Texas Pension Suspends Credit Suisse’s Securities TradingDarrell Preston and Michael B. Marois
Employees Retirement System of Texas halted trading with Credit Suisse Group AG after Switzerland’s second-biggest bank pleaded guilty this week to a U.S. criminal charge.
“We are suspending trading with them at this time,” Mary Jane Wardlow, spokeswoman in Austin for the pension fund, which manages $25.4 billion for state workers, said yesterday in an e-mail. “We have a policy against hiring firms convicted of felonies.”
Credit Suisse agreed May 19 to plead guilty and pay $2.6 billion of penalties for helping American residents dodge taxes, becoming the first global bank in a decade to admit to a crime in a U.S. courtroom.
“While we regret the actions that led to this settlement, our overwhelming experience has been that clients –- including pension clients –- are continuing to conduct business with us, and we continue to maintain our market share and trading,” Suzanne Fleming, a New York-based spokeswoman for the bank, said yesterday in an e-mailed statement. “None of the U.S. Credit Suisse entities were implicated in the historical actions that led to the guilty plea.”
Officials with other public pension funds said they were reviewing relationships with the bank following the guilty plea. The California Public Employees’ Retirement System has “limited exposure” to Credit Suisse and is “monitoring the situation,” said Joe DeAnda, a spokesman in Sacramento for the largest public U.S. pension.
“We do not have a specific policy that prohibits us” from working with the firm, DeAnda said in a statement. “We would not necessarily need a policy, as we would have the discretion to terminate the relationship based on the nature of the issue.”
Credit Suisse earned $702,455 in commissions trading for Employees Retirement System of Texas in the fiscal year ended Aug. 31, according to the fund’s annual report.