Julius Baer Told to Rehire Staffer Who Alleged Iran, Russia Ties
(Bloomberg) — A German court said Swiss lender Julius Baer Group Ltd. wrongly fired a staffer who claimed he was dismissed after flagging alleged sanctions violations linked to the onboarding of clients from Iran and Russia.
The bank’s Frankfurt arm failed to give a valid reason for dismissing the manager in early October, according to the details of a local labor court ruling from February, which were disclosed this week. The company said it’s appealing the judgment.
Julius Baer had argued in court the manager tried to steal business secrets and other employees declined to work under him because of various leadership failures. The staffer, whose name wasn’t disclosed, claimed his employer had punished him for signaling the sanctions violations.
While the judges didn’t assess the staffer’s claims of being punished for whistle blowing, they said Julius Baer failed to prove its own allegations and also neglected to try to mediate the conflict among its employees. They also didn’t believe the bank could, or wanted to, actually implement the restructuring it cited as another reason to let him go, according to the ruling.
The case “is in no way connected to any alleged breach of sanctions or anti-money laundering regulations,” the company said in an emailed statement, adding that it complies with all applicable regulations and requirements.
The manager raised concerns internally after he learned that Julius Baer Germany had taken on two wealth management clients from Iran and Russia in late 2024, according to people familiar with the matter who asked not to be identified discussing internal processes. Business with both countries has been sanctioned by the EU and the US for almost two decades.
The staffer subsequently brought the topic to the attention of the bank’s then-Germany head Axel Hoffmans, who initiated an internal audit, the people said. Julius Baer later changed the process and assigned more people to adverse media screening, which uses press reports to identify potential customer risks. In late November, the employee also warned German watchdog Bafin, they said. Bafin declined to comment.
Poor Selection
Julius Baer has made headlines in recent years over its poor selection of clients. The lender had to write off $700 million on loans to the 2023 collapsed Signa real estate conglomerate under disgraced Austrian tycoon Rene Benko. Last year, Julius Baer disclosed an additional legacy loan-loss charge of 130 million Swiss francs. In October, it was reported they had taken a €50 million hit tied to German property investor Birger Dehne.
The lender is still under investigation by Swiss regulator Finma over the risk-management lapses that led to the Benko losses and the departure of the then CEO. Its German counterpart Bafin said in 2024 that a special audit revealed that aspects of Julius Baer’s risk management, risk control and the institution’s risk-bearing capacity were deficient.
Since taking over as chief executive officer in January 2025, Stefan Bollinger has been on a bid to de-risk the bank and has made changes including running down risky positions and has introduced a new compensation framework that reduces the bonuses of relationship managers who generate revenue from high-risk business.
Julius Baer Group was also ordered to hand over 4.4 million Swiss francs ($5.6 million) including confiscated profits linked to alleged failures in money laundering controls over transactions that occurred between 2009 and 2019.
–With assistance from Noele Illien.
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