Credit Suisse Paying $90 Million Penalty for Misrepresenting Performance Metric
https://www.sec.gov/news/pressrelease/2016-210.html
Credit Suisse Paying $90 Million Penalty for Misrepresenting Performance Metric
FOR IMMEDIATE RELEASE
2016-210
Washington D.C., Oct. 5, 2016
The Securities and Exchange Commission today announced that Credit Suisse AG has agreed to pay a $90 million penalty and admit wrongdoing to settle charges that it misrepresented how it determined a key performance metric of its wealth management business.
A former executive agreed to settle charges that he was a cause of Credit Suisses violations.
An SEC investigation found that Credit Suisse veered from its publicly disclosed methodology for determining net new assets (NNA), a metric valued by investors in financial institutions to measure success in attracting new business. Disclosures stated that Credit Suisse was individually assessing assets based on each clients intentions and objectives. But Credit Suisse at times instead took an undisclosed results-driven approach to determining NNA in order to meet certain targets established by senior management.
According to the SECs orders, Rolf Bögli, who served as chief operating officer of the firms private banking division, pressured employees to classify certain high net worth and ultra-high net worth client assets as NNA despite concerns raised by employees most knowledgeable about a particular clients intent.
Credit Suisse conveyed to the investing community that it followed a structured process for recognizing net new assets when, in fact, the process was reverse-engineered to meet targets, said Andrew J. Ceresney, Director of the SECs Enforcement Division. Credit Suisses failure to disclose this results-driven approach deprived investors of the opportunity to fairly judge the firms success in attracting new money.
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