Washington, D.C. – Credit Suisse International, Credit Suisse Securities Europe Limited, and Credit Suisse Capital LLC have agreed to pay $1.5 million to settle charges brought by the Commodity Futures Trading Commission (CFTC) for failing to accurately report swap data, the agency announced June 25, 2021.
The CFTC found that the Credit Suisse entities, all provisionally registered swap dealers, submitted inaccurate daily valuation data for the majority of their equity swap transactions to a swap data repository (SDR) between January 10, 2013, and December 2018. Instead of reporting the required “daily mark” of the swaps, the entities reported the notional value of the underlying equity – a critical discrepancy.
According to the CFTC order, this valuation error affected approximately 91 percent of the Credit Suisse entities’ reportable equity swap positions, and 14 percent of all their reportable swaps. The error manifested in roughly 22 million messages sent to the SDR. The issue stemmed from a single flaw within the reporting engine used by Credit Suisse.
Credit Suisse discovered the reporting error in October 2018 and claimed to have remediated it by mid-December 2018, ensuring accurate reporting of the daily valuation field for equity swaps from that point forward. The entities further stated they had corrected the historical record of inaccurate reports by August 18, 2020.
As part of the settlement, the Credit Suisse entities will cease and desist from violating the Commodity Exchange Act and CFTC regulations. The $1.5 million civil monetary penalty will be paid to the CFTC. The CFTC acknowledged assistance from the Division of Data, the Market Participants Division, and the National Futures Association in bringing the case.
The case was led by CFTC staff members James Deacon, Erica Bodin, Aimée Latimer-Zayets, Rick Glaser, and former staff member Kim Bruno.
Source: CFTC.gov
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