Credit Suisse was fined £5.95 million (€6.83 million) by the Financial Services Authority in the UK for “a number of serious failings” in its structured capital and risk products business.
Structured capital and risk products are complex financial products aiming to provide income, but clients risk loosing all or part of their initial capital.
The regulator says Credit Suisse customer invested over £1 billion in these products. “During that period there were a number of serious failings in the systems and controls in respect of those sales,” the statement says.
These included inadequate systems and controls in relation to assessing customers’ attitudes to risk; failing to take reasonable care to properly evidence the suitability for customers; and failing to monitor staff effectively to ensure that they took reasonable care when giving advice.
The regulator says Credit Suisse has made a number of changes and agreed to settle at an early stage entitling it to a 30% discount on its fine.
“We have seen all too frequently the consequences of financial services firms failing to implement proper systems and controls to ensure their customers invest in suitable products,” says Tracey McDermott, acting director of enforcement and financial crime. “A proper assessment of customers’ individual needs and circumstances is even more critical where firms are selling complex products.”
Credit Suisse says in a statement: “We deeply regret the failings of systems and controls in the period 2007 – 2009 around the provision of advice to UK private banking clients on structured capital at risk products. We have made significant improvements to our processes and controls since 2009 and we are confident that we currently comply with our regulatory obligations.”
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