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Credit Suisse Securities Fined $16.5 Million for Significant Supervisory Deficiencies in Detecting Suspicious Microcap Trades

FINRA fined Credit Suisse Securities (USA) LLC $16.5 million for anti-money laundering (AML), supervision, and other violations related to the firm's suspicious activity monitoring program pertaining to microcap and other low-priced securities, which regulators classified as "deficient."

FINRA AWC #2013038726101

Investigators found that Credit Suisse failed to escalate and investigate high-risk activity, as required, due in part to the firm's reliance on registered representatives to identify potentially suspicious trading, including microcap and penny stock transactions; according to the AWC, "the systems and procedures used by the firm to monitor trading for other purposes were not designed to detect potentially suspicious activity from an AML perspective."

For example, FINRA wrote that when Credit Suisse customers deposited and sold microcap shares through the firm which should have raised red flags, Credit Suisse failed to identify and/or investigate the suspicious activity, including sales featuring a sudden spike in investor demand alongside a rising price in otherwise thinly-traded or low-priced securities, sales of shares issued by shell companies, sales by issuers whose SEC filings were not current, incomplete, or non-existent, and transactions with limited public information available about the issuers.

FINRA additionally cited Credit Suisse for deficiencies related to foreign financial institutions, stating that Credit Suisse failed to apply its due diligence program to correspondent foreign accounts as required, and failed to perform required period reviews of the accounts or activities in them.

The report also noted that Credit Suisse's automated surveillance system to monitor for potentially suspicious money moments "was not properly implemented" as significant data feeds were missing information or otherwise deficient. FINRA said that Credit Suisse chose not to utilize certain available tools to identify common hallmarks of suspicious activities and patterns and additionally failed to adequately investigate suspicious activity that the firm did identify.

If you have invested with Credit Suisse Securities or with any firm, broker, or financial adviser whose deficient programs, failure to detect or investigate suspicious activity in penny stock transactions, or other red flags related to questionable issuers has proven harmful to your investments or interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for investigation and consultation.

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The Law Offices of Jonathan W. Evans & Associates - California Securities Fraud Attorney
Located at 12711 Ventura Boulevard, Suite #440 Studio City, CA 91604. View Map
Phone: (800) 699-1881 | Local Phone: (818) 760-9880.
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