CREDIT SUISSE SECURITIES (USA) LLC - FINRABrokerCheck Report CREDIT SUISSE SECURITIES (USA) LLC Section Title Report Summary Firm History CRD# 816 1 11 Firm Profile 2 - 10 Page(s)

BrokerCheck Report

CREDIT SUISSE SECURITIES (USA) LLC

Section Title

Report Summary

Firm History

CRD# 816

1

12

Firm Profile 2 - 11

Page(s)

Firm Operations 13 - 24

Disclosure Events 25

http://www.finra.org

About BrokerCheck®

BrokerCheck offers information on all current, and many former, registered securities brokers, and all current and formerregistered securities firms. FINRA strongly encourages investors to use BrokerCheck to check the background ofsecurities brokers and brokerage firms before deciding to conduct, or continue to conduct, business with them.

· What is included in a BrokerCheck report?· BrokerCheck reports for individual brokers include information such as employment history, professional

qualifications, disciplinary actions, criminal convictions, civil judgments and arbitration awards. BrokerCheckreports for brokerage firms include information on a firm’s profile, history, and operations, as well as many of thesame disclosure events mentioned above.

· Please note that the information contained in a BrokerCheck report may include pending actions orallegations that may be contested, unresolved or unproven. In the end, these actions or allegations may beresolved in favor of the broker or brokerage firm, or concluded through a negotiated settlement with noadmission or finding of wrongdoing.

· Where did this information come from?· The information contained in BrokerCheck comes from FINRA’s Central Registration Depository, or

CRD® and is a combination of: o information FINRA and/or the Securities and Exchange Commission (SEC) require brokers and

brokerage firms to submit as part of the registration and licensing process, and o information that regulators report regarding disciplinary actions or allegations against firms or brokers.

· How current is this information?· Generally, active brokerage firms and brokers are required to update their professional and disciplinary

information in CRD within 30 days. Under most circumstances, information reported by brokerage firms, brokersand regulators is available in BrokerCheck the next business day.

· What if I want to check the background of an investment adviser firm or investment adviserrepresentative?

· To check the background of an investment adviser firm or representative, you can search for the firm orindividual in BrokerCheck. If your search is successful, click on the link provided to view the available licensingand registration information in the SEC's Investment Adviser Public Disclosure (IAPD) website athttps://www.adviserinfo.sec.gov. In the alternative, you may search the IAPD website directly or contact yourstate securities regulator at http://www.finra.org/Investors/ToolsCalculators/BrokerCheck/P455414.

· Are there other resources I can use to check the background of investment professionals?· FINRA recommends that you learn as much as possible about an investment professional before

deciding to work with them. Your state securities regulator can help you research brokers and investment adviserrepresentatives doing business in your state.

·Thank you for using FINRA BrokerCheck.

For more information aboutFINRA, visit www.finra.org.

Using this site/information meansthat you accept the FINRABrokerCheck Terms andConditions. A complete list ofTerms and Conditions can befound at

For additional information aboutthe contents of this report, pleaserefer to the User Guidance orwww.finra.org/brokercheck. Itprovides a glossary of terms and alist of frequently asked questions,as well as additional resources.

brokercheck.finra.org


https://www.AdviserInfo.sec.gov

http://www.finra.org/Investors/ToolsCalculators/BrokerCheck/P455414


http://brokercheck.finra.org/Support/Terms

CREDIT SUISSE SECURITIES (USA)LLC

CRD# 816

SEC# 8-422

Main Office Location

11 MADISON AVENUENEW YORK, NY 10010Regulated by FINRA New York Office

Mailing Address

11 MADISON AVENUE11TH FLOORNEW YORK, NY 10010

This firm is a brokerage firm and an investmentadviser firm. For more information aboutinvestment adviser firms, visit the SEC'sInvestment Adviser Public Disclosure website at:

Business Telephone Number

212-325-2000

https://www.adviserinfo.sec.gov

Report Summary for this Firm

This report summary provides an overview of the brokerage firm. Additional information for this firm can be foundin the detailed report.

Disclosure Events

Brokerage firms are required to disclose certaincriminal matters, regulatory actions, civil judicialproceedings and financial matters in which the firm orone of its control affiliates has been involved.

Are there events disclosed about this firm? Yes

The following types of disclosures have beenreported:

Type Count

Regulatory Event 292

Civil Event 10

Arbitration 9

Firm Profile

This firm is classified as a limited liability company.

This firm was formed in Delaware on 01/17/2003.

Its fiscal year ends in December.

Firm History

Information relating to the brokerage firm's historysuch as other business names and successions(e.g., mergers, acquisitions) can be found in thedetailed report.

Firm Operations

Is this brokerage firm currently suspended with anyregulator? No

This firm conducts 20 types of businesses.

This firm is affiliated with financial or investmentinstitutions.

This firm has referral or financial arrangements withother brokers or dealers.

This firm is registered with:

• the SEC• 25 Self-Regulatory Organizations• 53 U.S. states and territories

www.finra.org/brokercheck User Guidance

1©2020 FINRA. All rights reserved. Report about CREDIT SUISSE SECURITIES (USA) LLC

https://adviserinfo.sec.gov/firm/summary/816


http://www.finra.org/brokercheck

http://www.finra.org/brokercheck_reports


This firm is classified as a limited liability company.

This firm was formed in Delaware on 01/17/2003.

CRD#

This section provides the brokerage firm's full legal name, "Doing Business As" name, business and mailingaddresses, telephone number, and any alternate name by which the firm conducts business and where such name isused.

Firm Profile

Firm Names and Locations

Its fiscal year ends in December.

CREDIT SUISSE SECURITIES (USA) LLC

SEC#

816

8-422

Main Office Location

Mailing Address

Business Telephone Number

Doing business as CREDIT SUISSE SECURITIES (USA) LLC

212-325-2000

Regulated by FINRA New York Office

11 MADISON AVENUENEW YORK, NY 10010

11 MADISON AVENUE11TH FLOORNEW YORK, NY 10010






This section provides information relating to all direct owners and executive officers of the brokerage firm.

Direct Owners and Executive Officers

Firm Profile

Position

Percentage of Ownership

Is this a public reportingcompany?

Position Start Date

Does this owner direct themanagement or policies ofthe firm?

CREDIT SUISSE (USA), INC.

SOLE MEMBER

75% or more

Yes

Domestic Entity

11/2000

Yes

Is this a domestic or foreignentity or an individual?

