FINRA fines Credit Suisse $1.75mn
28 December 2011 Washington
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FINRA has announced that it has fined Credit Suisse $1.75 million for violating RegSHO and failing to properly supervise short sales of securities and marking of sale orders.
As a result of these violations, Credit Suisse entered millions of short sale orders without reasonable grounds to believe that the securities could be borrowed and delivered and mismarked thousands of sales orders.
The US short selling regulation, RegSHO, requires that firms obtain and document this "locate" information before the short sale is entered, thereby reducing the number of potential failures to deliver in equity securities. In addition, brokers and dealers are required to mark sales of equity securities as long or short.
Brad Bennett, FINRA executive vice president and chief of enforcement, said, "Credit Suisse's RegSHO supervisory and compliance monitoring system was seriously flawed. Millions of short sale orders were being entered in its systems without locates for over four years because the firm did not have adequate Reg SHO technology and procedures in place."
In concluding this settlement, Credit Suisse neither admitted nor denied the charges, but consented to the entry of FINRA's findings.
As a result of these violations, Credit Suisse entered millions of short sale orders without reasonable grounds to believe that the securities could be borrowed and delivered and mismarked thousands of sales orders.
The US short selling regulation, RegSHO, requires that firms obtain and document this "locate" information before the short sale is entered, thereby reducing the number of potential failures to deliver in equity securities. In addition, brokers and dealers are required to mark sales of equity securities as long or short.
Brad Bennett, FINRA executive vice president and chief of enforcement, said, "Credit Suisse's RegSHO supervisory and compliance monitoring system was seriously flawed. Millions of short sale orders were being entered in its systems without locates for over four years because the firm did not have adequate Reg SHO technology and procedures in place."
In concluding this settlement, Credit Suisse neither admitted nor denied the charges, but consented to the entry of FINRA's findings.
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