Credit Suisse has agreed to pay a $196.5m fine to settle charges that it broke US federal securities laws by providing cross-border brokerage and investment advisory services to US clients without first registering with the Securities and Exchange Commission.
The Swiss bank said earlier this month that it had set aside SFr175m to cover the cost of the settlement, and, according to the SEC, also admitted wrongdoing in order to settle the charges.
Credit Suisse said that it was “pleased” to have resolved the investigation.
According to the SEC, from 2002, Credit Suisse’s relationship managers travelled to the US to solicit clients, provide investment advice, and induce securities transactions, without being registered to provide such services.
Between 2002 and 2013, when Credit Suisse fully exited the business, the securities accounts involved contained an average total of $5.6bn. Credit Suisse collected fees worth approximately $82m from the business.
“Credit Suisse was well aware of the steps that a firm needs to take to legally conduct advisory or brokerage business with US clients,” said Scott Friestad, associate director in the SEC’s division of enforcement. “Credit Suisse failed to effectively implement internal controls designed to keep its employees from crossing the line and being non-compliant with the federal securities laws.”
Credit Suisse is also one of around 14 Swiss banks caught up in a separate investigation by the US Department of Justice into tax evasion by American citizens.
The bank set aside SFr295m in 2011 to deal with this probe, but said today that “while we continue to work to resolve this matter, the timing and outcome remain uncertain”.
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