(Bloomberg News) A former Julius Baer Group Ltd. employee's effort to discredit the 121-year-old bank by handing stolen client data to WikiLeaks has put Swiss banking secrecy back in the spotlight.

Rudolf Elmer, who worked for Zurich-based Baer's Cayman Islands unit until December 2002, says he wants to expose tax evasion through the use of offshore accounts. He was detained by Swiss prosecutors after handing over data on about 2,000 cross-border accounts to WikiLeaks' founder Julian Assange on Jan. 17.

"WikiLeaks is changing the dynamic because it's a platform with a worldwide audience," said Teodoro Cocca, professor of wealth management at Johannes Kepler University in Linz, Austria. "The reputational damage for Swiss banking could be much broader than someone selling data to a tax authority."

The questions surrounding Baer follow attacks on secrecy in Swiss banking by U.S., French and German officials. As clients reassess the benefits of cross-border accounts, Baer must decide whether to build branch networks in Europe and Asia to compete with larger rivals such as UBS AG and Credit Suisse Group AG.

"We have no reason to believe that Elmer has anything new," according to Baer spokesman Jan Vonder Muehll. Boris Collardi, who became chief executive officer in May 2009, told Handelszeitung in September that since his arrival, "our motto is that we only accept taxed money."

Elmer, who is in a Zurich prison while the city's prosecutors investigate whether he broke banking secrecy laws, can't comment, according to his lawyer Ganden Tethong Blattner.

Earnings Outlook

Baer is scheduled to report results on Feb. 7. Full-year net income probably rose to 454 million Swiss francs ($479 million) from 389 million francs in 2009, according to the mean estimate of nine analysts surveyed by Bloomberg.

The company's plan to double the number of employees in Asia within five years is costly and raises questions about the profitability of such an expansion, said Peter Thorne, a London-based analyst at Helvea.

The involvement of WikiLeaks, after informants helped authorities pursue tax-evasion cases involving UBS, HSBC Holdings Plc's Geneva private bank and Liechtenstein's LGT Group, is an escalation of the stolen data issue, according to Konrad Hummler, managing partner of Wegelin & Co., Switzerland's oldest private bank.

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