eveline
Widmer-Schlumpf, flew to the U.S. to meet with U.S. Attorney
General Eric Holder to discuss the investigation, said people
familiar with the matter. After that meeting, the U.S. dropped its
demands that Credit Suisse disclose its clients' names, these
people said.
That allowed Credit Suisse to avoid having to appeal for
emergency help to the Swiss Parliament, where some lawmakers have
been calling for Mr. Dougan's head.
Nonetheless, as the size and severity of the tax-evasion
settlement came into focus, Credit Suisse board members discussed
whether they should make senior-management changes, according to
people familiar with the board's discussions.
They ultimately concluded that Mr. Dougan, who joined a Credit
Suisse predecessor in 1990, wasn't responsible for the criminal
activity and that replacing him now would be too disruptive to
justify any potential political benefits, these people said. Plus,
some directors reckoned, it would be difficult to quickly find a
suitable candidate to take over the country's second-biggest bank,
one person said.
A Credit Suisse spokesman disputed the notion that board members
discussed replacing Mr. Dougan, and said "the board backs the
CEO."
On Tuesday, Mr. Dougan shrugged off questions during a
conference call with analysts and reporters about whether he had
felt pressured to resign. He said only that he had never considered
stepping aside, adding that he's "committed to Credit Suisse."
Mr. Dougan is known as a soft-spoken Midwesterner who fits
nicely into Zurich's relatively low-key financial community. He
doesn't come off as overly slick. In a city of flashy cars, Mr.
Dougan drives a Toyota Prius.
But he has sometimes rankled Swiss investors and politicians. He
has faced criticism from local shareholders for failing to address
them in German at the bank's annual meetings.
The biggest fracas came in June 2012. The Swiss National Bank
stunned Credit Suisse executives by publicly questioning whether
the bank was adequately capitalized. The comments, in the central
bank's financial-stability report, knocked billions of dollars off
Credit Suisse's market value.
Mr. Dougan angrily fired back, disputing the central bank's
calculations and telling a Swiss newspaper that he found the SNB's
position "difficult to comprehend." The extraordinary public spat
triggered investor and media speculation about Mr. Dougan's grasp
on the job.
Nearly two years later, though, Mr. Dougan remains CEO. "He is
quite the survivor," said Canaccord analyst Arun Melmane.
Write to John Letzing at john.letzing@wsj.com and David Enrich
at david.enrich@wsj.com
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