Credit Suisse Securities has been hit with a staggering $6.5 million fine. This fine was levied by the Financial Industry Regulatory Authority (FINRA) and an array of exchanges: NASDAQ, Cboe Global Markets, the NYSE and their various affiliated exchanges. This fine was sent via an official filing done by FINRA.

Four-Year Long Regulatory Violation

Within this filing, details are given of how Credit Suisse Securities violated the Supervision and Market Access Rules for four years straight. The relevant period for this fine is between the years 2010 and 2014.

During this relevant time period, Credit Suisse had offered broker-dealers as well as other institutional entities direct market access to a broad array of other exchanges. Within those four years, Credit Suisse executed over 300 billion shares on the prerogative of the company’s direct market access clients.

Over 50 000 Alerts Primarily From Three Clients

The bad news to this is the fact that FINRA had over 50,000 alerts generated within this timeframe, with the other Exchanges being alerted as well. These alerts focused primarily on the potential manipulative trading practices that happened in this time period.

In particular, these alerts pointed to the potential crimes of pre-arranged trading, wash sales as well as spoofing and layering. Something of note is that there were three specific clients that drew particular interest and accounted for the largest segment of these suspicious activity alerts.

Keeping The Industry Clean

In regards to this fine, both FINRA and the Exchanges gave a statement about the matter. They explained that firms like Credit Suisse act as gatekeepers to the US market at large. Thus, it is critical for these firms to properly implement a satisfactory supervisory system as well as partake in active surveillance practices. This would effectively detect manipulative activities and thus protect the integrity of the US-based markets.

The group pointed to this current case, explaining that it should serve as an example that all firms who fail to uphold these standards will be held accountable.

Those three suspected clients attributed to around 20% of Credit Suisse’s overall order flow. What’s concerning is, the firm didn’t seem to properly establish an adequate written supervisory system, even with the large number of alerts that both FINRA and other exchanges sent.

Credit Suisse had neither confirmed nor denied these accusations. Instead, the group simply consented to the findings and agreed to pay the $6.5 million fine as reparations to it.