FINRA sanctions Credit Suisse

U.S. regulators have fined Credit Suisse Securities US$9 million for a series of compliance failures, including undisclosed conflicts of interest in its equity research reports.

The U.S. Financial Industry Regulatory Authority Inc. (FINRA) sanctioned the firm for violations of both the self-regulatory organization’s rules and the U.S. Securities and Exchange Commission’s (SEC’s) customer protection rule.

Credit Suisse settled the case without admitting or denying the SRO’s findings. Along with the monetary sanction, the firm was required to certify that it has enhanced its compliance.

FINRA found that, from 2006 through 2017, the firm issued more than 20,000 research reports that contained inaccurate disclosures about potential conflicts of interest between research and investment banking, and that it issued more than 6,000 reports that omitted required disclosures about possible conflicts.

The SRO also said the firm violated the SEC’s rules by failing to maintain control of excess margin securities it carried for customers, and by failing to calculate the amount of cash or securities it was required to maintain in a special reserve bank account.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.