Swiss Bank Ordered to Rehire Employee Fired Over Allegations of Ties to Iran and Russia

German Court Rules in Favor of Ex-Julius Baer Manager

A German labor court has ruled that Swiss lender Julius Baer Group Ltd. wrongly fired a staff member who claimed to have been dismissed after flagging alleged sanctions violations linked to the onboarding of clients from Iran and Russia. The ruling, which was disclosed this week, states that the bank's Frankfurt arm failed to provide a valid reason for dismissing the manager in early October.

According to the court's details, Julius Baer had argued in court that the manager tried to steal business secrets and that other employees declined to work under him due to various leadership failures. However, the court did not assess the staffer's claims of being punished for whistle blowing. Instead, the judges found that Julius Baer failed to prove its own allegations and neglected to try to mediate the conflict among its employees.

The court also questioned the bank's ability to implement the restructuring it cited as another reason for letting the manager go. The case is "in no way connected to any alleged breach of sanctions or anti-money laundering regulations," according to the bank's statement. Julius Baer claims to comply with all applicable regulations and requirements.

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The manager had raised concerns internally after learning that Julius Baer Germany had taken on two wealth management clients from Iran and Russia in late 2024. 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. Julius Baer later changed its process and assigned more people to adverse media screening.

Julius Baer's Recent Challenges

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 and a separate €50 million hit tied to German property investor Birger Dehne.

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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 introducing a new compensation framework that reduces the bonuses of relationship managers who generate revenue from high-risk business.

As a result of the investigation, Julius Baer was ordered to hand over 4.4 million Swiss francs ($5.6 million), including confiscated profits linked to alleged failures in money laundering controls.