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October 05, 2016 at 11:22 AM
Credit Suisse AG on Wednesday agreed to pay a $90 million penalty and admit wrongdoing to settle Securities and Exchange Commission charges that it misrepresented how it determined a key performance metric of its wealth management business to meet sales targets.
A former executive, Rolf Bögli, who served as chief operating officer of the firm’s private banking division, also agreed to settle charges that he caused some of the Credit Suisse violations by pressuring employees to veer from Credit Suisse’s publicly disclosed methodology for determining net new assets (NNA), a metric valued by investors in financial institutions to measure success in attracting new business.
Instead of individually assessing assets based on each client’s intentions and objectives, Credit Suisse at times “took an undisclosed results-driven approach to determining NNA in order to meet certain targets established by senior management,” the SEC order states.
According to the SEC, Bögli “pressured employees to classify certain high-net worth and ultra-high-net worth client assets as NNA despite concerns raised by employees most knowledgeable about a particular client’s intent.”
Bögli “continued to press his subordinates” to identify sources of NNA, the SEC order states. In one instance, “despite being informed by his subordinate that a reclassification of Client B’s assets was ‘not expected to happen in March, more likely [a] Q2 event,’ the senior manager of Private Banking wrote: ‘Any option to speed this up? We need this inflow in March!’”
