FINRA imposes $900,000 fine on Credit Suisse Securities for deficient TRACE reports
Credit Suisse Securities (USA) LLC has agreed to pay a fine of $900,000 as a part of a settlement with the Financial Industry Regulatory Authority (FINRA).
From November 2015 through at least March 2023, Credit Suisse reported to the Trade Reporting and Compliance Engine (TRACE) approximately 9,000 late trades. Most of these late reports, which ranged from a few minutes to several days late, had one of two root causes: (i) manual errors or omissions that delayed reports or (ii) amendments not submitted in a timely manner.
From May 2016 to July 2021, the firm submitted approximately 514,000 TRACE reports with inaccurate No Remuneration indicators for transactions in U.S. Treasury securities and securitized products. Due to coding errors, the inaccurate reports either failed to include the No Remuneration indicator or added the indicator when it did not apply. The error rate was approximately 19% of the firm’s total TRACE-reported trades in U.S. Treasury securities and securitized products. As a result of separate reviews in 2019 and 2021, the firm identified each coding error within 18 to 30 months after the violations began and remediated each error.
From November 2015 through June 2019, Credit Suisse reported to TRACE approximately 11,500 trade reports in corporate bonds with inaccurate contra-party identifiers. From July 2016 to December 10, 2021, Credit Suisse reported to TRACE approximately 9,700 trade reports in U.S. Treasury securities and securitized products with inaccurate execution times. The firm corrected the coding errors that caused these inaccurate reports and in two separate self-reports disclosed to FINRA its reporting of inaccurate execution times on certain U.S. Treasuries trade reports.
From at least November 2015 through at least March 2023, Credit Suisse’s supervisory system concerning TRACE reporting was not reasonably designed to achieve compliance with FINRA Rules 6730 and 6760 for several reasons.
On top of the $900,000 fine, the firm has agreed to a censure.