Credit Suisse AG Pays $90M to Settle SEC Charges of Materially Misleading Disclosures

Chris Gaetano
Published Date:
Oct 6, 2016

Credit Suisse AG has agreed to pay the Securities and Exchange Commission $90 million over charges that it manipulated how it determined new net assets in its wealth management business. Specifically, the SEC faulted the Swiss bank for how it calculated new net assets (NNA), a metric used to measure success in attracting new business. 

While public filings said that "the classification of assets under management is individually assessed on the basis of each client's intentions and objectives and the banking services provided to the client," the SEC said that Credit Suisse instead "took a results-driven approach that allowed targets to drive the timing and amount of NNA recognition. In certain instances, certain Credit Suisse managers pressured other Credit Suisse employees to classify certain client assets as [assets under management] despite concerns raised by others." Essentially, according to the SEC, assets that should have been classified as "under custody" were, instead, improperly classified as "under management," thus inflating the NNA. 

“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 SEC’s Enforcement Division.  “Credit Suisse’s failure to disclose this results-driven approach deprived investors of the opportunity to fairly judge the firm’s success in attracting new money.”

Rolf Bögli, who served as chief operating officer of the firm’s private banking division, agreed to pay $80,000 as well. 

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