ZURICH (dpa-AFX) - The Monetary Authority of Singapore or MAS has fined Swiss bank Credit Suisse AG, affiliated to banking major UBS Group AG (UBS), a civil penalty of S$3.9 million for its failure to prevent or detect misconduct by its relationship managers or RMs in the Singapore branch.
When the bank executes the OTC transactions, it charges a spread over the price obtained from the relevant interbank counterparties.
The RMs in Singapore had provided clients with inaccurate or incomplete post-trade disclosures. This had resulted in clients being charged spreads which were above bilaterally agreed rates for 39 over the counter or OTC bond transactions.
For 39 of these OTC transactions, the RMs had made false statements to their clients regarding the executed interbank prices and the spreads charged, and had omitted material information that the spreads charged were above the agreed rates.
In a statement, the MAS said its penalty comes after reviewing the pricing and disclosure practices of the banking industry. Its investigations revealed that the bank had failed to put in place adequate controls, such as post-trade monitoring, to prevent or detect the RMs' misconduct.
MAS added that the bank has admitted its liability and failure to prevent or detect the misconduct by its RMs. It has paid the civil penalty and has also separately compensated its clients as part of the civil penalty settlement.
On Wednesday, UBS shares closed at $31.23, up 0.13% on the New York Stock Exchange.
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