Credit Suisse Securities and two affiliated Credit Suisse entities will pay $10m to settle charges that they provided illegal underwriting and advising services to mutual funds, the SEC has said. Credit Suisse neither admitted or denied the charges.

Last year, a trial court in New Jersey banned the lender from serving as principal underwriter or investment adviser to mutual funds and employees’ securities companies when it issued a consent order resolving allegations the company had violated state laws in connection with its function as an underwriter to residential mortgage-backed securities.

“This action reinforces the need to properly monitor for events that may cause disqualification and seek waivers from the Commission before becoming disqualified, or refrain from performing prohibited services.”

Corey Schuster, Co-Chief, SEC Asset Management Unit

Despite the court order, Credit Suisse continued to offer the banned services for several more months and was then acquired by UBS Group AG for $3.25 billion in an all-share, government-orchestrated deal on June 12.

The Credit Suisse entities did not admit or deny the SEC’s findings in agreeing to pay more than $6.7m in disgorgement and prejudgment interest and civil penalties totaling $3.3m.

“This action reinforces the need for entities to properly monitor for events that may cause disqualification and proactively seek and obtain waivers from the Commission before becoming disqualified, or refrain from performing prohibited services,” said Corey Schuster, SEC Asset Management Unit Co-Chief.

A spokesperson for UBS, which acquired Credit Suisse this year, said in an emailed statement to Reuters: “Following the identification and notification of this matter to the SEC, this settlement marks another important step in our efforts to proactively resolve Credit Suisse litigation and legacy matters.”

And, this summer

In July, UBS was fined $387m by regulators from the US and UK for alleged misconduct by its rival-now-subsidiary, which was found to have mishandled its dealings with defunct Archegos Capital Management.

The Federal Reserve Board fined UBS $268.5m for its “unsafe and unsound counterparty credit risk management practices” with Archegos, a limited partnership family office that collapsed in 2021, costing Credit Suisse a whopping $5.5b before it was acquired by its former rival (UBS) in a government-orchestrated deal.

The Bank of England’s Prudential Regulation Authority brought UBS’s cumulative fines up to $387m for the Archegos issues.