Legal Name & CRD# (if any):

Position



Position Start Date


BLEUSTEIN, DAVID ANDREW

GLOBAL HEAD OF SECURITIES RESEARCH

Less than 5%

No

Individual

12/2020

No

2381879



Position


Position Start Date

CHIN, BRIAN MATTHEW

BOARD MEMBER

Less than 5%

Individual

09/2016

4679495








Direct Owners and Executive Officers (continued)

Firm Profile




Less than 5%

No

Yes

Position



Position Start Date


CURRAN, RICHARD JOHN SR.

HEAD OF OPERATIONS

Less than 5%

No

Individual

04/2017

No

4136136



Position



Position Start Date


DELL'ARENA, ANTHONY JOSEPH

CHIEF COMPLIANCE OFFICER (CCO) FOR INVESTMENT ADVISER

Less than 5%

No

Individual

08/2018

No

2691702



FISKE, MARY BETH

2733944








Firm Profile

Position



Position Start Date


CHIEF COMPLIANCE OFFICER FOR THE BROKER DEALER

Less than 5%

No

Individual

08/2020

No

2733944


Position



Position Start Date


GALIETTO, PAUL REID

HEAD OF EQUITIES - TEXAS DESIGNATED OFFICER

Less than 5%

No

Individual

02/2018

No

1400597



Position


Position Start Date


KIM, JAY

CO-HEAD OF FIXED INCOME SALES & TRADING AND HEAD OF CREDIT

Less than 5%

Individual

08/2020

No

2943078









Firm Profile



No

No

Position



Position Start Date


KRAUSS, DAVID I

CHIEF RISK OFFICER

Less than 5%

No

Individual

08/2020

No

6584345



Position



Position Start Date


LALIME, CRYSTAL MARIE

GENERAL COUNSEL

Less than 5%

No

Individual

01/2019

No

5027893



LEAMON, JERRY PRESTON

Individual

6615160









Firm Profile

Position



Position Start Date


BOARD MEMBER

Less than 5%

No

Individual

04/2016

Yes


Position



Position Start Date


LUPETIN, SERGIO JOSEPH

CHIEF FINANCIAL OFFICER

Less than 5%

No

Individual

07/2018

No

1221963



Position


Position Start Date


MILLER, DAVID LAWRENCE

HEAD OF CAPITAL MARKETS & ADVISORY

Less than 5%

Individual

08/2020

No

2973313









Firm Profile



No

No

Position



Position Start Date


RICHARDS, BRUCE TILTON

BOARD MEMBER

Less than 5%

No

Individual

02/2017

Yes

4640086



Position



Position Start Date


VARVEL, ERIC MORRIS

BOARD MEMBER AND CHIEF EXECUTIVE OFFICER

Less than 5%

No

Individual

09/2016

Yes

1850251



WYNPERLE, MARY

Individual

5892462









Firm Profile

Position



Position Start Date


SECRETARY

Less than 5%

No

Individual

03/2018

No







This section provides information relating to any indirect owners of the brokerage firm.

Indirect Owners

Firm Profile

CREDIT SUISSE AG

SHAREHOLDER

CREDIT SUISSE HOLDINGS (USA), INC.

75% or more

No

Foreign Entity

02/1998

Yes



Company through whichindirect ownership isestablished

Relationship to Direct Owner

Relationship Established




CREDIT SUISSE GROUP AG

SHAREHOLDER

CREDIT SUISSE AG

75% or more

No

Foreign Entity

01/1997

Yes









CREDIT SUISSE HOLDINGS (USA), INC.


Domestic Entity









Indirect Owners (continued)

Firm Profile

SHAREHOLDER


75% or more

Yes

10/2000

Yes












Firm History

This section provides information relating to any successions (e.g., mergers, acquisitions) involving the firm.

No information reported.






Firm Operations

RegistrationsThis section provides information about the regulators (Securities and Exchange Commission (SEC), self-regulatoryorganizations (SROs), and U.S. states and territories) with which the brokerage firm is currently registered andlicensed, the date the license became effective, and certain information about the firm's SEC registration.

This firm is currently registered with the SEC, 25 SROs and 53 U.S. states and territories.

SEC Registration Questions

This firm is registered with the SEC as:

A broker-dealer:

A broker-dealer and government securities broker or dealer:

A government securities broker or dealer only:

This firm has ceased activity as a government securities broker or dealer:

Yes

Yes

No

No

Federal Regulator Status Date Effective

SEC Approved 01/01/1936

Self-Regulatory Organization Status Date Effective

FINRA Approved 10/16/1936

BOX Exchange LLC Approved 05/07/2012

Cboe BYX Exchange, Inc. Approved 10/01/2010

Cboe BZX Exchange, Inc. Approved 09/03/2008

Cboe C2 Exchange, Inc. Approved 10/08/2010

Cboe EDGA Exchange, Inc. Approved 05/25/2010

Cboe EDGX Exchange, Inc. Approved 05/27/2010

Cboe Exchange, Inc. Approved 05/11/1983

Investors' Exchange LLC Approved 08/15/2016

Long-Term Stock Exchange, Inc. Approved 03/12/2020

MEMX LLC Approved 07/23/2020

MIAX Emerald, LLC Approved 03/01/2019

MIAX PEARL, LLC Approved 02/06/2017

Miami International Securities Exchange,LLC

Approved 12/07/2012

NYSE American LLC Approved 02/25/1988






NYSE Arca, Inc. Approved 12/01/1971

NYSE Chicago, Inc. Approved 12/27/1971

NYSE National, Inc. Approved 05/18/2018

Nasdaq BX, Inc. Approved 01/12/2009

Nasdaq GEMX, LLC Approved 08/01/2013

Nasdaq ISE, LLC Approved 05/09/2000

Nasdaq MRX, LLC Approved 02/10/2016

Nasdaq PHLX LLC Approved 01/01/1936

Nasdaq Stock Market Approved 07/12/2006

New York Stock Exchange Approved 11/17/1982





Firm Operations

Registrations (continued)

