Credit Suisse to Pay $90 Million for Misrepresenting Performance Metric
October 05 2016 - 2:33PM
Dow Jones News
By Austen Hufford
Credit Suisse AG has agreed to pay a $90 million penalty and
admit wrongdoing after the U.S. Securities and Exchange Commission
said it had misrepresented a key performance metric of its
wealth-management business.
The SEC said Credit Suisse improperly disclosed how it
determined its net new assets metric from the fourth quarter of
2011 through the fourth quarter of 2012.
"We cooperated with the SEC's inquiry and have undertaken
appropriate internal remedial efforts," Credit Suisse said in a
statement. "It is important to note that there are no allegations
of intentional misconduct or that NNA numbers were incorrectly
reported. Credit Suisse clients were not harmed."
The metric measures the total amount of inflow of
assets-under-management from new and existing clients and can be
increased by either bringing new business into the bank or by
reclassifying assets-under-custody to assets-under-management.
The Swiss bank is alleged to have pressured employees to
improperly reclassify some of the assets of a select number of
high-net-worth individuals from assets-under-custody to
assets-under-management in order to boost net new assets.
The SEC said Credit Suisse took a "results-driven approach that
allowed targets to drive the timing and amount of NNA recognition"
instead of reassessing the assets on a case-by-case basis.
The regulator said a Credit Suisse senior manager wrote in an
email, "We need the case!!," to implore an employee to find a way
to reclassify assets as assets-under-management.
The SEC said the bank undertook "meaningful cooperation" to help
with the investigation and took that into account for the
settlement.
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
October 05, 2016 14:18 ET (18:18 GMT)
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