Credit Suisse companies have been too late in applying for special regulatory exemptions in America. UBS is now having to foot the bill.
Three subsidiaries of Credit Suisse have agreed to pay $10 million to settle an investigation by the United States Securities and Exchange Commission (SEC), according to a statement.
The dispute was whether these units had been providing unauthorized services to investment funds over several months.
The Problem With the Waiver
An important rule in the US financial industry got in the way of the Credit Suisse companies. According to rulings in legal disputes with government entities, financial service providers can be prohibited from doing business with institutional investors unless there is a special regulatory exemption or waiver in place.
Having settled with the state of New Jersey in October 2022, Credit Suisse should have immediately applied for such a waiver, but for unclear reasons, it waited until after the forced takeover by UBS in March of the following year. The necessary exemption for advising investment funds was subsequently granted to the new parent company UBS. The units are now wholly owned subsidiaries of UBS.
UBS Has Notified the Supervisory Authority
In reaching the settlement UBS has neither admitted nor denied any wrongdoing, the report says. «After identifying this issue and reporting it to the SEC, this settlement is another important step in our efforts to proactively resolve Credit Suisse’s legal disputes and legacy issues,» the bank was quoted as saying.