U.S. States &Territories

Status Date Effective

Alabama Approved 10/23/1981

Alaska Approved 05/28/1986

Arizona Approved 11/18/1980

Arkansas Approved 02/15/1983

California Approved 02/03/2003

Colorado Approved 02/01/1983

Connecticut Approved 07/01/1932

Delaware Approved 10/06/1981

District of Columbia Approved 04/21/1983

Florida Approved 05/13/1983

Georgia Approved 09/21/1981

Hawaii Approved 08/23/1971

Idaho Approved 06/27/1986

Illinois Approved 07/01/1942

Indiana Approved 10/20/1981

Iowa Approved 07/14/1983

Kansas Approved 08/27/1985

Kentucky Approved 07/16/1982

Louisiana Approved 04/20/1983

Maine Approved 02/08/1984

Maryland Approved 10/03/1981

Massachusetts Approved 07/31/1981

Michigan Approved 02/02/1983

Minnesota Approved 07/15/1982

Mississippi Approved 10/14/1981

Missouri Approved 07/15/1983

Montana Approved 10/03/1986

Nebraska Approved 10/08/1981

Nevada Approved 06/10/1985

New Hampshire Approved 02/02/1983

New Jersey Approved 07/12/1983

New Mexico Approved 10/07/1981

New York Approved 01/03/1984

U.S. States &Territories

Status Date Effective

North Carolina Approved 07/15/1982

North Dakota Approved 06/28/1985

Ohio Approved 01/13/1997

Oklahoma Approved 06/11/1985

Oregon Approved 10/24/1981

Pennsylvania Approved 07/14/1932

Puerto Rico Approved 09/01/1984

Rhode Island Approved 02/01/1983

South Carolina Approved 02/07/1977

South Dakota Approved 01/07/1986

Tennessee Approved 08/17/1981

Texas Approved 07/22/1983

Utah Approved 10/10/1985

Vermont Approved 02/13/1984

Virgin Islands Approved 05/10/2005

Virginia Approved 06/05/1985

Washington Approved 04/20/1983

West Virginia Approved 09/30/1981

Wisconsin Approved 09/11/1940

Wyoming Approved 05/23/1986






Firm Operations

Types of BusinessThis section provides the types of business, including non-securities business, the brokerage firm is engaged in orexpects to be engaged in.

Other Types of Business

This firm does effect transactions in commodities, commodity futures, or commodity options.This firm does engage in other non-securities business.

This firm currently conducts 20 types of businesses.

Types of Business

Exchange member engaged in exchange commission business other than floor activities

Exchange member engaged in floor activities

Broker or dealer making inter-dealer markets in corporation securities over-the-counter

Broker or dealer retailing corporate equity securities over-the-counter

Broker or dealer selling corporate debt securities

Underwriter or selling group participant (corporate securities other than mutual funds)

Mutual fund retailer

U S. government securities dealer

U S. government securities broker

Municipal securities dealer

Municipal securities broker

Broker or dealer selling variable life insurance or annuities

Put and call broker or dealer or option writer

Investment advisory services

Trading securities for own account

Private placements of securities

Broker or dealer selling interests in mortgages or other receivables

Broker or dealer involved in a networking, kiosk or similar arrangment with a: bank, savings bank or association, orcredit union

Broker or dealer involved in a networking, kiosk or similar arrangment with a: insurance company or agency

Other - REGISTRANT TRADES,BLCK POSITIONS,MAKES MRKTS,HANDLES CUST ORDERS IN FGRN ANDDOMESTIC EQTY SEC AND IN CORP/SOVEREIGN DEBT SEC AND RELATED DRVTS. THE REGISTRANTFURNISHES ITS CUST ECONOMIC AND SEC RESEARCH. REGISTRANT PROVIDES INVESTMENTBANKING,CAPITAL RAISING AND ADVISORY SERV,INCLUDING FINANCIAL PLANNING,M&A,RE-ORG/RECAPITALIZATION,PROJECT FINANCE,COMMERCIAL PAPER ISSUANCE,UNDERWRITING,EXCHANGEOF SEC AND PRIVATE PLACEMENT,FOR FRGN AND DOMESTIC PUBLIC AND PRIVATE ISSUERS.






This firm does effect transactions in commodities, commodity futures, or commodity options.This firm does engage in other non-securities business.

Non-Securities Business Description: REGISTRANT ARRANGES FOR CUSTOMERS TO ENTER INTO FOREIGNEXCHANGE TRANSACTIONS WITH CREDIT SUISSE SECURITIES (USA)LLC, CREDIT SUISSE INTERNATIONAL, PERSHING, OR CREDIT SUISSELONDON BRANCH, INCLUDING SPOTS, FORWARDS, SWAPS, ANDOPTIONS. REGISTRANT TRADES MORTGAGES. REGISTRANT ENGAGESIN FINANCIAL PLANNING AND OPERATES PROJECT FINANCE ANDCOMMERCIAL PAPER BUSINESES. REGISTRANT HANDLES CUSTOMERORDERS IN FINANCIAL FUTURES AND TRADES FINANCIAL FUTURESFOR ITS OWN ACCOUNT.





Firm Operations

Clearing Arrangements

This firm does hold or maintain funds or securities or provide clearing services for other broker-dealer(s).

Introducing Arrangements

This firm does refer or introduce customers to other brokers and dealers.

Name: PERSHING LLC

Business Address: ONE PERSHING PLAZAJERSEY CITY, NJ 07399

CRD #: 7560

Effective Date: 05/01/2003

Description: THE APPLICANT HAS ENTERED INTO A FULLY DISCLOSED CLEARINGAND CUSTODY AGREEMENT WITH PERSHING LLC, PURSUANT TOWHICH PERSHING LLC CLEARS AND CARRIES ACCOUNTSINTRODUCED TO IT BY APPLICANT, AND PERFORMS CERTAIN OTHERSERVICES FOR THOSE ACCOUNTS, INCLUDING, BUT NOT LIMITED TO,MAINTAINING CERTAIN RELATED BOOKS AND RECORDS.






Firm Operations

Industry Arrangements

This firm does have books or records maintained by a third party.

This firm does not have accounts, funds, or securities maintained by a third party.

This firm does have customer accounts, funds, or securities maintained by a third party.

This firm does not have individuals who control its management or policies through agreement.

This firm does not have individuals who wholly or partly finance the firm's business.

Control Persons/Financing

Name: PERSHING LLC


CRD #: 7560



Name: PERSHING LLC


CRD #: 7560








Firm Operations

Organization AffiliatesThis section provides information on control relationships the firm has with other firms in the securities, investmentadvisory, or banking business.

This firm is, directly or indirectly:

· in control of· controlled by· or under common control withthe following partnerships, corporations, or other organizations engaged in the securities or investmentadvisory business.

No

Yes

No

05/21/1986


ASSET BACKED SECURITIES CORP is under common control with the firm.

ASSET BACKED SECURITIES CORP AND CREDIT SUISSE SECURITIES (USA)LLC ARE BOTH INDIRECTLY OWNED BY CREDIT SUISSE GROUP AG, THEULTIMATE PARENT

Description:

Investment AdvisoryActivities:

Securities Activities:

Country:

Foreign Entity:

Effective Date:

Business Address:

No

Yes

No

11/03/2000


CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP is under common control with the firm.

CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP ANDCREDIT SUISSE SECURITIES (USA) LLC ARE BOTH INDIRECTLY OWNED BYCREDIT SUISSE GROUP AG, THE ULTIMATE PARENT

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:






Firm Operations

Organization Affiliates (continued)

No

Yes

No

11/03/2000


DLJ MORTGAGE CAPITAL, INC. is under common control with the firm.

