Credit Suisse Securities agreed to pay $900,000 to settle charges levied by the Financial Industry Regulatory Authority (FINRA) regarding reporting and supervision lapses.
The U.S.-based, broker-dealer subsidiary of Credit Suisse also agreed to be censured as part of the settlement, FINRA announced in a consent order published Friday.
The details: From November 2015 through at least March, Credit Suisse violated FINRA rules related to the reporting of transactions to the Trade Reporting and Compliance Engine (TRACE), which applies to over-the-counter transactions in eligible fixed income securities.
The firm failed to timely report approximately 9,000 late trades and filed hundreds of thousands of inaccurate TRACE reports, resulting in incomplete and inaccurate information being disseminated, FINRA alleged.
Credit Suisse also misapplied indicators in TRACE reports, according to FINRA. The firm submitted reports with inaccurate no remuneration indicators, failing to reflect commissions or markups/downs accurately. Similarly, the firm inaccurately included the nonmember affiliate-principal transaction indicator in certain reports, FINRA alleged.
In addition, Credit Suisse reported inaccurate information to TRACE by providing incorrect contra-party identifiers and execution times. From July 2016 through June 2021, the firm failed to timely notify FINRA of approximately 190 new issue offerings, FINRA said.
Compliance considerations: Credit Suisse’s supervisory system regarding TRACE reporting was not reasonably designed to achieve compliance with FINRA rules, the self-regulatory organization said.
The firm’s supervisory reviews failed to fully address and remediate the underlying causes of reporting delays and errors, and its accuracy reviews were insufficient, FINRA alleged. The firm also lacked a supervisory system to review the timeliness of new issue offering notices, according to FINRA.
Company response: Credit Suisse declined comment. The firm agreed to the settlement without admitting or denying wrongdoing.