FINRA Slaps $900k Penalty on Credit Suisse's US Subsidiary

by Damian Chmiel
  • FINRA has sanctioned the US subsidiary of the Swiss giant.
  • Accusations included inaccurate trade reports.
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The Financial Industry Regulatory Authority (FINRA) has slammed a censure and fine of $900,000 on Credit Suisse for reporting more than 9,000 late trades and hundreds of thousands of inaccurate TRACE reports. The newest ruling covers the period from November 2015 to March 2023.

FINRA Imposes Penalty on Credit Suisse

According to FINRA's documents, the penalty was imposed on Credit Suisse Securities (USA), a subsidiary of the Swiss multinational investment bank and financial services company Credit Suisse. This followed the submission of a Letter of Acceptance, Waiver, and Consent (AWC) by the company to FINRA, admitting to a series of violations of the agency's rules.

These violations spanned from late and inaccurate trade reports to improper internal late error rate targets, which did not effectively address a persistent pattern of late trade reporting. This comprehensive set of violations relates mainly to the firm's dealings with the Trade Reporting and Compliance Engine (TRACE). TRACE system aims to promote transparency in the US over-the-counter securities market.

"The firm's late and inaccurate TRACE reports violated FINRA Rules 6730 and 2010," FINRA commented in the statement.

Furthermore, the firm neglected to provide timely notice for roughly 190 new issue offerings in TRACE-reportable securities. The supervisory system established by Credit Suisse to review the accuracy and timeliness of TRACE reporting was deemed to be unreasonable.

Due to these violations, Credit Suisse is now required to pay a fine of $900,000 and has received censure from FINRA. The penalties will come into effect upon FINRA's formal decision. As a silver lining for Credit Suisse, FINRA will not pursue any future actions against the firm for the same findings stated in the AWC provided that the agreement is accepted. This stipulation will prevent any duplication of penalties for the financial services giant.

Long List of FINRA's Fines in 2023

Credit Suisse Securities (USA) is not the only significant financial entity FINRA fined recently. As Finance Magnates reported in April, Goldman Sachs was fined $3 million for mismarking approximately 60 million short sales orders as 'long' orders between October 2015 and April 2018.

A month earlier, the regulatory body slammed a fine of $3 million on the security broker, Webull, for onboarding unqualified options traders between December 2019 and July 2021. SageTrader, another security broker from California, was hit with a censure order and a fine of $100,000 for failing to establish and implement anti-money laundering procedures.

In February, UBS Securities, located in New York, had to pay $475,000 for publishing 'inaccurate' monthly statistics on the execution of its covered orders between September 2015 and January 2019. In the meantime, BGC Financial was fined $175,000 for failing to properly report the execution time of over 3.5 million US Treasury Securities transactions to TRACE reporting.

The self-regulatory body warned against phishing attempts targeting member firms in a separate update. Impersonators of FINRA were sending emails to FINRA members, luring them to click on phishing links.

The Financial Industry Regulatory Authority (FINRA) has slammed a censure and fine of $900,000 on Credit Suisse for reporting more than 9,000 late trades and hundreds of thousands of inaccurate TRACE reports. The newest ruling covers the period from November 2015 to March 2023.

FINRA Imposes Penalty on Credit Suisse

According to FINRA's documents, the penalty was imposed on Credit Suisse Securities (USA), a subsidiary of the Swiss multinational investment bank and financial services company Credit Suisse. This followed the submission of a Letter of Acceptance, Waiver, and Consent (AWC) by the company to FINRA, admitting to a series of violations of the agency's rules.

These violations spanned from late and inaccurate trade reports to improper internal late error rate targets, which did not effectively address a persistent pattern of late trade reporting. This comprehensive set of violations relates mainly to the firm's dealings with the Trade Reporting and Compliance Engine (TRACE). TRACE system aims to promote transparency in the US over-the-counter securities market.

"The firm's late and inaccurate TRACE reports violated FINRA Rules 6730 and 2010," FINRA commented in the statement.

Furthermore, the firm neglected to provide timely notice for roughly 190 new issue offerings in TRACE-reportable securities. The supervisory system established by Credit Suisse to review the accuracy and timeliness of TRACE reporting was deemed to be unreasonable.

Due to these violations, Credit Suisse is now required to pay a fine of $900,000 and has received censure from FINRA. The penalties will come into effect upon FINRA's formal decision. As a silver lining for Credit Suisse, FINRA will not pursue any future actions against the firm for the same findings stated in the AWC provided that the agreement is accepted. This stipulation will prevent any duplication of penalties for the financial services giant.

Long List of FINRA's Fines in 2023

Credit Suisse Securities (USA) is not the only significant financial entity FINRA fined recently. As Finance Magnates reported in April, Goldman Sachs was fined $3 million for mismarking approximately 60 million short sales orders as 'long' orders between October 2015 and April 2018.

A month earlier, the regulatory body slammed a fine of $3 million on the security broker, Webull, for onboarding unqualified options traders between December 2019 and July 2021. SageTrader, another security broker from California, was hit with a censure order and a fine of $100,000 for failing to establish and implement anti-money laundering procedures.

In February, UBS Securities, located in New York, had to pay $475,000 for publishing 'inaccurate' monthly statistics on the execution of its covered orders between September 2015 and January 2019. In the meantime, BGC Financial was fined $175,000 for failing to properly report the execution time of over 3.5 million US Treasury Securities transactions to TRACE reporting.

The self-regulatory body warned against phishing attempts targeting member firms in a separate update. Impersonators of FINRA were sending emails to FINRA members, luring them to click on phishing links.

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