DLJ MORTGAGE CAPITAL, INC. AND CREDIT SUISSE SECURITIES (USA) LLCARE BOTH INDIRECTLY OWNED BY CREDIT SUISSE GROUP AG, THEULTIMATE PARENT

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

No

Yes

No

04/14/1988


CREDIT SUISSE FIRST BOSTON MORTGAGE ACCEPTANCE CORP is under common control with the firm.

CREDIT SUISSE FIRST BOSTON MORTGAGE ACCEPTANCE CORP ANDCREDIT SUISSE SECURITIES (USA) LLC ARE BOTH INDIRECTLY OWNED BYCREDIT SUISSE GROUP AG, THE ULTIMATE PARENT

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

Yes

No

08/18/2009


151470

CREDIT SUISSE PRIME SECURITIES SERVICES (USA) LLC is under common control with the firm.


Country:

Foreign Entity:

Effective Date:

Business Address:

CRD #:






Firm Operations


No

Yes

APPLICANT UNDER COMMON CONTROLDescription:



No

Yes

No

10/09/2000


CREDIT SUISSE (USA), INC. is under common control with the firm.

CREDIT SUISSE (USA), INC., DIRECTLY OWNS APPLICANT AND ISINDIRECTLY OWNED BY CSG, THE ULTIMATE PARENT OF THE APPLICANT.

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

No

Yes

UNITED STATES

No

08/01/2000


103821

CREDIT SUISSE CAPITAL LLC is under common control with the firm.

CREDIT SUISSE CAPITAL LLC, A REGISTERED SEC BROKER-DEALER, ISINDIRECTLY OWNED BY CSG, THE ULTIMATE PARENT

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

CRD #:

BEAUFORT HOUSELONDON, UNITED KINGDOM EC3A 7JJ

113463

CREDIT SUISSE ASSET MANAGEMENT LIMITED is under common control with the firm.

Business Address:

CRD #:






Firm Operations


Yes

No

UNITED KINGDOM

Yes

04/07/1997

BEAUFORT HOUSELONDON, UNITED KINGDOM EC3A 7JJ

CREDIT SUISSE ASSET MANAGEMENT LIMITED, A REGISTEREDINVESTMENT ADVISOR, IS 100% OWNED BY CREDIT SUISSE THROUGHCREDIT SUISSE ASSET MANAGEMENT (UK) HOLDINGS LTD.

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

Yes

No

No

07/06/1999


106012

CREDIT SUISSE ASSET MANAGEMENT, LLC is under common control with the firm.

CREDIT SUISSE ASSET MANAGEMENT, LLC (CSAM, LLC), A REGISTEREDINVESTMENT ADVISOR IS INDIRECTLY OWNED BY CSG, THE ULTIMATEPARENT.

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

CRD #:

This firm is directly or indirectly, controlled by the following:

· bank holding company· national bank· state member bank of the Federal Reserve System· state non-member bank· savings bank or association· credit union· or foreign bank

Business Address:

CREDIT SUISSE INTERNATIONAL is a Foreign Bank and controls the firm.

ONE CABOT SQUARELONDON, UNITED KINGDOM E14 4QJ






Firm Operations


Effective Date:

Business Address:

Description: CREDIT SUISSE INTERNATIONAL, (KNOWN UNTIL MARCH 27, 2000 ASCREDIT SUISSE FINANCIAL PRODUCTS) ("CSFP") OWNS 100% OF THESHARES OF CREDIT SUISSE INTERNATIONAL(USA), INC., A HOLDINGCOMPANY NOT ENGAGED IN THE SECURITIES OR INVESTMENT ADVISORYBUSINESS. CSI IS AN UNLIMITED COMPANY ORGANIZED UNDER THE LAWSOF ENGLAND AND WALES. IT IS AN AUTHORIZED INSTITUTION UNDER THEBANKING ACT 0F 1987 AND REGULATED BY THE SFA.

02/18/1993

ONE CABOT SQUARELONDON, UNITED KINGDOM E14 4QJ

Effective Date:

Business Address:

Description: CREDIT SUISSE GROUP AG("CSG") IS THE TOP HOLDING COMPANY IN THEGLOBAL ORGANIZATION. THE GROUP INDIRECTLY AND DIRECTLY OWNSVARIOUS COMPANIES, THE MAJOR SUBSIDIARY BEING CREDIT SUISSE. ITIS THROUGH THIS COMPANY THAT CSG PRIMARILY CONDUCTS ITSFINANCIAL SERVICES BUSINESS.

CREDIT SUISSE GROUP AG is a Bank Holding Company and controls the firm.

04/07/1997

PARADEPLATZ 88001ZURICH, SWITZERLAND 8001

Effective Date:

Business Address:

Description: CREDIT SUISSE, A SWISS BANK (NAMED CREDIT SUISSE FIRST BOSTONPRIOR TO MAY 13, 2005), IS 100% OWNED BY CREDIT SUISSE GROUP.CREDIT SUISSE OWNS A 100% ECONOMIC INTEREST IN CREDIT SUISSEHOLDINGS (USA), INC., AS WELL AS 57% OF THE VOTING STOCK. (THEOTHER 43% IS OWNED BY CSG).

CREDIT SUISSE AG is a Foreign Bank and controls the firm.

04/17/1997

UETLIBERGSTRASSE 231CH-8070ZURICH, SWITZERLAND 8070






Disclosure Events

All firms registered to sell securities or provide investment advice are required to disclose regulatory actions, criminal orcivil judicial proceedings, and certain financial matters in which the firm or one of its control affiliates has been involved.For your convenience, below is a matrix of the number and status of disclosure events involving this brokerage firm orone of its control affiliates. Further information regarding these events can be found in the subsequent pages of thisreport.

Final On AppealPending

Regulatory Event 0 292 0

Civil Event 6 4 0

Arbitration N/A 9 N/A






Disclosure Event Details

What you should know about reported disclosure events:

1. BrokerCheck provides details for any disclosure event that was reported in CRD. It also includessummary information regarding FINRA arbitration awards in cases where the brokerage firm wasnamed as a respondent.

2. Certain thresholds must be met before an event is reported to CRD, for example: o A law enforcement agency must file formal charges before a brokerage firm is required to disclose a

particular criminal event.3. Disclosure events in BrokerCheck reports come from different sources:

o Disclosure events for this brokerage firm were reported by the firm and/or regulators. When the firmand a regulator report information for the same event, both versions of the event will appear in theBrokerCheck report. The different versions will be separated by a solid line with the reporting sourcelabeled.

4. There are different statuses and dispositions for disclosure events: o A disclosure event may have a status of pending, on appeal, or final.

