Credit Suisse Faces Penalty in Japan for Leaking Informationby and
SESC says an analyst shared data on a company's earnings
Deutsche Bank was penalized for similar action in December
Credit Suisse Group AG faces punishment in Japan after the nation’s securities watchdog found that it leaked private information about a company.
The Securities and Exchange Surveillance Commission recommended that the Financial Services Agency penalize Credit Suisse’s Japanese brokerage unit, the SESC said in a statement on Friday, without specifying the type of action sought.
An analyst at the Swiss firm gave non-public information to a colleague in the sales division, plus at least one customer, about an unidentified company’s earnings forecast, the SESC said. The sales employee then solicited at least 33 customers to buy shares in the company whose information was leaked, the commission said.
The SESC said Credit Suisse Securities (Japan) Ltd. had inadequate systems for managing non-public information about companies. The “root cause” of its flaws was insufficient measures to ensure internal controls following a downsizing, the watchdog said.
Credit Suisse said it takes the action seriously and will continue to make efforts to strengthen its internal controls, according to a statement on its website.
It’s the second securities firm to face penalties for information leaks in Japan since December, when the FSA sanctioned Deutsche Bank AG’s local brokerage unit after one of its analysts sent salesmen and a client e-mails containing non-public information on a company’s earnings. The German bank was ordered to take measures to prevent a recurrence and improve its compliance.
The SESC carries out inspections on behalf of the FSA and has the power to make recommendations for actions by the agency.