Credit Suisse censured, fined $6.5 million over trading supervision

Net AUM loss: $1B Net adviser loss: 1 Departure

Finra and exchanges say firm’s clients generated more than 50,000 alerts

Credit Suisse Securities has been censured and fined $6.5 million by Finra and three major exchanges for supervisory violations in connection with market access rules.

[More: Finra censures Newbridge Securities and fines firm $225,000]

According to the Financial Industry Regulatory Authority Inc., Cboe Global Markets, the Nasdaq Stock Market and the New York Stock Exchange, from 2010 to 2014, certain Credit Suisse clients engaged in trading activity that generated over 50,000 alerts for potential manipulative trading, including spoofing, layering, wash sales and pre-arranged trading. Three of the firm’s direct market access clients accounted for the majority of the alerts and about 20% of the firm’s overall order flow.

Finra and the exchanges found that during most of the 2010-2014 period, Credit Suisse did not establish a satisfactory system to supervise the trading of its direct-market-access clients. As a result, the regulators said, orders for billions of shares entered the U.S. markets without being subjected to post-trade supervisory reviews for potential manipulative activity. An internal audit report and correspondence with one of its direct market access clients each put Credit Suisse on notice of gaps in its surveillance system, the regulators noted.