§ A "pending" event involves allegations that have not been proven or formally adjudicated.§ An event that is "on appeal" involves allegations that have been adjudicated but are currently

being appealed.§ A "final" event has been concluded and its resolution is not subject to change.

o A final event generally has a disposition of adjudicated, settled or otherwise resolved.§ An "adjudicated" matter includes a disposition by (1) a court of law in a criminal or civil matter,

or (2) an administrative panel in an action brought by a regulator that is contested by the partycharged with some alleged wrongdoing.

§ A "settled" matter generally involves an agreement by the parties to resolve the matter.Please note that firms may choose to settle customer disputes or regulatory matters forbusiness or other reasons.

§ A "resolved" matter usually involves no payment to the customer and no finding ofwrongdoing on the part of the individual broker. Such matters generally involve customerdisputes.

5. You may wish to contact the brokerage firm to obtain further information regarding any of thedisclosure events contained in this BrokerCheck report.

Regulatory - Final

This type of disclosure event involves (1) a final, formal proceeding initiated by a regulatory authority (e.g., a statesecurities agency, self-regulatory organization, federal regulator such as the U.S. Securities and Exchange Commission,foreign financial regulatory body) for a violation of investment-related rules or regulations; or (2) a revocation orsuspension of the authority of a brokerage firm or its control affiliate to act as an attorney, accountant or federalcontractor.

Disclosure 1 of 292

Reporting Source: Regulator

Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT SUBMITTED87 ERRONEOUS POSITION ADJUSTMENTS IN 20 OPTIONS SERIES ACROSS9 SYMBOLS TO THE OPTIONS CLEARING CORPORATION (OCC), INVIOLATION OF MIAX RULE 300. THE FINDINGS STATED THAT THE FIRMMADE ADJUSTMENTS TO VARIOUS OPTION SERIES POSITIONS AT THEOCC TO RECONCILE DISCREPANCIES BETWEEN ITS BOOKS ANDRECORDS AND POSITIONS OF THE FIRM AND ITS CUSTOMERS ASREPORTED TO THE OCC. THESE DISCREPANCIES WERE IDENTIFIED ONTHE FIRM'S DAILY OCC RECONCILIATION REPORT. TO CORRECT THEDISCREPANCIES, THE FIRM ENTERED ADJUSTMENTS TRANSFERRINGPOSITIONS FROM ACCOUNT TYPE "FIRM" TO ACCOUNT TYPE "CUSTOMER," OR VICE VERSA. HOWEVER, ON 87 INSTANCES, THE FIRMMISTAKENLY ENTERED THE INCORRECT ACCOUNT TYPE, I.E., FIRM ORCUSTOMER, WHEN MAKING ADJUSTMENTS TO RECONCILE THESEDISCREPANCIES. THESE ADJUSTMENTS INFLATED THE OPEN INTEREST INTHESE OPTIONS SERIES, IN AGGREGATE, BY A TOTAL OF APPROXIMATELY2 MILLION CONTRACTS. THE FINDINGS ALSO STATED THAT THE FIRMFAILED TO ADEQUATELY SUPERVISE, AND TO PROVIDE FOR APPROPRIATEWRITTEN PROCEDURES TO SUPERVISE, THE ACCURACY OF OCCADJUSTMENTS, IN VIOLATION OF MIAX RULES 500(B) AND 1308(A)(1). THEFIRM'S SUPERVISORY SYSTEM AND WSPS CONCERNING OCCADJUSTMENTS DID PROVIDE FOR A SUPERVISORY REVIEW OF ALL OCCADJUSTMENTS AFTER THEY WERE ENTERED. HOWEVER, THE FIRM'SSUPERVISORY SYSTEM AND WSPS DID NOT PROVIDE ADEQUATEGUIDANCE OR METHODOLOGY FOR REVIEWING THE ACCURACY ANDCOMPLETENESS OF OCC ADJUSTMENTS. THE FIRM'S WSPS ONLYREQUIRED THE RELEVANT REPORTS REFLECTING THE ADJUSTMENTS BEPROVIDED TO A SUPERVISOR "FOR REVIEW AND SIGN OFF." WHILE THEFIRM DID REVIEW ALL OCC ADJUSTMENTS AFTER THEY WERE ENTERED,THE FIRM ONLY DETERMINED WHETHER THE DAILY NUMBER OFADJUSTMENTS REQUIRED EQUALED THE DAILY NUMBER OFADJUSTMENTS MADE, WITHOUT REVIEWING THE ACCURACY OF THEADJUSTMENT CALCULATIONS THEMSELVES.

Current Status: Final






Initiated By: MIAMI INTERNATIONAL SECURITIES EXCHANGE, LLC

Principal Sanction(s)/ReliefSought:

Other Sanction(s)/ReliefSought:

Date Initiated: 12/18/2020

Docket/Case Number: 2017055996501

Principal Product Type: Options

Other Product Type(s):

Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT SUBMITTED87 ERRONEOUS POSITION ADJUSTMENTS IN 20 OPTIONS SERIES ACROSS9 SYMBOLS TO THE OPTIONS CLEARING CORPORATION (OCC), INVIOLATION OF MIAX RULE 300. THE FINDINGS STATED THAT THE FIRMMADE ADJUSTMENTS TO VARIOUS OPTION SERIES POSITIONS AT THEOCC TO RECONCILE DISCREPANCIES BETWEEN ITS BOOKS ANDRECORDS AND POSITIONS OF THE FIRM AND ITS CUSTOMERS ASREPORTED TO THE OCC. THESE DISCREPANCIES WERE IDENTIFIED ONTHE FIRM'S DAILY OCC RECONCILIATION REPORT. TO CORRECT THEDISCREPANCIES, THE FIRM ENTERED ADJUSTMENTS TRANSFERRINGPOSITIONS FROM ACCOUNT TYPE "FIRM" TO ACCOUNT TYPE "CUSTOMER," OR VICE VERSA. HOWEVER, ON 87 INSTANCES, THE FIRMMISTAKENLY ENTERED THE INCORRECT ACCOUNT TYPE, I.E., FIRM ORCUSTOMER, WHEN MAKING ADJUSTMENTS TO RECONCILE THESEDISCREPANCIES. THESE ADJUSTMENTS INFLATED THE OPEN INTEREST INTHESE OPTIONS SERIES, IN AGGREGATE, BY A TOTAL OF APPROXIMATELY2 MILLION CONTRACTS. THE FINDINGS ALSO STATED THAT THE FIRMFAILED TO ADEQUATELY SUPERVISE, AND TO PROVIDE FOR APPROPRIATEWRITTEN PROCEDURES TO SUPERVISE, THE ACCURACY OF OCCADJUSTMENTS, IN VIOLATION OF MIAX RULES 500(B) AND 1308(A)(1). THEFIRM'S SUPERVISORY SYSTEM AND WSPS CONCERNING OCCADJUSTMENTS DID PROVIDE FOR A SUPERVISORY REVIEW OF ALL OCCADJUSTMENTS AFTER THEY WERE ENTERED. HOWEVER, THE FIRM'SSUPERVISORY SYSTEM AND WSPS DID NOT PROVIDE ADEQUATEGUIDANCE OR METHODOLOGY FOR REVIEWING THE ACCURACY ANDCOMPLETENESS OF OCC ADJUSTMENTS. THE FIRM'S WSPS ONLYREQUIRED THE RELEVANT REPORTS REFLECTING THE ADJUSTMENTS BEPROVIDED TO A SUPERVISOR "FOR REVIEW AND SIGN OFF." WHILE THEFIRM DID REVIEW ALL OCC ADJUSTMENTS AFTER THEY WERE ENTERED,THE FIRM ONLY DETERMINED WHETHER THE DAILY NUMBER OFADJUSTMENTS REQUIRED EQUALED THE DAILY NUMBER OFADJUSTMENTS MADE, WITHOUT REVIEWING THE ACCURACY OF THEADJUSTMENT CALCULATIONS THEMSELVES.







