A Banking Giant Fined for Misconduct
A major banking institution with $1.80 trillion in assets under management has been hit with a hefty civil penalty for engaging in deceptive practices and overcharging customers. The Monetary Authority of Singapore (MAS) has announced that it is imposing a $3.9 million SGD ($2.90 million) fine on Credit Suisse for the bank’s failure to prevent illegal activities conducted by its relationship managers.
Violations of Securities and Futures Act
The MAS states that Credit Suisse’s relationship managers consistently violated Singapore’s Securities and Futures Act (SFA) of 2001 by intentionally overcharging clients and concealing important information to hide their misconduct. The regulatory agency specifically highlights 39 over-the-counter bond transactions where the bank’s employees misrepresented the costs involved, causing clients to pay more than necessary.
Lack of Internal Controls
The MAS also emphasizes that Credit Suisse failed to establish adequate internal controls, such as post-trade monitoring, which could have prevented these unethical behaviors by its employees.
Response and Settlement
In response to the penalty, Credit Suisse promptly settled the civil fine, acknowledged its liability, and implemented stronger internal controls. Despite being acquired by UBS in June, the bank will continue operating independently as a “bank within a bank,” maintaining its services and client relationships.
MAS’s Message to Financial Institutions
MAS Deputy Managing Director Ms. Ho Hern Shi asserts that financial institutions must establish robust governance frameworks and processes to ensure fair and transparent pricing for their customers. The regulatory agency will continue working with banks to enhance their controls in this area and will not hesitate to take strict enforcement action against any institution found in violation of Singapore’s laws.
Hot Take: Trillion-Dollar Bank Faces Consequences for Deceptive Practices
Credit Suisse, a banking giant with $1.80 trillion in assets, has been fined $2.90 million by the Monetary Authority of Singapore (MAS) for engaging in deceptive practices and overcharging customers. The MAS found that Credit Suisse’s relationship managers routinely violated Singapore’s Securities and Futures Act (SFA) by overcharging clients and concealing important information. This lack of transparency led to clients paying more than necessary in 39 bond transactions. The MAS emphasizes the importance of establishing internal controls to prevent such misconduct and warns that it will take firm enforcement action against any financial institution that breaches the law. Credit Suisse settled the penalty, admitted liability, and strengthened its internal controls.
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