Credit Suisse risks fine over Japan 'algo malfunction'
Published on June 20, 2008.
Japanese regulators may fine Credit Suisse after an apparent malfunction of its algorithmic trading services led to clients mistakenly placing large equities orders, according to today’s issue of Yomiuri Shimbun newspaper.
The paper reported that Japan’s Securities and Exchange Commission (SESC) may ask the Financial Services Agency (FSA) to take action against the investment bank over the erroneous trades. The regulator may order Credit Suisse to improve its business management and operations, but also has the power to suspend its activities.
The trades took place at the end of the trading day and resulted in shares being bought at a higher price than the client, understood to a be a fund, had wanted.
A spokesperson for Credit Suisse in Japan told Reuters, the news agency, that the firm was undergoing a regular audit by the SESC. Credit Suisse has provided clients with algorithmic trading services in Japan since 2003.
Credit Suisse also issued a statement saying that it regarded the story as "inaccurate".