Resolution Date: 12/18/2020

Resolution:

Other Sanctions Ordered:

Sanction Details: THE FIRM WAS CENSURED AND FINED $115,000.

Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?

No

Sanctions Ordered: CensureMonetary/Fine $115,000.00

Other

Disclosure 2 of 292

i


Allegations: THE SECURITIES AND EXCHANGE COMMISSION ("COMMISSION") DEEMS ITAPPROPRIATE AND IN THE PUBLIC INTEREST THAT PUBLICADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BE, ANDHEREBY ARE, INSTITUTED PURSUANT TO SECTIONS 15(B) AND 21C OF THESECURITIES EXCHANGE ACT OF 1934 ("EXCHANGE ACT") AND SECTION203(E) OF THE INVESTMENT ADVISERS ACT OF 1940 ("ADVISERS ACT")AGAINST CREDIT SUISSE SECURITIES (USA) LLC ("CREDIT SUISSE" OR "RESPONDENT").

THE COMMISSION FINDS THAT THESE PROCEEDINGS ARISE OUT OFCREDIT SUISSE'S FAILURE TO SUBMIT TO THE COMMISSION TRUE ANDCOMPLETE DATA IN RESPONSE TO COMMISSION STAFF ELECTRONICBLUE SHEETS ("EBS") REQUESTS, RESULTING IN THE REPORTING OF EBSTHAT WAS INCOMPLETE OR DEFICIENT.

THE COMMISSION STAFF ROUTINELY SENDS REQUESTS FOR SECURITIESTRADING RECORDS TO MARKET MAKERS, BROKERS AND/OR CLEARINGFIRMS IN ORDER TO IDENTIFY BUYERS AND SELLERS OF SECURITIES,AND FIRMS PROVIDE THE REQUESTED RECORDS IN A UNIVERSALELECTRONIC FORMAT KNOWN AS THE EBS FORMAT. IT IS A FUNDAMENTALOBLIGATION OF BROKER-DEALERS TO PROVIDE COMPLETE ANDACCURATE EBS DATA WHEN REQUESTED BY REPRESENTATIVES OF THECOMMISSION TO DO SO. THE SUBMISSION OF COMPLETE AND ACCURATEBLUE SHEET DATA IS CRITICAL TO MANY ASPECTS OF THE COMMISSION'SOPERATIONS AND ITS ABILITY TO DISCHARGE ITS ENFORCEMENT ANDREGULATORY MANDATES. THE FAILURE OF A BROKER-DEALER TOPROVIDE COMPLETE AND ACCURATE EBS INFORMATION IN RESPONSE TOA COMMISSION REQUEST CAN IMPACT THE COMMISSION'S ABILITY TODISCHARGE ITS STATUTORY OBLIGATIONS, UNDERMINE THE INTEGRITYOF ITS INVESTIGATIONS AND EXAMINATIONS, AND ULTIMATELY INTERFEREWITH THE COMMISSION'S ABILITY TO PROTECT INVESTORS.

FROM MARCH 16, 2015 THROUGH MARCH 11, 2019, (THE "RELEVANTPERIOD"), CREDIT SUISSE SUBMITTED 135 FIXED-INCOME EBS TO THECOMMISSION, NEARLY HALF OF WHICH WERE DEFICIENT IN ONE ORMORE WAYS, RESULTING IN THE MISREPORTING OF TRADE DATA FOR2,460 TRANSACTIONS. AS A RESULT, CREDIT SUISSE VIOLATED THERECORDKEEPING AND REPORTING REQUIREMENTS OF SECTION 17(A)(1)OF THE EXCHANGE ACT AND RULES 17A-4(J) AND 17A-25 THEREUNDER.

SECTION 17 OF THE EXCHANGE ACT IMPOSES ON BROKER-DEALERSRECORDKEEPING AND REPORTING REQUIREMENTS THAT ARE ESSENTIALTO THE COMMISSION'S ABILITY TO ENFORCE THE FEDERAL SECURITIESLAWS AND TO PROTECT INVESTORS. TO ENSURE THE CONTINUEDEFFECTIVENESS OF THE COMMISSION'S ENFORCEMENT ANDREGULATORY PROGRAMS, BROKER-DEALERS MUST COMPLY WITH,AMONG OTHER THINGS: RULE 17A-25, REQUIRING THAT BROKER-DEALERS SUBMIT ELECTRONICALLY SECURITIES TRANSACTIONINFORMATION UPON REQUEST BY THE COMMISSION; AND RULE 17A-4(J),REQUIRING BROKER-DEALERS TO FURNISH PROMPTLY LEGIBLE, TRUE,COMPLETE, AND CURRENT COPIES OF REQUIRED RECORDS UPONREQUEST BY A REPRESENTATIVE OF THE COMMISSION. CREDIT SUISSEFAILED TO COMPLY WITH THESE REQUIREMENTS.







Initiated By: UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Cease and Desist



Docket/Case Number: 3-20040

Principal Product Type: No Product


THE SECURITIES AND EXCHANGE COMMISSION ("COMMISSION") DEEMS ITAPPROPRIATE AND IN THE PUBLIC INTEREST THAT PUBLICADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BE, ANDHEREBY ARE, INSTITUTED PURSUANT TO SECTIONS 15(B) AND 21C OF THESECURITIES EXCHANGE ACT OF 1934 ("EXCHANGE ACT") AND SECTION203(E) OF THE INVESTMENT ADVISERS ACT OF 1940 ("ADVISERS ACT")AGAINST CREDIT SUISSE SECURITIES (USA) LLC ("CREDIT SUISSE" OR "RESPONDENT").

