Banker to the famous faces charges over alleged siphoning of $10m from celebrities including Michael Schumacher.
A senior British banker who worked for the private banking arm of HSBC in Monaco has been arrested in connection with the disappearance of $10m (6.8m) from the accounts of rich and famous customers, including champion racing driver Michael Schumacher.
Stephen Troth was arrested by Monaco police last week and is being held in a local jail. He faces charges relating to the alleged siphoning off of the money from some of the bank’s highest profile customers.
As well as Michael Schumacher, who is one of the highest paid sportsmen in the world, cash is also understood to have disappeared from the account of Nigel Robertson, a 38-year-old businessman who co-founded Scoot.com.
Now based in Monaco, Mr Robertson has an estimated fortune of 75m and runs a sports marketing agency representing names including golfers Lee Westwood and Darren Clarke.
HSBC is understood to have paid compensation to all clients who have lost money.
Mr Troth worked for HSBC Republic, the British bank’s worldwide private banking arm, which targets high-earning celebrities offering “tailor-made services to suit their lifestyle”. It is understood that he was the highest-earning member of staff in the Monaco branch.
He is still listed on the bank’s website as the Monaco contact for the group’s “global media practice”, which invites “actors, composers, designers, musicians, sportspeople and writers as well as their agents, producers and directors” to take advantage of a “refined service”.
The affair is a huge embarrassment for HSBC. It has poured millions of pounds into building its Republic operation in an effort to win a significant share of the highly lucrative private banking business.
Secrecy and security are regarded as of paramount importance to its success, and the disappearance of millions of pounds is bound to undermine the bank’s reputation.
Mr Troth, who is in his early 40s, was arrested as he returned from a holiday. It is understood that he left his job at HSBC Republic at the end of July, shortly after the bank discovered that cash had gone missing. He told colleagues he wanted “to pursue other interests”.
A spokesman for HSBC said: “Mr Troth no longer works for us. The matter is in the hands of the police and we cannot comment. There is also the matter of client confidentiality here.”
The bank first became aware that something was amiss when several clients called in to query their account balances. An investigation is understood to have uncovered widespread discrepancies in the accounts of many of the bank’s most valued customers.
At first the losses were blamed on computer errors, but police are now investigating allegations that the money was transferred from those accounts into other numbered accounts linked to Mr Troth.
One account holder said: “It sounds ridiculous but when you’ve got so much money its very easy not to notice that a few thousand pounds are missing.”
Mr Troth was based in the same building where billionaire banker Edmund Safra died in a fire in December 1999. His death came weeks after he agreed the $10bn sale of his Republic banking groups to HSBC.
The ornate, turn of the century mansion overlooks Monte Carlo harbour and is a short stroll from the principality’s exclusive Casino and Hotel de Paris.
The six-storey building is frequented by many of Monaco’s most wealthy residents who value the bank’s discretion and advice. It boasts about 5,000 clients and is run by Gerard Cohen.
Stephen Troth had one of the best jobs in banking – living in Monte Carlo and rubbing shoulders with some of the principality’s most successful and flamboyant businessmen.
He is well known to many members of the so-called “Monaco Mob” of rich and mostly young entrepreneurs who trade the London market from their Riviera bases. Most are tax exiles who flit in and out of Britain completing deals.
Mr Troth was highly regarded by HSBC Republic for his ability to attract wealthy account holders and was spearheading a drive to pull in more wealthy celebrity clients. HSBC’s marketing material for the new venture says: “It concerns personalities in the film entertainment, music, publishing and sports industries and has been poorly served by the financial services institutions worldwide. Until now!”
He is understood to have spent his career in banking and had worked for Republic for more than five years before his abrupt departure in July.
He is described as unassuming and mild mannered, and his arrest was a shock to those acquainted with him. One businessman who knows him socially said: “He’s quiet, wears glasses and looks like a boring old banker in a grey suit and a tie. He was very discreet.”
In his private life he enjoys the luxuries that his position as a top private banker has provided. Clients frequently recommended him to wealthy friends. “The number of times people enthused about him was amazing,” said one.