SFC slaps Credit Suisse with $39.3m penalty

The bank self-reported its various internal control and systems failures to the regulator.

The Securities and Futures Commission has slapped several Credit Suisse units in Hong Kong namely Credit Suisse (Hong Kong) Limited, Credit Suisse Securities (Hong Kong) Limited and Credit Suisse AG with a cumulative penalty of $39.3m for various internal control and system failures.

According to a statement from the Hong Kong regulator, several of the bank’s units failed to comply with a series of regulatory requirements which include segregation of client securities from the firm’s, irregular reporting of business transactions to the SEHK as well as failure to comply with short-selling and electronic trading requirements.

The statement also noted the discovery of thousands of risk mismatch transactions that were excluded from the bank’s post trade business monitoring reports and failure to report short positions amongst other violations.

In a breakdown of the $39.3m penalty, CSHK was fined $18m, CSSHK $9m and CSAG $12.3m. 

The SFC noted that Credit Suisse took it upon itself to report their regulatory breaches and failings to the authority and involved their senior management to address concerns at an early stage. 

“In this instance, Credit Suisse’s prompt and extensive co-operation have significantly expedited the effective resolution of the issues that caused the SFC’s concerns. Otherwise, the sanctions for similar failures would have been substantially higher,” said SFC Executive Director of Enforcement Thomas Atkinson. 

CSAG also agreed to pay $7.6m to affected clients who were involved in 10 unsuitable or inconclusive transactions.

Photo from Thomas Wolf, www.foto-tw.de - Own work, CC BY-SA 3.0 de