Bank fined for unauthorised investments
Switzerland's second largest bank, Credit Suisse, has been ordered to pay damages to an electronic technology firm over unauthorised investments.
An arbitration panel of the United States’ Financial Industry Regulatory Authority awarded STMicroelectronics damages of $406 million (SFr472 million) following the purchase of auction rate securities by Credit Suisse Securities.
Geneva-based STMicroelectronics argued Credit Suisse carried out the unauthorised purchase of collateralised debt obligations and credit link notes instead of the federally guaranteed student loan securities that had been specifically mandated by the company for purchase.
Auction rate securities, long-term bonds that act like short-term debt, were previously considered good liquid investments but many buyers lost interest after the onset of the financial crisis.
Credit Suisse said it was disappointed by the ruling.
“We respectfully disagree with the arbitration panel’s award and we are reviewing our legal options,” said spokeswoman Corene Sullivan.
In a separate case last September the bank offered to buy back about $550 million in the securities and pay a $15 million fine as part of a series of US state and federal investigations in the $330 billion market that collapsed in February.
In compliance with the JTI standards
More: SWI swissinfo.ch certified by the Journalism Trust Initiative
You can find an overview of ongoing debates with our journalists here . Please join us!
If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.