Credit Suisse Group AG agreed to pay more than $196 million and admit wrongdoing to settle U.S. Securities and Exchange Commission charges that it provided cross-border brokerage and investment advisory services to U.S. clients without first registering with the regulator.
The admission of wrongdoing was the fifth since last June, when SEC Chairwoman Mary Jo White modified the regulator's decades-old practice of letting defendants settle cases without admitting or denying wrongdoing. The SEC now requires admissions in a broader array of cases.
"Broker-dealer and investment adviser registration provisions are core protections for investors," Andrew Ceresney, director of the SEC enforcement division, said in a statement on Friday. "As Credit Suisse admitted as part of the settlement, its employees for many years failed to comply with these requirements, and the firm took far too long to achieve compliance."
Credit Suisse said it was pleased to settle, and is working to resolve a separate U.S. Department of Justice probe into tax-related matters. It said it set aside money for the SEC settlement in the fourth quarter of 2013.
According to the SEC, Credit Suisse from 2002 to 2008 amassed as many as 8,500 U.S. client accounts that held securities, with an average of $5.6 billion of securities assets under management, from its cross-border advisory and brokerage services operations.
The SEC said relationship managers made about 107 trips to the United States over seven years, providing services to hundreds of clients they visited.
It said Credit Suisse knew of the registration requirements and undertook initiatives to prevent violations, but that these efforts failed because the Swiss bank did not effectively implement or monitor the initiatives.
Credit Suisse began shutting the business down in late 2008, soon after news surfaced about a civil and criminal investigation into similar conduct by another Swiss bank, UBS AG .
In settling SEC administrative proceedings, Credit Suisse agreed to pay $82.2 million representing income from the cross-border securities business, $64.3 million of interest and a $50 million fine.