Credit Suisse to pay $90M penalty for misrepresenting performance metric
The Securities and Exchange Commission announced that Credit Suisse AG has agreed to pay a $90M 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 Suisse's violations. An SEC investigation found that Credit Suisse veered from its publicly disclosed methodology for determining net new assets, 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 client's 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 SEC's orders, Rolf Bogli, who served as chief operating officer of the firm's 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 client's intent. The SEC's orders find that Credit Suisse violated Section 17(a)(2) and (3) of the Securities Act of 1933 and Section 13(a) and (b)(2)(A) of the Securities Exchange Act of 1934 and Rules 13a-1, 13a-16, and 12b-20. Bogli neither admitted nor denied the SEC's findings that he was a cause of certain Credit Suisse violations. Bogli agreed to pay an $80,000 penalty.