Credit Suisse Securities (USA)
The findings stated that the hundreds of millions of trade and order records were not sent to the firm’s systems for review and analysis. As a result of missing or potentially inaccurate data in its surveillance systems, the firm did not detect and investigate numerous instances of potentially violative trading.
The firm's surveillance reports also did not detect specific instances of potentially violative trading. FINRA's analysis revealed that the firm's surveillances did not detect multiple specific instances of potentially manipulative trading by firm customers including instances of potential spoofing, marking the open, wash trades, and insider trading.
Despite the fact that the firm’s surveillance reports were highly dependent on the firm’s database, the firm had no system or procedure to monitor the accuracy and completeness of the data that the database supplied to the firm's surveillance systems. Four firm audits conducted noted that the database was omitting data and transmitting flawed data, and that the firm lacked controls to compensate for the unreliability of its database.
The firm's efforts to address these audit findings included retaining an outside consultant that recommended that the database be replaced because of the risks it posed to the firm's regulatory and compliance program. Nevertheless, the firm did not initially make material progress to replace the database with a new database, and it did not substantially complete the replacement until September 2020.
