Credit Suisse hit with $6.5m US fine for supervisory lapses

Credit Suisse Securities (USA) did not establish a supervisory system reasonably designed to monitor for potential trading violations between 2010 and 2014. (Reuters)
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Updated 24 December 2019

Credit Suisse hit with $6.5m US fine for supervisory lapses

  • From 2011 to 2017, Credit Suisse violated the US market access rule
  • In settling the matter, Credit Suisse neither admitted nor denied the charges

VIENNA: The US Financial Industry Regulatory Authority (FINRA) and major exchanges have fined Credit Suisse’s US-based securities business $6.5 million for supervisory failings, FINRA said late on Monday.
FINRA, the securities industry self-regulator, and the exchanges found that Credit Suisse Securities (USA) did not establish a supervisory system reasonably designed to monitor for potential trading violations, such as spoofing and layering, for clients it had offered direct market access to numerous exchanges between 2010 and 2014.
The exchanges backing the fine are Cboe Global Markets, the Nasdaq Stock Market LLC, the New York Stock Exchange, and their affiliated exchanges.
“In addition, Credit Suisse violated numerous provisions of the market access rule, which requires broker-dealers that provide their customers access to an exchange or an alternative trading system to reasonably manage the financial and regulatory risks of providing such access,” FINRA said in a statement.
From 2011 to 2017, Credit Suisse violated the market access rule’s provisions related to the prevention of erroneous orders, the setting of credit limits and the firm’s annual review of the effectiveness of its market access controls and supervisory procedures, the statement said.
In settling the matter, Credit Suisse neither admitted nor denied the charges, the statement added.
Credit Suisse did not immediately reply to a request for comment.


Huawei: Smartphone chips running out under US sanctions

Updated 8 min 47 sec ago

Huawei: Smartphone chips running out under US sanctions

  • Huawei is at the center of US-Chinese tension over technology and security
  • Washington cut off Huawei’s access to US components and technology last year

BEIJING: Chinese tech giant Huawei is running out of processor chips to make smartphones due to US sanctions and will be forced to stop production of its own most advanced chips, a company executive says, in a sign of growing damage to Huawei’s business from American pressure.
Huawei Technologies, one of the biggest producers of smartphones and network equipment, is at the center of US-Chinese tension over technology and security. The feud has spread to include the popular Chinese-owned video app TikTok and China-based messaging service WeChat.
Washington cut off Huawei’s access to US components and technology including Google’s music and other smartphone services last year. Those penalties were tightened in May when the White House barred vendors worldwide from using US technology to produce components for Huawei.
Production of Kirin chips designed by Huawei’s own engineers will stop Sept. 15 because they are made by contractors that need US manufacturing technology, said Richard Yu, president of the company’s consumer unit. He said Huawei lacks the ability to make its own chips.
“This is a very big loss for us,” Yu said Friday at an industry conference, China Info 100, according to a video recording of his comments posted on multiple websites.
“Unfortunately, in the second round of US sanctions, our chip producers only accepted orders until May 15. Production will close on Sept. 15,” Yu said. “This year may be the last generation of Huawei Kirin high-end chips.”
More broadly, Huawei’s smartphone production has “no chips and no supply,” Yu said.
Yu said this year’s smartphone sales probably will be lower than 2019’s level of 240 million handsets but gave no details. The company didn’t immediately respond to questions Saturday.
Huawei, founded in 1987 by a former military engineer, denies accusations it might facilitate Chinese spying. Chinese officials accuse Washington of using national security as an excuse to stop a competitor to US tech industries.
Huawei is a leader among emerging Chinese competitors in telecoms, electric cars, renewable energy and other fields in which the ruling Communist Party hopes China can become a global leader.
Huawei has 180,000 employees and one of the world’s biggest research and development budgets at more than $15 billion a year. But, like most global tech brands, it relies on contractors to manufacture its products.
Earlier, Huawei announced its global sales rose 13.1 percent over a year ago to $65 billion in the first half of 2020. Yu said that was due to strong sales of high-end products but gave no details.
Huawei became the world’s top-selling smartphone brand in the three months ending in June, passing rival Samsung for the first time due to strong demand in China, according to Canalys. Sales abroad fell 27 percent from a year earlier.
Washington also is lobbying European and other allies to exclude Huawei from planned next-generation networks as a security risk.
In other US-Chinese clashes, TikTok’s owner, ByteDance, is under White House pressure to sell the video app. That is due to fears its access to personal information about millions of American users might be a security risk.
On Thursday, President Donald Trump announced a ban on unspecified transactions with TikTok and the Chinese owner of WeChat, a popular messaging service.