Credit Suisse Securities and two affiliated Credit Suisse entities will pay $10 million to settle charges that they provided illegal underwriting and advising services to mutual funds, the Securities and Exchange Commission said Wednesday.
Last year, the Superior Court of New Jersey banned the lender from certain activities when it issued a consent order resolving allegations it had violated state laws in connection with its function as an underwriter to residential mortgage-backed securities.
Credit Suisse, however, continued to offer the banned services for several more months until June 7. Five days later, Credit Suisse was acquired by UBS Group AG for $3.25 billion in an all-share, government-orchestrated deal.
“Today’s action holds the Credit Suisse Entities accountable for not complying with eligibility requirements,” said SEC Asset Management Unit Co-Chief Corey Schuster. “This action reinforces the need for entities to properly monitor for events that may cause disqualification and proactively seek and obtain waivers from the Commission before becoming disqualified, or refrain from performing prohibited services.”
The Credit Suisse entities did not admit or deny the SEC’s findings in agreeing to pay more than $6.7 million in disgorgement and prejudgment interest and civil penalties totaling $3.3 million.
A UBS spokesperson didn’t return a request for comment by press time.
