The United States’ Securities and Exchange Commission (SEC) announced today that it has settled with Credit Suisse for a civil penalty of $600,000 as the investment banking giant failed to submit some mandatory trading information.
Broker-dealers need to furnish the market regulator with transaction information. The SEC uses these so-called ‘blue sheet data’ to carry out regulatory scrutiny, including the possibility of insider trading and other fraudulent activities.
“It is a fundamental obligation of broker-dealers to provide complete and accurate EBS data when requested by representatives of the Commission to do so,” SEC stated.
According to the regulator’s announcement on Wednesday, half of 135 fixed-income electronic blue sheets (EBS) submitted by Credit Suisse between March 16, 2015, and March 11, 2019, were deficient. This resulted in the misreporting of trade data for 2,460 transactions.
“Credit Suisse’s fixed-income EBS submissions contained inaccurate fields because the submissions included only allocation level information and did not include execution level information,” the notice added.
Legal Risk Factor Beneath Ripple’s Lawsuit from SECGo to article >>
Furthermore, the company reported incorrect exchange codes and average price account data for all of its 2,460 fixed-income transactions.
The regulator highlighted that, with all this, the financial services company has willfully violated provisions of Section 17(a)(1) of the Securities Exchange Act of 1934 and Rules 17a-4(j) and 17a-25.
In addition to the fine, the company admitted the cease-and-desist order by the regulator and also agreed to be censured.
Not Learning from Previous Mistakes
Meanwhile, Credit Suisse has a history of such EBS lapses and was fined multiple times by the SEC as well as the Financial Industry Regulatory Authority (FINRA). In 2016, Credit Suisse consented to a cease and desist order, censure, and a penalty of $4,250,000 slapped by the financial regulator for similar lapses.
In Switzerland, the Financial Market Supervisory Authority (FINMA) opened a probe against the banking giant for its involvement in corporate espionage over its own employees.