(Adds background about a U.S. Senate investigation which also
raised questions about Credit Suisse's reporting on new net
By Sarah N. Lynch
WASHINGTON Oct 5 Credit Suisse AG
will pay a $90 million penalty and admit wrongdoing after
an investigation by U.S. regulators found the bank
misrepresented how it determined a performance metric in its
wealth management business to investors.
The Securities and Exchange Commission said former Credit
Suisse executive Rolf Bogli, 52, also agreed to settle and pay
$80,000 for his role in the violations.
The SEC said its probe found the bank did not follow the
methodology it had publicly disclosed for determining new net
assets. The metric, the regulator said, helps investors gauge
how successful the bank is in attracting new business.
Neither the bank nor Bogli were accused by the SEC of
intentionally committing fraud, and Bogli settled the charges
without admitting or denying wrongdoing.
A Credit Suisse spokeswoman said the bank cooperated with
the SEC and has since remedied the problems.
"It is important to note that there are no allegations of
intentional misconduct or that (new net asset) numbers were
incorrectly reported. Credit Suisse clients were not harmed,"
Bogli, who had served as chief operating officer for Credit
Suisse's private banking division, "pressured employees" to
classify high net worth clients as new net assets despite
objections raised by some employees, the SEC said.
Kenneth Breen, an attorney at Paul Hastings who represents
Bogli, said his client looks forward to moving on now that a
settlement has been reached.
The SEC's case comes more than two years after an
investigative report by a U.S. Senate panel raised questions
about Credit Suisse's reporting to investors about its net new
Those questions were part of a broader report released in
February 2014 by the Senate's Permanent Subcommittee on
Investigations which looked into offshore tax evasion and
efforts to collect unpaid taxes.
The report highlighted Credit Suisse's public statements to
investors touting the amount of new assets that flowed into its
"During 2012, multiple high level management and accounting
officials within the bank did not follow their own prescribed
policies for determining the size of (net new assets)," the
Instead, the report said Credit Suisse reclassified it in
such a way which helped bolster the financial performance of the
private banking division.
The SEC's case against the bank on Wednesday did not mention
the Senate report, but the allegations in its complaint occurred
during 2012-the same time frame outlined in the congressional
(Reporting by Sarah N. Lynch; Editing by Alan Crosby, Jeffrey
Benkoe and Bernard Orr)