SEC Fines Credit Suisse for Providing Unregistered Securities Services

The SEC has fined Credit Suisse $196 million for violating the federal securities laws by providing cross-border brokerage and investment advisory services to U.S. clients without first registering with the SEC.

As part of the settlement, Credit Suisse admitted wrongdoing in that the bank provided cross-border securities services to thousands of U.S. clients and collected fees totaling approximately $82 million without following the SEC’s registration provisions to offer these services.

“The broker-dealer and investment adviser registration provisions are core protections for investors,” says Andrew J. Ceresney, director of the SEC’s Division of Enforcement. “As Credit Suisse admitted as part of the settlement, its employees for many years failed to comply with these requirements, and the firm took far too long to achieve compliance.”

The SEC found that Credit Suisse began these activities as early as 2002 and did not take steps to exit this business until after UBS faced similar charges in 2008. By 2010, Credit Suisse closed or transferred the majority of its U.S. clients’ accounts, but the bank did not completely exit the cross-border business until mid-2014.

“As a multinational firm with a significant U.S. presence, Credit Suisse was well aware of the steps that a firm needs to take to legally conduct advisory or brokerage business with U.S. clients,” said Scott W. Friestad, an associate director in the SEC’s Division of Enforcement. “Credit Suisse failed to effectively implement internal controls designed to keep its employees from crossing the line and being non-compliant with the federal securities laws.”