(HedgeCo.Net) The Securities and Exchange Commission has announced that Credit Suisse Securities (USA) LLC has agreed to settle charges brought by the SEC and the Office of the New York Attorney General regarding material misrepresentations and omissions made in connection with its now-closed Retail Execution Services (RES) business\u2019 handling of certain customer orders. The settlements require Credit Suisse to pay $5 million to the SEC and $5 million to the NYAG for a total of $10 million.<\/p>\n
According to the SEC\u2019s order, Credit Suisse created the RES desk to execute orders for other broker-dealers that handle order flow on behalf of retail investors. The SEC\u2019s order finds that although RES promoted its access to dark pool liquidity to customers, the firm executed an exceedingly minimal number of held orders \u2013 orders that must be executed immediately at the current market price \u2013 in dark pools from September 2011 to December 2012.<\/p>\n
The SEC\u2019s order also finds that although Credit Suisse touted \u201crobust\u201d and \u201cenhanced\u201d price improvement on orders, RES\u2019s computer code treated orders for which execution quality is required to be publicly reported differently from orders for which execution quality is not publicly reported. The SEC\u2019s order finds that from mid-2011 to March 2015, retail customers did not receive any price improvement from RES on their non-reportable orders, which Credit Suisse failed to disclose. The SEC\u2019s order also finds that for these non-reportable orders, RES disproportionately used a routing tactic that generally caused market impact and resulted in less favorable execution prices for customers, despite claiming to benefit RES\u2019s customers. The use of this routing tactic provided RES an opportunity to profit from its execution of the final portions of those customer orders internally.<\/p>\n
\u201cMarket makers that handle retail orders must be transparent with their customers about how orders will be executed and how the market maker will profit from their customers\u2019 trades,\u201d said Marc P. Berger, Director of the SEC\u2019s New York Regional Office. \u201cThe settlement holds Credit Suisse accountable for failing to accurately disclose important information about the nature and quality of its execution of trades for retail investors.\u201d<\/p>\n
The SEC\u2019s order finds that Credit Suisse negligently violated Section 17(a)(2) of the Securities Act. In addition to imposing the penalty, the SEC\u2019s order censures Credit Suisse and requires that it cease and desist from further violations. Credit Suisse consented to the SEC\u2019s order without admitting or denying the findings.<\/p>\n","protected":false},"excerpt":{"rendered":"
(HedgeCo.Net) The Securities and Exchange Commission has announced that Credit Suisse Securities (USA) LLC has agreed to settle charges brought by the SEC and the Office of the New York Attorney General regarding material misrepresentations and omissions made in connection […]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16,3,16048],"tags":[],"class_list":["post-66018","post","type-post","status-publish","format-standard","hentry","category-hedgeco-networks-press-releases","category-hedgeco-news","category-hedgecovest-news"],"_links":{"self":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/66018","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/comments?post=66018"}],"version-history":[{"count":1,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/66018\/revisions"}],"predecessor-version":[{"id":66019,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/66018\/revisions\/66019"}],"wp:attachment":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/media?parent=66018"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/categories?post=66018"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/tags?post=66018"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}