Credit Suisse Securities to Pay $4.25M for ‘Blue Sheet’ Compliance Lapses

Credit Suisse Securities yesterday reached a $4.25 million settlement with the Securities and Exchange Commission for submitting deficient information to the agency over a two-year period about trades done by its customers, commonly referred to as “blue sheet data.”

As part of the settlement, Credit Suisse admitted that it violated the recordkeeping and reporting provisions of the federal securities laws. It also agreed to be censured and to cease and desist future violations of the books and records provisions of the federal securities laws.

According to the SEC’s order instituting settled administrative proceedings, broker-dealers like Credit Suisse have a fundamental obligation to provide “complete and accurate blue sheet data” when requested by the SEC, so that the agency can use it to identify and analyze trades in the course of investigations and other work. 

“Accurate and complete blue sheet data is essential to the Commission’s efforts to detect many forms of unlawful conduct,” said Sharon Binger, director of the Philadelphia regional office. “We will continue to hold broker-dealers who fail to comply with their obligation to provide the Commission with reliable blue sheet data accountable for their failure.”  

Credit Suisse admitted to the SEC that it failed to provide required accurate and complete blue sheet submissions to the Commission from 2012 to 2014, resulting in at least 593 deficient blue sheet submissions to the SEC, omitting more than 553,400 reportable trades representing 1.3 billion shares. It identified “certain technological and human errors as the root cause of the deficient blue sheet submissions,” the SEC said.

In February 2015, Credit Suisse notified the SEC that it had implemented several changes to ensure the accuracy of its blue sheets including measures designed to prevent, detect, and correct any possible blue sheet data errors. These changes include “installation of controls designed to detect incomplete data transfers and the implementation of enhancements to its validation procedures,” the SEC said.