Credit Suisse Group AG has agreed to pay a $90 million penalty to settle U.S. Securities and Exchange Commission claims that the bank misrepresented how much money it attracted to its private bank.
Employees inflated new client assets managed from the fourth quarter of 2011 to 2012 to meet sales targets, which painted a rosier picture of the bank for investors, according to a statement Wednesday from the regulator.
The Zurich lender admitted that pressure from managers led to the securities violations. Former Chief Operating Officer Rolf Boegli, who didn't admit or deny the findings, agreed to pay an $80,000 penalty for purportedly pushing employees to misrepresent the assets despite their concerns.
"Credit Suisse conveyed to the investing community that it followed a structured process for recognizing net new assets when, in fact, the process was reverse-engineered to meet targets," Andrew Ceresney, head of the SEC's enforcement division, said in a statement.
More than $1 billion of a private wealth client's assets were reclassified in the fourth quarter of 2011 as being managed by the bank, which generally generates higher fees, than just held at the bank, according to the SEC. Another customer had more than $4 billion reclassified as managed assets in the first quarter of 2012, which constituted more than 75 percent of net new money reported by Credit Suisse's wealth management business that quarter.
Business on 10/06/2016