Apparently, firing half a dozen executives including its head of risk management (Lara Warner, also one of the most high-ranking women in the global financial services industry) hasn’t done enough to quiet shareholders’ demands for change atop Credit Suisse, the Swiss banking giant that reported a $4.7 billion loss from the collapse of Archegos Capital Management, with billions of losses likely to follow from the collapse for Greensill.
As CEO Thomas Gottstein clings to his position, the Wall Street Journal reported Monday that John Dabbs and Ryan Nelson will immediately step down as co-heads of prime services, the prime-brokerage unit responsible for extending all that credit to Archegos (as a reminder, for an explainer on how Archegos built its $100 billion massively leveraged position, click here).
Bloomberg added that Roger Anerella was appointed interim head of prime services, while Doug Crofton was made head of Americas cash with responsibility for execution and advisory sales. Stuart McGuire has been put in a similar role for EMEA. Reps from CS declined to comment.
The two executives have agreed to stay on through mid-May to help with the transition.
According to the internal memo cited by WSJ, several other employees in the equity and risk-management shops also left.
Credit Suisse was saddled with heavy losses after Morgan Stanley and Goldman Sachs broke ranks to dump massive blocks of shares purchased as part of Archegos founder Bill Hwang’s massive concentrated bets on tech and media stocks including ViacomCBS and Farfetch. When the selling finally ended, Credit Suisse was left with the heftiest losses of any of the prime brokers that lent to Archegos.
Gottstein said “serious lessons will be learned,” perhaps reassuring shareholders who appear to want Gottstein to remain in place, if only to prevent more embarrassing churn at the top.
In fact, the latest round of ousters could be construed as a positive for everybody left standing, including Gottstein, as the per capita bonus pool just got that much bigger.