Credit Suisse’s FINRA fine


Last week we twice wrote about end of the Global Research Analyst Settlement.  We examined a WSJ article which talked about independent research after the settlement expires and we gave our own opinions on the matter.

An interesting follow up to these discussions also came out recently concerning Credit Suisse and their adherence to the policies laid out in the settlement.  Credit Suisse was recently fined $275K by FINRA for failing to make independent research available to its clients.

The Financial Industry Regulatory Authority Inc. (FINRA) claimed that “the firm posted independent research for companies not covered by Credit Suisse and was delayed in providing independent research in a timely manner after offerings.”  They went on to say that “following the discovery of these initial problems, the firm failed to implement effective measures to detect and prevent additional failures.”  Three specific examples were given of these failures from between 2004 to 2008.

Credit Suisse has not admitted or denied guilt relating to these accusations although it is reported that they consented to the entry of FINRA’s findings.   Either way, as we pointed out last week, Credit Suisse was one of the firms which had not commented either way on their plans for making independent research available post settlement.  The fact that they did not make it available when required by law is not a definitive answer but it would seem to carry some implications with it.  Ultimately however, this particular tidbit will not affect our larger viewpoint that the market for independent research has expanded in recent years and that a number of investors see the value that it can bring to the investment process.


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