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November 10, 2020

Credit Suisse fined in Hong Kong for electronic trading lapses

The Securities and Futures Commission (SFC) in Hong Kong has reprimanded and fined Credit Suisse Securities (Hong Kong) HK$2.1m ($270.8m) for failing to prevent electronic trading anomalies.

The regulator said that the Credit Suisse unit submitted 16,935 erroneous market making quotes. This led to the execution of 8,042 stock option trades at the wrong prices.

The issue was the result of a logic error in the symbol mapping programme, which the unit’s internal controls and regular tests failed to flag.

The failures in its electronic trading system led to regulatory violations.

“In deciding the sanction, the SFC took into account all relevant circumstances, including the prompt remedial actions taken by CSSHK following the incident and CSSHK’s cooperation with the SFC in resolving the SFC’s concerns,” the watchdog said.

Other legal issues

Credit Suisse has been embroiled in several legal issues in recent years.

Last year, the bank was fined by the SFC for disclosure failures related to certain research reports on securities listed in Hong Kong.

The breaches spanned for a decade and was said to be caused by an IT problem.

In 2018, Credit Suisse was fined $10m for fraudulent trading activities. It is currently also facing probe in Belgium over aiding tax evasion.

In 2018, the bank was fined around $77m for corrupt hiring practices in Asia.

Credit Suisse admitted the misconduct, saying that the referral hires were less qualified compared to other staff at the same level, vetted less strictly, and were provided several benefits to help the bank win banking business.

 

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