THE COMMISSION FINDS THAT THESE PROCEEDINGS ARISE OUT OFCREDIT SUISSE'S FAILURE TO SUBMIT TO THE COMMISSION TRUE ANDCOMPLETE DATA IN RESPONSE TO COMMISSION STAFF ELECTRONICBLUE SHEETS ("EBS") REQUESTS, RESULTING IN THE REPORTING OF EBSTHAT WAS INCOMPLETE OR DEFICIENT.

THE COMMISSION STAFF ROUTINELY SENDS REQUESTS FOR SECURITIESTRADING RECORDS TO MARKET MAKERS, BROKERS AND/OR CLEARINGFIRMS IN ORDER TO IDENTIFY BUYERS AND SELLERS OF SECURITIES,AND FIRMS PROVIDE THE REQUESTED RECORDS IN A UNIVERSALELECTRONIC FORMAT KNOWN AS THE EBS FORMAT. IT IS A FUNDAMENTALOBLIGATION OF BROKER-DEALERS TO PROVIDE COMPLETE ANDACCURATE EBS DATA WHEN REQUESTED BY REPRESENTATIVES OF THECOMMISSION TO DO SO. THE SUBMISSION OF COMPLETE AND ACCURATEBLUE SHEET DATA IS CRITICAL TO MANY ASPECTS OF THE COMMISSION'SOPERATIONS AND ITS ABILITY TO DISCHARGE ITS ENFORCEMENT ANDREGULATORY MANDATES. THE FAILURE OF A BROKER-DEALER TOPROVIDE COMPLETE AND ACCURATE EBS INFORMATION IN RESPONSE TOA COMMISSION REQUEST CAN IMPACT THE COMMISSION'S ABILITY TODISCHARGE ITS STATUTORY OBLIGATIONS, UNDERMINE THE INTEGRITYOF ITS INVESTIGATIONS AND EXAMINATIONS, AND ULTIMATELY INTERFEREWITH THE COMMISSION'S ABILITY TO PROTECT INVESTORS.

FROM MARCH 16, 2015 THROUGH MARCH 11, 2019, (THE "RELEVANTPERIOD"), CREDIT SUISSE SUBMITTED 135 FIXED-INCOME EBS TO THECOMMISSION, NEARLY HALF OF WHICH WERE DEFICIENT IN ONE ORMORE WAYS, RESULTING IN THE MISREPORTING OF TRADE DATA FOR2,460 TRANSACTIONS. AS A RESULT, CREDIT SUISSE VIOLATED THERECORDKEEPING AND REPORTING REQUIREMENTS OF SECTION 17(A)(1)OF THE EXCHANGE ACT AND RULES 17A-4(J) AND 17A-25 THEREUNDER.

SECTION 17 OF THE EXCHANGE ACT IMPOSES ON BROKER-DEALERSRECORDKEEPING AND REPORTING REQUIREMENTS THAT ARE ESSENTIALTO THE COMMISSION'S ABILITY TO ENFORCE THE FEDERAL SECURITIESLAWS AND TO PROTECT INVESTORS. TO ENSURE THE CONTINUEDEFFECTIVENESS OF THE COMMISSION'S ENFORCEMENT ANDREGULATORY PROGRAMS, BROKER-DEALERS MUST COMPLY WITH,AMONG OTHER THINGS: RULE 17A-25, REQUIRING THAT BROKER-DEALERS SUBMIT ELECTRONICALLY SECURITIES TRANSACTIONINFORMATION UPON REQUEST BY THE COMMISSION; AND RULE 17A-4(J),REQUIRING BROKER-DEALERS TO FURNISH PROMPTLY LEGIBLE, TRUE,COMPLETE, AND CURRENT COPIES OF REQUIRED RECORDS UPONREQUEST BY A REPRESENTATIVE OF THE COMMISSION. CREDIT SUISSEFAILED TO COMPLY WITH THESE REQUIREMENTS.

Resolution: Order 29©2020 FINRA. All rights reserved. Report about CREDIT SUISSE SECURITIES (USA) LLC






Resolution:


Sanction Details: CREDIT SUISSE IS CENSURED; ORDERED TO CEASE AND DESIST FROMCOMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONSOF SECTION 17(A)(1) OF THE EXCHANGE ACT AND RULES 17A-4(J) AND17A-25 PROMULGATED THEREUNDER; AND SHALL PAY A CIVIL MONEYPENALTY OF $600,000 TO THE COMMISSION.

Regulator Statement RESPONDENT CREDIT SUISSE HAS SUBMITTED AN OFFER OFSETTLEMENT, THAT THE COMMISSION HAS DETERMINED TO ACCEPT.CREDIT SUISSE WILLFULLY VIOLATED THE RECORDKEEPING ANDREPORTING REQUIREMENTS OF SECTION 17(A)(1) OF THE EXCHANGE ACTAND RULE 17A-4(J) THEREUNDER BY FAILING TO FURNISH PROMPTLYTRUE AND COMPLETE TRADING INFORMATION AS REQUESTED BYCOMMISSION STAFF OVER A PERIOD OF APPROXIMATELY FOUR YEARS. INADDITION, CREDIT SUISSE WILLFULLY VIOLATED EXCHANGE ACT RULE17A-25 BY FAILING TO SUBMIT ELECTRONICALLY CERTAIN SECURITIESTRANSACTION INFORMATION TO THE COMMISSION THROUGH THE EBSSYSTEM IN RESPONSE TO REQUESTS MADE BY THE COMMISSION.ACCORDINGLY, IT IS HEREBY ORDERED THAT THE CREDIT SUISSE CEASEAND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANYFUTURE VIOLATIONS OF SECTION 17(A)(1) OF THE EXCHANGE ACT ANDRULES 17A-4(J) AND 17A-25 PROMULGATED THEREUNDER; IS CENSURED;AND SHALL PAY A CIVIL MONEY PENALTY OF $600,000 TO THECOMMISSION.


Yes

Sanctions Ordered: CensureMonetary/Fine $600,000.00Cease and Desist/Injunction

Order

iReporting Source: Firm

Allegations: THE SECURITIES AND EXCHANGE COMMISSION ("SEC") ALLEGED THATFROM MARCH 15, 2015 THROUGH MARCH 11, 2019, CREDIT SUISSESECURITIES (USA) LLC ("CSSU") VIOLATED SECTION 17(A)(1) OF THEEXCHANGE ACT AND RULES 17A-4(J), AND 17A-25, BY FAILING TO SUBMITTO THE COMMISSION TRUE AND COMPLETE DATA IN RESPONSE TOCOMMISSION STAFF ELECTRONIC BLUE SHEETS ("EBS") REQUESTS,RESULTING IN THE REPORTING OF EBS THAT WAS INCOMPLETE ORDEFICIENT. THE SEC ALLEGED THAT CSSU SUBMITTED 135 FIXED-INCOMEEBS TO THE COMMISSION, NEARLY HALF OF WHICH WERE DEFICIENT INONE OR MORE WAYS, RESULTING IN THE REPORTING OF DEFICIENT DATAFOR 2,460 TRANSACTIONS.







