Losing Credit? US Regulator Fines Credit Suisse

The issue of ethics and honesty comes to mind.

What is an improper investment? Sounds a weakened terminology.  Improper sounds like it is within rules but misguided.  The words deception or unethical leads us to question the character of decision makers. That feels more accurate.

How does fining companies affect the decision makers?  Do fines change behaviour, attitudes, values or do they send a message to not get caught or pay off the problem (calculated cost/benefit)?

Quote from below:  “$5.3 billion to settle with U.S. authorities over claims it misled investors in residential mortgage-backed securities it sold in the run-up to the 2008 financial crisis.”

Fines don’t sound too bad yet I wonder about the reality on the ground of those affected by decisions, what they lost? The emotional turmoil, families breaking up, financial ruin and the destruction of lives etc. What price do we put on that?  Even justice appears a transaction with out of court settlements as companies protect their brand image and hope the public forgets.  Their reality is the bottom line and careers.

Do they understand what democracy is? Do they see their part in the bigger picture of a global community? Do they see how their actions affect others?  Should they be accountable and responsible like anyone else? Or is the world simply a trading platform in the game of making more money.

How does capitalism affect the integrity and character of decision makers?  This is my core question.


April 5, 2017 / 2:03 PM / 6 months ago

U.S. regulator fines Credit Suisse unit, adviser over improper investments

Reuters Staff
(Reuters) – Credit Suisse Securities (USA), a unit of Credit Suisse AG (CSGN.S), and a former investment adviser have agreed to pay about $8 million in fines to settle charges relating to improper investments, the U.S. Securities and Exchange Commission said.

FILE PHOTO: The U.S. Securities and Exchange Commission logo adorns an office door at the SEC headquarters in Washington, June 24, 2011. REUTERS/Jonathan Ernst

According to the SEC’s orders issued on Tuesday, Credit Suisse collected about $3.2 million in avoidable fees from clients during 2009-2014, and about $2.5 million of that amount was generated from Sanford Katz’s advisory clients. (bit.ly/2nVHr1H)

Without admitting or denying the SEC’s findings, Credit Suisse and Katz will collectively pay disgorgement of about $3.2 million, some $600,000 in prejudgment interest, and penalties totaling around $4.1 million.

Katz, who was a former managing director and relationship manager at the bank’s San Francisco office, purchased or held Class A mutual fund shares for advisory clients who were eligible to purchase or hold less expensive institutional share classes of the same mutual funds, the SEC said.

Credit Suisse did not immediately respond to an email outside regular U.S. business hours. Katz could not immediately be reached for comment.

In January, Credit Suisse formally agreed to pay $5.3 billion to settle with U.S. authorities over claims it misled investors in residential mortgage-backed securities it sold in the run-up to the 2008 financial crisis.

Last year, Calvert Investments agreed to settle a civil case with the SEC after being accused of mispricing bonds and collecting inflated fees.

Reporting by Vishal Sridhar in Bengaluru; Editing by Biju Dwarakanath
Mohandas Gandhi

“An eye for an eye only ends up making the whole world blind.”