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Securities violations Credit Suisse to pay $90m over asset disclosures

Credit Suisse admitted that pressure from managers had led to the securities violations


Swiss bank Credit Suisse has agreed to pay a $90 million (CHF88 million) penalty to settle US Securities and Exchange Commission (SEC) claims that it didn’t adequately disclose what drove decisions to reclassify assets in its private bank.

From the fourth quarter of 2011 to 2012, decisions to label some client funds as assets under management were influenced by efforts to meet business targets, the regulator said on Wednesday.

The moves contradicted the Zurich-based bank’s disclosures that it followed “established rules and policies” in determining how it labelled assets, the SEC said.

Former Chief Operating Officer Rolf Bögli, who didn’t admit or deny the findings, agreed to pay an $80,000 penalty for allegedly pushing employees to reclassify funds, the agency said.

Credit Suisse admitted that pressure from managers had led to the securities violations.

“Credit Suisse conveyed to the investing community that it followed a structured process for recognising net new assets when, in fact, the process was reverse-engineered to meet targets,” Andrew J. Ceresney, head of the SEC’s enforcement division, said in a statement.

‘No harm’

More than $1 billion of a private wealth client’s assets were reclassified in the fourth quarter of 2011 as being managed by the bank, which generally generates higher fees, than just guarded at the bank, according to the SEC.

Another customer had more than $4 billion reclassified as managed assets in the first quarter of 2012, which constituted more than 75% of net new money reported by Credit Suisse’s wealth management business that quarter.

“Credit Suisse has agreed to a $90 million settlement with the SEC relating to the bank’s disclosure of its Net New Assets (NNA) recognition practices,” Nicole Sharp, a spokeswoman for the bank, said in a statement.

“We cooperated with the SEC’s inquiry and have undertaken appropriate internal remedial efforts. It is important to note that there are no allegations of intentional misconduct or that NNA numbers were incorrectly reported. Credit Suisse clients were not harmed.” and agencies


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