Credit Suisse UK senior management failed to use their own internal evidencing tool properly in 44 per cent of cases.
This week, the FSA fined Credit Suisse UK £5.95m for systems and controls failings in relation to sales of structured capital at risk products between January 2007 and December 2009.
During the period, 623 Credit Suisse UK customers invested over £1bn in 1,701 Scarps.
The FSA’s final notice says Credit Suisse’s evidencing tool was updated in 2009 and was designed to demonstrate that management had reviewed the suitability of transactions.
But an internal report found that the management at the time did not use this system properly and 44 per cent of the reviews performed were sub-standard.
As a result, the final notice says Credit Suisse UK customers were exposed to “an unacceptable risk of being sold a Scarp which was unsuitable for them”.
The regulator’s notice also says Credit Suisse did not effectively monitor staff to ensure they took reasonable care over the suitability of advice.
Bloomsbury Financial Planning partner Jason Butler says: “The management should be named and shamed because they are responsible for recommending products that they probably do not understand.
“It shows how badly private banks treat their consumers and the lack of effort they put into making sure a product is right for their customers.”