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US: NY regulator fines Credit Suisse US$135 million over FX practices

By  |  November 13, 2017

Credit Suisse Group has agreed to pay US$135 million to settle allegations that its foreign exchange traders deceived customers, improperly shared their information and tried to manipulate currency prices, the New York State Department of Financial Services (DFS) said on Monday, November 13.

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    The settlement stems from a DFS investigation that found “unlawful, unsafe and unsound conduct” in the Swiss bank’s forex business from at least 2008 to 2015, the regulator said.

    In addition to the fine, Credit Suisse will have to improve its controls and compliance, and hire a consultant to review remedial efforts for at least a year, subject to DFS approval.

    Credit Suisse foreign exchange traders used chat rooms to share confidential customer information, coordinate trades and try to manipulate currencies or benchmark rates, the DFS said.

    Through these communications, the traders were able to trade ahead of clients, or sometimes use a tactic called “building ammo,” with which they coordinated activity to ensure they were not taking positions that would hurt one another, the regulator said.

    Credit Suisse also used an algorithm offered by its electronic trading platform, eFX, to trade ahead of known client orders, DFS said.

    In a statement, DFS Superintendent Maria Vullo blamed Credit Suisse executives who “deliberately fostered a corrupt culture that failed to implement effective controls.”

    Full Content: Financial Times

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