Credit Suisse Fined $5 Million for Hong Kong Regulatory BreachesBy
Bank also paid out $1 million in compensation to investors
Penalty does not constrain business activities, bank says
Credit Suisse Group AG has been fined HK$39.3 million ($5 million) by Hong Kong regulators for various internal control failures spanning a 14 year period.
Several Hong Kong units of the Swiss bank failed to segregate client securities from the firm’s own securities, didn’t report trades correctly, and didn’t configure algorithmic trading systems properly, among breaches identified by the Securities and Futures Commission according to a statement on Thursday.
The failures dated back as far as April 2003 and affected thousands of transactions, the SFC said. The bank also paid HK$7.6 million to compensate clients involved in 10 unsuitable or inconclusive transactions, the statement said.
Credit Suisse’s cooperation “significantly expedited the effective resolution of the issues,” SFC enforcement head Tom Atkinson said in the statement announcing the penalty. “Otherwise, the sanctions for similar failures would have been substantially higher.”
Thursday’s penalty was the second-largest monetary fine handed out in the past 12 months. In November, the regulator fined HSBC Holdings Plc’s private-banking unit a record HK$400 million over sales of structured products linked to Lehman Brothers Holdings Inc. in Hong Kong.
“Credit Suisse has taken appropriate action to ensure that Credit Suisse’s legal and regulatory obligations are upheld at all times and to prevent repetition of these incidents,” Yukmin Hui, a bank spokeswoman said in an emailed statement. “The resolution announced by the SFC today does not place any constraints on Credit Suisse’s business activities in Hong Kong or elsewhere.”