US Regulatory Authority Fines Credit Suisse

Credit Suisse has been handed a significant fine of $6.5 million by the US Financial Industry Regulatory Authority (FINRA). Multiple prominent exchanges have joined forces with FINRA in penalizing Credit Suisse for alleged oversight breaches. Regulators in the securities industry concluded that Credit Suisse failed to establish an effective regulatory framework to handle trading violations. The company is accused of not monitoring instances of layering and spoofing between 2010 and 2014. This lack of oversight could have led to infractions on the New York Stock Exchange, Nasdaq, and other exchanges. Consequently, the exchanges and FINRA imposed fines on Credit Suisse for its failure to adhere to various Securities and Exchange Act provisions of 1934.

As part of its services, Credit Suisse provided clients with access to various markets and managed the execution of more than 300 billion shares between 2010 and 2014. Over this period, the trading activities of its clients triggered over 50,000 alerts concerning potential wash sales, layering, spoofing, and other forms of market manipulation. Notably, just three clients of Credit Suisse accounted for 20% of the company’s orders during this time frame.

Due to oversight lapses, it is possible that billions of shares were introduced into US markets without undergoing thorough scrutiny. Adding to the issue, Credit Suisse’s internal audit highlighted shortcomings in its monitoring practices, which were disregarded. In addition to violating the Market Access Rule, Credit Suisse has chosen not to admit or deny the allegations. However, the company has consented to a censure as part of the resolution.