The FSA handed down a £5.6m penalty, saying Credit Suisse failed to properly supervise a structured product group in its investment banking division.
The regulator is keen to bare its teeth at the moment, pointing to credible deterrence as the reason for the high penalty.
The FSA says that a week after announcing its financial results in February, Credit Suisse announced it had identified mismarking and pricing errors by a small number of traders and that it was repricing certain asset-backed securities, leading to a £1.3bn writedown.
It claims that the breaches of its principles related to the pricing of certain asset-backed securities held by the Structured Credit Group within the firm’s investment banking division.
The FSA says the subsidiary failed to adequately supervise the business of SCG and did not act in a timely way on concerns it had identified about the pricing of certain asset-backed positions.
Also, the FSA says adequate systems and controls were not put into place by the subsidiaries which meant it failed to recognise that certain SCG asset-backed positions were wrongly valued for around five months.
FSA director of enforcement Margaret Cole says: “The penalty reflects our tougher stance on enforcement and our policy of imposing higher penalties to achieve credible deterrence.
“It is imperative, particularly in more challenging financial conditions, that firms have in place appropriate systems and controls to manage their risks. The subsidiaries here failed to take appropriate steps to control the potentially high-risk combination in the Structured Credit Group’s holdings of exotic products, opaque valuations and high leverage.
“The sudden and unexpected announcement of the write down had the potential to undermine market confidence.”
And fresh off the press this morning, the ifs School of Finance has confirmed that their new diploma for financial advisers will cost £500.
The school says most advisers should be able to achieve the DipFA within a year of commencing their studies, which is good news for those worrying about the time investment involved in gaining higher qualifications.
The ifs School of Finance head of financial regulation Mark Roberts says: “We have very carefully considered the costs of providing what will be a unique and important addition to the qualifications landscape.
“As always, we are keen to keep costs to a minimum and believe £500 represents real value for money, especially when you consider this will include access to a dedicated online forum, a range of online materials, a study guide, online competence maintenance tool and the exam fee.”