The Department of Labor said Friday that it plans to hold a public hearing on Jan. 15 to discuss whether, and under what circumstances, Credit Suisse and its affiliates can continue to serve as Qualified Professional Asset Managers to retirement plan clients after Credit Suisse AG pleaded guilty to conspiracy to engage in tax fraud.
After DOL proposed a Sept. 3 exemption for Credit Suisse and affiliates and sought public comment, members of the public—including lawmakers–requested a hearing on the proposed exemption.
While Credit Suisse AG, the parent company based in Switzerland, pleaded guilty on May 20 to one count of conspiracy to engage in tax fraud, which is a violation of section 7206(2) of the Internal Revenue Code, other units of Credit Suisse, such as its asset management unit, were not implicated in the tax evasion conduct.
However, because Credit Suisse AG plead guilty, Credit Suisse and its affiliates, under law, would not be allowed to manage pension assets in the U.S.
Credit Suisse sought a waiver from the DOL so it could continue to manage pension and retirement assets in the U.S.
Without an exemption, DOL said Friday, Credit Suisse’s affiliates “could be restricted from engaging in many commercial transactions on behalf of private pension plans and individual retirement accounts.”
DOL also announced Friday a temporary exemption, with conditions, to allow retirement plans to continue to do business with Credit Suisse’s affiliates as QPAMs, so that possible disruptions in retirement plan investments that would be detrimental to the financial well-being of individuals saving for retirement, or pensions, could be averted.
A Credit Suisse spokesperson said in a statement Friday that “We are pleased the Department of Labor has granted the one-year exemption and has proposed a 10-year exemption that allows us to continue serving our pension clients without disruption.”
DOL said that conditions included in the temporary exemption are specifically designed to protect plan assets and individuals while DOL considers testimony from the hearing, which will take place at DOL headquarters in Washington.