Credit Suisse fined for mispricing scam
Swiss bank Credit Suisse has been fined £5.6 million (SFr11.5 million) by the British authorities after traders deliberately over-priced the value of assets.
The deception resulted in the bank having to write down $2.85 billion (SFr3.1 billion) in February, just days after announcing its 2007 results.
A Credit Suisse investigation found that a “handful” of traders had intentionally mispriced certain asset-backed securities to make their positions look healthier than they were. The bank said it had disciplined offenders and had taken remedial action.
The Financial Services Authority (FSA) said it had fined the bank’s British operations for failing to have the “adequate systems and controls” in place and for failing to report their concerns to the financial authorities in a timely manner.
It added that the sudden and unexpected timing of the writedowns “had the potential to undermine market confidence”.
The fine is the fourth-largest ever levied by the FSA, but was discounted because Credit Suisse had offered full cooperation.
“This incident was unacceptable to me and the executive board,” Credit Suisse chief executive Brady Dougan said in a statement.
“Our overall control framework remains sound and we have taken actions to implement a remediation programme to address the findings of our internal review.”
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