Bank fined £5.95m over investment

The UK arm of banking giant Credit Suisse has been fined £5.95m by the City regulator for failing to sufficiently assess the risk a complex investment product posed to customers.
By The Newsroom
Published 26th Oct 2011, 07:00 BST

Credit Suisse UK customers were exposed to an “unacceptable risk” of being sold a structured capital at risk product (Scarp) that was unsuitable for them, the Financial Services Authority (FSA) said. The Swiss bank had “poor systems” in place and failed to maintain adequate records regarding its advice on Scarps between 2007 and 2009, during which time customers invested more than £1bn in the product.

Scarps are complicated financial products which provide income to customers but also expose them to the risk that they lose all or part of their initial capital. The FSA added that Credit Suisse had inadequate systems to assess customers’ attitudes to risk, failed to take reasonable care to assess the suitability of Scarps for customers and failed to monitor staff when giving advice.

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A Credit Suisse spokesman said: “We deeply regret the failings of systems and controls in the period 2007 to 2009 around the provision of advice to UK private banking clients on structured capital at-risk products.”