FINRA slaps Credit Suisse with a $6.5 million fine

  • Credit Suisse faces a new $6.5 million fine from FINRA.
  • FINRA cited lack of supervision and compliance with market access regulation as the reason for the imposed fine.
  • Cboe Global Markets, the New York Stock Exchange, the Nasdaq Stock Market LLC, support FINRA’s move.
  • Credit Suisse is yet to comment on the recently imposed fine.

The U.S. securities business of Credit Suisse has been charged a $6.5 million fine by the Financial Industry Regulatory Authority (FINRA) because of a lack in their supervision procedures.

FINRA and other exchanges have established that Credit Suisse was guilty of having a lack of an adequate supervisory system. Therefore, there was no proper protection or monitoring of possible trading violations conducted by clients that have market access through the company. These allegations were particularly directed at activity conducted between 2010 and 2014.

The exchanges that accused the company, including FINRA, also mentioned that Credit Suisse was also in violation of several stipulations in the market access regulation. For example, dealers and brokers who provide exchange access or something similar to customers are required to manage and mitigate the risks of providing this privilege – something that Credit Suisse had not done.

Other Allegations Against Credit Suisse

There are other allegations against the company which include the violation of the prevention of invalid orders, lack of a proactive review of whether or not the firm’s supervision system is effective and market access controls are implemented and defining credit ceilings for customers.

All of these violations are part of the market access regulation and were not followed by Credit Suisse from 2011 to 2017.

FINRA has the support of Cboe Global Markets, the New York Stock Exchange, the Nasdaq Stock Market LLC, and other associated exchanges. All of these parties are backing the fine against the securities business.

According to a source, these were not the only fines levied against the company as the past few years have been full of fines marking violations spanning over a decade and going as far back as 2006. The Securities and Futures Commission fined the business $2.8 million in 2018 for security lapses in Hong Kong.

Although the group took corrective measures to pacify the authorities and reaffirm its reputation for a better 2019, it seems to be back in the same situation with a bigger fine this year. The Swiss bank seems to be often in trouble as it has a thorough track record of fines in several countries of operation.

Credit Suisse’s Response

The renowned bank has refused to comment on the most recent allegations but keeping in view the previous fines and the bank’s current reputation amongst regulatory authorities, the bank will probably have to cough up the money.

The impact of the recent fine is likely to be manifested in the stock market in the upcoming days once it opens after the Christmas holidays.


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