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CSFB handed record British fine

CSFB is facing heavy fines in the US as well

(Keystone Archive)

Credit Suisse First Boston (CSFB) has been hit with a record $6.4 million (SFr9.1 million) fine by Britain's financial watchdog.

The investment bank was penalised for trying to mislead Japanese regulatory and tax authorities between 1995 and 1998.

The Financial Services Authority (FSA) said CSFB's derivatives unit in London had concealed and removed evidence about its Japanese businesses.

The FSA found that the company prepared false statements about its activities because it feared Japanese regulators might conclude that the company was doing business without a licence.

"The unprecedented size of the fine makes it clear that we consider any attempt to mislead regulators and other authorities, whether in the UK or other countries, to be an extremely serious issue," said Carol Sergeant, the FSA's head of enforcement.

The watchdog also found that the bank's London unit was worried that the Japanese tax authorities would consider levying local taxes.

Improved standards

The FSA acknowledged that the bank had since made extensive changes to improve its ethics' standards, which had led to an improvement in the company's corporate culture.

"We are pleased to resolve this matter and put it behind us," Gary Lynch, CSFB's vice chairman, said in a statement.

"During the past 18 months, CSFB has focused on establishing a strong control-oriented franchise with a compliance programme that reflects the best practices in the industry."

The company, which said it accepted the FSA findings, added that the actions of certain former employees had been an "aberration".

"CSFB takes its regulatory responsibilities very seriously and will not tolerate improper behaviour by its employees in their dealings with the firm's regulators," said the investment bank.

More fines

This is not CSFB's first run-in with financial authorities. It is one of several banks facing fines in the United States of $1 billion or more for alleged stock research abuses.

CSFB itself could face a fine of around $150 million, according to reports in the Financial Times newspaper.

Credit Suisse's derivatives unit in Japan - shut down in 1999 - was fined 40 million yen in 2001 for obstructing official investigations.

swissinfo with agencies


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