Credit Suisse has agreed to pay $196 million after admitting that it broke US securities laws when it provided cross-border brokerage and investment advisory services without registering with the Securities and Exchange Commission (SEC).
The Zurich-based bank will pay $82,170,990 in disgorgement, $64,340,024 in pre-judgment interest, and a $50 million penalty. It was found to have wilfully violated Section 15(a) of the Securities Exchange Act of 1934 and Section 203(a) of the Investment Advisers Act of 1940.
It provided cross-border securities services to thousands of US clients and collected fees totalling approximately $82 million without adhering to the registration provisions of the federal securities laws, according to the SEC.
From 2002, unregistered relationship managers travelled to the US to solicit clients, provide investment advice, and induce securities transactions.
Although the number of US client accounts decreased beginning in 2009 and the majority were closed or transferred by 2010, it took Credit Suisse until the middle of 2013 to completely exit the cross-border business as the bank continued to collect broker-dealer and investment adviser fees on some accounts.
At its height, the business amassed 8500 US client accounts that contained an average total of $5.6 billion in securities assets.
“The broker-dealer and investment adviser registration provisions are core protections for investors,” said Andrew Ceresney, director of the SEC’s enforcement division. “As Credit Suisse admitted as part of the settlement, its employees for many years failed to comply with these requirements, and the firm took far too long to achieve compliance.”
