A German labor court has ruled that Julius Baer Group’s Frankfurt arm wrongly dismissed a manager who had raised internal concerns about alleged sanctions violations linked to the onboarding of clients from Iran and Russia, Bloomberg reported Thursday. 

The bank failed to give a valid reason for firing the staffer in early October, according to a February ruling whose details were disclosed this week, Bloomberg said. Julius Baer had argued in court that the manager tried to steal business secrets and that other employees declined to work under him because of leadership failures. The staffer, whose name was not disclosed, said he had been punished for flagging the sanctions concerns.

The judges did not assess the staffer’s whistleblowing claim, but said Julius Baer failed to prove its own allegations and had not attempted to mediate the conflict among its employees, Bloomberg reported. The court also did not believe the bank could, or wanted to, carry out the restructuring it cited as a further reason for the dismissal, according to the ruling.

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, people familiar with the matter told Bloomberg. Business with both countries has been sanctioned by the European Union and the United States for almost two decades.

According to the sources, the staffer escalated the issue to Axel Hoffmans, then head of Julius Baer’s German business, who initiated an internal audit, Bloomberg said. The bank later changed the process and assigned more people to adverse media screening, which uses press reports to identify potential customer risks, the people told the news outlet. 

In late November, the employee also notified German financial regulator BaFin, the people said. BaFin declined to comment, according to Bloomberg.

The case “is in no way connected to any alleged breach of sanctions or anti-money-laundering regulations,” Julius Baer said in an emailed statement to Bloomberg, adding that it complies with all applicable regulations and requirements The Swiss lender is appealing the judgment, the report said.