No Asset Management Ban For Credit Suisse

May 21 2014 | 12:16pm ET

A felony conviction generally bars a firm from managing money on behalf of clients. But Credit Suisse will be spared that draconian penalty in the wake of its tax-evasion settlement, at least for now.

The Securities and Exchange Commission gave the bank a temporary exemption from the rule after it became the first financial institution in more than a decade to plead guilty to a crime. In its case, Credit Suisse pled out to allegations that it helped U.S. citizens evade taxes, agreeing to pay $2.6 billion.

While insisting on a guilty plea, prosecutors strove to avoid having it be the “death penalty” for a firm that such a move has been in the past. The Justice Department asked for—and won—promises from federal and state officials not to seek harsh penalties for Credit Suisse that could have forced it to stop doing business in the U.S.

Credit Suisse had argued that its tax fraud did not involve its asset management business, and that barring it could be a “hardship” for investors and would have a “severe” impact on its business and employees. “Neither the protection of investors nor the public interest would be served” by an asset-management ban, it said.

The SEC unanimously approved the temporary reprieve, saying Credit Suisse “made the necessary showing to justify” it. The regulator will later consider a permanent exemption.


In Depth

PAAMCO: Will Inflation Deflate the Asset Bubble?

Jan 30 2018 | 9:49pm ET

As the U.S. shifts from monetary stimulus to fiscal stimulus, market pricing should...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Boost Hedge Fund Marketing ROI By Raising Your ROO

Feb 14 2018 | 9:57pm ET

Tasked with delivering returns on client capital, a common dilemma for many alternative...

 

FINalternatives Trending

From the current issue of