SFC fines Credit Suisse for disclosure failures

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Credit Suisse has been fined HK$2.8m (US$358,000) for failing to comply with disclosure requirements for certain research reports it published, according to a statement from the Securities and Futures Commission (SFC).

The regulator found that Credit Suisse (Hong Kong) Limited and Credit Suisse AG failed to disclose their investment banking relationships with the subject companies in research reports on Hong Kong-listed securities published in 2006-2016.

For example, the research reports failed to indicate whether the subject of the report is a Credit Suisse client, if Credit Suisse received investment banking revenue from the subject company in the last 12 months and if Credit Suisse expected to receive compensation for investment banking services from the subject company in the next three months.

“This was caused by an information technology logic issue in one of Credit Suisse’s IT system feeds and it was rectified on 11 August 2016,” the SFC said, adding that 3,607 reports related to Hong Kong-listed securities issued by the bank were potentially impacted by the IT issue.

In addition, “an update by Credit Suisse in August 2016 to revise the market maker disclosure in its research reports led to an inadvertent exclusion of that disclosure from a disclosure template for its research reports”.

As a result, certain research reports on Hong Kong-listed securities distributed by Credit Suisse between August 2016 and 31 May 2017 did not disclose that Credit Suisse (Hong Kong) was a market maker, the regulator said, adding that the issue was fully rectified in May 2017.

The SFC noted that Credit Suisse self-reported both issues.

In 2018, Credit Sussie was fined $47m by the US Department of Justice to end an investigation into whether it hired employees in Asia in return for investment banking business and regulatory green lights.

In May 2017, the Singapore regulator fined Credit Suisse and UOB for breaches of anti-money laundering requirements and control lapses during a series of bank inspections following the 1MDB scandal.

 

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