FINRA Fines Credit Suisse Securities $9 million for not controlling clients’ securities and conflicts of interests.
According to the Financial Industry Regulatory Authority (FINRA) on January 20, the regulator has sanctioned Credit Suisse Securities, for a number of violations of the customer protection rule over the last 10 years. The SEC’s customer protection rule doesn’t allow financial firms to use customers’ securities to fund business operations.
From 2011 through November 2019, FINRA found that Credit Suisse didn’t maintain possession or control of billions of dollars of customers’ fully paid and excess margin securities due to coding and manual errors, according to the Letter.
The firm’s customer reserve fund was allegedly calculated incorrectly due to coding errors from June 2011 through August 2018.
FINRA also found that from 1997 through 2020, Credit Suisse purportedly failed to maintain 18.6 billion customer brokerage records in non-erasable and non-rewritable format.
From 2006 through 2017, Credit Suisse reportedly released more than 20,000 research reports that contained inaccurate disclosures about potential conflicts of interest, according to FINRA’s findings. Also 6,000 reports omitted required disclosures, such as not revealing that the company that was the subject of the report was a former client of the firm.
Credit Suisse had an inadequate supervisory system to prevent the problems, according to the regulator.
According to a Letter of Acceptance, Credit Suisse accepted the regulator’s findings without admitting or denying them. The firm agreed that it would also improve its supervisory systems and procedures to comply with the customer protection rule.
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This is not the first time that Credit Suisse has been in trouble with regulators. To learn more, please see:
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