Zurich-based Credit Suisse Group AG agreed Friday to pay the Securities and Exchange Commission $196 million and admit wrongdoing to settle charges that it violated the federal securities laws by providing cross-border brokerage and investment advisory services to U.S. clients without first registering with the SEC.
According to the SEC’s order instituting settled administrative proceedings, Credit Suisse provided cross-border securities services to thousands of U.S. clients and collected fees totaling approximately $82 million without adhering to the registration provisions of the federal securities laws.
Credit Suisse relationship managers traveled to the U.S. to solicit clients, provide investment advice and induce securities transactions. “These relationship managers were not registered to provide brokerage or advisory services, nor were they affiliated with a registered entity,” the SEC said. “The relationship managers also communicated with clients in the U.S. through overseas e-mails and phone calls.”
Andrew Ceresney, director of the SEC’s Division of Enforcement, said in a statement that “the broker-dealer and investment advisor registration provisions are core protections for investors. As Credit Suisse admitted as part of the settlement, its employees for many years failed to comply with these requirements, and the firm took far too long to achieve compliance.”
Credit Suisse admitted the facts in the SEC’s order, acknowledged that its conduct violated the federal securities laws, accepted a censure and a cease-and-desist order and agreed to retain an independent consultant.
Credit Suisse agreed to pay $82,170,990 in disgorgement, $64,340,024 in prejudgment interest, and a $50 million penalty.