Credit Suisse Hit with $9 million Fine by FINRA for Undisclosed Conflicts and Margin Issues.

Chicago-based Stoltmann Law Offices represents investors who’ve suffered losses from dealing with brokerage firms who’ve placed clients in unsuitable investments and made recommendations mired in conflicts of interest. FINRA, the federal securities regulator, stated it has fined Credit Suisse Securities $9 million for failing to comply with securities laws and rules designed to protect investors, including the Securities and Exchange Commission’s (SEC) Customer Protection Rule and FINRA rules requiring firms to disclose potential conflicts of interest when issuing research reports.

Credit Suisse “failed to maintain possession or control of billions of dollars of fully paid and excess margin securities it carried for customers, as required. Second, on numerous occasions, the firm failed to accurately calculate its required customer reserve—that is, the amount of cash or securities the firm was required to maintain in a special reserve bank account,” FINRA found.

In addition, from 2006 through 2017, FINRA found “Credit Suisse issued more than 20,000 research reports that contained inaccurate disclosures about potential conflicts of interest. FINRA also found that the firm issued more than 6,000 research reports that omitted required disclosures. Credit Suisse’s disclosures omitted that the company that was the subject of the research report had been a client of the firm during the prior 12 months; or that the firm expected to receive investment banking compensation from the subject company within the next three months.”

Under federal securities laws, brokers must disclose all existing and potential conflicts of interest. As part of the settlement, FINRA also required Credit Suisse to “certify that it has implemented supervisory systems and procedures reasonably designed to comply with the Customer Protection Rule and other requirements.”

Have you lost money as a result of recommendations to invest in certain securities by your financial advisor? FINRA and the SEC have strict rules on disclosing risk profiles on all investments sold by brokers and investment advisers. If they fail to fully inform you of downside risk or vet shady companies offering investments prior to making the recommendation to you, you may have a case in arbitration.

Firms are also legally required by FINRA to monitor and supervise what their brokers are selling – their investments must be vetted and authorized by the firms – and have an obligation to investors to fully reveal true risk and return information about the investments sold. Broker-dealers and advisors are also required to fully vet all of the investments they are selling to determine if they are suitable for your age and risk tolerance. Investors can file FINRA arbitration complaints if these rules are broken.

If you invested with a financial or investment adviser and lost money as a result, you may have a claim to pursue through FINRA Arbitration. Please contact Stoltmann Law Offices, P.C. at 312-332-4200 for a free, no obligation consultation with a securities attorney. Stoltmann Law Offices is a contingency fee law firm which means we do not get paid until you do!

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