FSA slaps £4m fine on investment bank
Swiss investment bank Credit Suisse First Boston International has been hit with a record fine for trying to mislead Japanese tax and regulatory authorities.
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The Financial Service Authority imposed the £4m fine, the highest penalty ever imposed by a UK financial regulator.
CSFBi has admitted to the FSA findings and agreed to pay the £4m ($6.2m) fine.
‘Certain former employees failed to act in an open and cooperative manner towards the Japanese authorities. The individuals are no longer with the firm,’ CSFBi stated today.
Carol Sergeant, managing director of the FSA said the ‘unprecedented size of the fine’ reflected its belief that any attempt to mislead investors, whether in the UK or in other countries, was ‘an extremely serious issue’.
CSFBi was formerly called Credit Suisse financial products and is authorised in the UK. The FSA said that between 1995 and 1998 CSFBi attempted to mislead the Japanese authorities by concealing and removing evidence about the extent and type of its business in Japan.
In addition, CSFBi prepared false explanations about its Japanese business activities as it feared the Japanese financial regulator might conclude it was doing business without the necessary Japanese licence. It also thought that the tax authority might decide that this business should be taxed in Japan.
CSFB has since made structural changes to improve its controls and compliance culture. ‘We are pleased to resolve this matter and put it behind us,’ said Gary Lynch, vice chairman and general counsel of CSFB.