The SEC is charging Credit Suisse Securities (USA) LLC (CS) with submitting deficient blue sheet data to the regulator about customer trades. The financial firm is settling the charges by paying a $4.25 million penalty. It has admitted to violating federal securities laws. Credit Suisse acknowledged that it made at least 593 deficient blue sheet submissions to the Commission while leaving out 553,400 reportable trades that represented 1.3 billion shares between 2012 and 2014.
Blue sheet data refers to the color of the forms this type of information used to be placed on before being mailed from a broker-dealer to the SEC. The agency uses the trades when conducting investigations and doing other work. The process by which the regulator now procures this information is electronic but the “blue sheet” name has stuck.
The deficiencies at the firm were related to a probe in which the SEC was looking at blue sheet data and comparing them to data that came from the National Securities Clearing Corp. Credit Suisse has identified the cause of the deficient blue sheet submissions as human and technological errors. The firm has since put into place a number of changes to make sure its blue sheets are accurate from now on.
The SEC said that it would continue to hold brokerage firms accountable when they don’t comply with their duty to give the agency blue sheet data that is deficient-free. The Commission noted that inaccuracy in the data might affect the regulator’s ability to perform its duties, undermine its examinations and probes, and affect its ability to make sure that investors are protected.
Broker fraud can lead to catastrophic losses for investors, including institutional investors and high net worth individual investors. The SSEK Partners Group is committed to helping investors get their fraud losses back.
Read the SEC Order (PDF)