MAS fines Credit Suisse $3.9M for misconduct in SG branch by its relationship managers

SINGAPORE: On Thursday, Dec 28, The Monetary Authority of Singapore (MAS) imposed a civil penalty on Credit Suisse AG (Credit Suisse). On the released media, MAS fined Credit Suisse $3.9 million for misconduct in the Singapore branch for failing to prevent or detect misconduct by its relationship managers (RMs).

This penalty stems from the RMs providing clients with inaccurate or incomplete post-trade disclosures, resulting in “clients being charged spreads above bilaterally agreed rates for 39 over-the-counter (OTC) bond transactions.”

When executing OTC transactions on behalf of clients, Credit Suisse charges a spread over the price obtained from relevant interbank counterparties. In this case, the RMs contravened sections 201(c) and 201(d) of the Securities and Futures Act 2001 (SFA) by making false statements to clients about the executed interbank prices and/or spreads charged. They also omitted material information that the spreads charged were above the agreed rates.

MAS states, “Investigations revealed that the bank had failed to put in place adequate controls, such as post-trade monitoring, to prevent or detect the RMs’ misconduct.”

MAS also stated, “Credit Suisse has admitted liability under section 236C of the SFA for its failure to prevent or detect the misconduct by its RMs.”

The bank has paid MAS the $3.9 million civil penalty. The bank has also separately compensated its affected clients.

MAS’s Deputy Managing Director (Financial Supervision), Ms Ho Hern Shin, stated, “Financial institutions should implement robust governance frameworks and processes to ensure fair and transparent pricing to their customers. We will continue to engage the banks to improve their controls in this area and will not hesitate to take firm enforcement action against financial institutions found to have breached our laws.”/TISG