Initiated By: SECURITIES AND EXCHANGE COMMISSION


Civil and Administrative Penalt(ies) /Fine(s)


CENSURE;CEASE AND DESIST


Docket/Case Number: FILE NO. 3-20040



THE SECURITIES AND EXCHANGE COMMISSION ("SEC") ALLEGED THATFROM MARCH 15, 2015 THROUGH MARCH 11, 2019, CREDIT SUISSESECURITIES (USA) LLC ("CSSU") VIOLATED SECTION 17(A)(1) OF THEEXCHANGE ACT AND RULES 17A-4(J), AND 17A-25, BY FAILING TO SUBMITTO THE COMMISSION TRUE AND COMPLETE DATA IN RESPONSE TOCOMMISSION STAFF ELECTRONIC BLUE SHEETS ("EBS") REQUESTS,RESULTING IN THE REPORTING OF EBS THAT WAS INCOMPLETE ORDEFICIENT. THE SEC ALLEGED THAT CSSU SUBMITTED 135 FIXED-INCOMEEBS TO THE COMMISSION, NEARLY HALF OF WHICH WERE DEFICIENT INONE OR MORE WAYS, RESULTING IN THE REPORTING OF DEFICIENT DATAFOR 2,460 TRANSACTIONS.


Resolution:


Sanction Details: THE SEC IMPOSED A FINE OF $600,000 ON THE FIRM.

Firm Statement CREDIT SUISSE SHALL, WITHIN TEN (10) DAYS OF THE ENTRY OF THESEPTEMBER 22, 2020 ORDER, PAY A CIVIL MONEY PENALTY IN THEAMOUNT OF $600,000 TO THE SECURITIES AND EXCHANGE COMMISSIONFOR TRANSFER TO THE GENERAL FUND OF THE UNITED STATESTREASURY, SUBJECT TO EXCHANGE ACT SECTION 21F(G)(3). THENECESSARY FUNDS HAVE ALREADY BEEN PLACED IN ESCROW WITHCOUNSEL WHO WILL BE TRANSFERRING THE FUNDS DIRECTLY TO THESEC WITHIN THE 10 DAY WINDOW.


Order

Disclosure 3 of 292

i


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOESTABLISH AND MAINTAIN WSPS AND A SUPERVISORY SYSTEMAPPLICABLE TO ITS HI-TOUCH OPTIONS DESK THAT WERE REASONABLYDESIGNED TO ASSURE COMPLIANCE WITH THE RECORDKEEPINGPROVISIONS OF THE FEDERAL SECURITIES LAWS AND ISE RULES THATREQUIRE THE ACCURATE DOCUMENTATION OF THE ORDER RECEIPT ANDTRANSMISSION TIMES OF OPTIONS ORDERS. THE FIRM'S WSPS ANDSUPERVISORY SYSTEM DID NOT (I) SPECIFY WHAT DATA ELEMENTS,INCLUDING TIMESTAMPS, MUST BE INCLUDED IN ITS DAILY SUPERVISORYREVIEW OF CUSTOMER ORDER TICKERS, OR WHETHER SUCH DATAELEMENTS WERE TO BE REVIEWED FOR ACCURACY ANDCOMPLETENESS; (II) PROVIDE FOR DOCUMENTATION OF ITS DAILYREVIEW, OR ESCALATION AND REMEDIATION OF ANY ORDER TICKET-RELATED INACCURACIES IDENTIFIED; OR (III) SUFFICIENTLY MONITOR THEFIRM'S CONNECTION TO FLOOR BROKERS TO ENSURE THAT THECONNECTIONS ACCURATELY AND COMPLETELY CAPTURED RELEVANTORDER TICKET INFORMATION FOR MANUALLY EXECUTED OPTIONSORDERS SENT TO THOSE FLOOR BROKERS.







Initiated By: NASDAQ ISE, LLC







Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOESTABLISH AND MAINTAIN WSPS AND A SUPERVISORY SYSTEMAPPLICABLE TO ITS HI-TOUCH OPTIONS DESK THAT WERE REASONABLYDESIGNED TO ASSURE COMPLIANCE WITH THE RECORDKEEPINGPROVISIONS OF THE FEDERAL SECURITIES LAWS AND ISE RULES THATREQUIRE THE ACCURATE DOCUMENTATION OF THE ORDER RECEIPT ANDTRANSMISSION TIMES OF OPTIONS ORDERS. THE FIRM'S WSPS ANDSUPERVISORY SYSTEM DID NOT (I) SPECIFY WHAT DATA ELEMENTS,INCLUDING TIMESTAMPS, MUST BE INCLUDED IN ITS DAILY SUPERVISORYREVIEW OF CUSTOMER ORDER TICKERS, OR WHETHER SUCH DATAELEMENTS WERE TO BE REVIEWED FOR ACCURACY ANDCOMPLETENESS; (II) PROVIDE FOR DOCUMENTATION OF ITS DAILYREVIEW, OR ESCALATION AND REMEDIATION OF ANY ORDER TICKET-RELATED INACCURACIES IDENTIFIED; OR (III) SUFFICIENTLY MONITOR THEFIRM'S CONNECTION TO FLOOR BROKERS TO ENSURE THAT THECONNECTIONS ACCURATELY AND COMPLETELY CAPTURED RELEVANTORDER TICKET INFORMATION FOR MANUALLY EXECUTED OPTIONSORDERS SENT TO THOSE FLOOR BROKERS.


Resolution:



No


Acceptance, Waiver & Consent(AWC)






Sanction Details: THE FIRM WAS CENSURED AND FINED $90,000, OF WHICH $3,000 SHALL BEPAID TO ISE. THE BALANCE OF THE FINE SHALL BE PAID TO NYSEAMERICAN LLC, NYSE ARCA, INC., AND NASDAQ PHLX LLC. ACCEPTANCEOF THE AWC IS CONDITIONED UPON ACCEPTANCE OF SIMILARSETTLEMENT AGREEMENTS IN RELATED MATTERS BETWEEN THE FIRMAND NYSE AMERICAN LLC, NYSE ARCA, INC., AND NASDAQ PHLX LLC.


Initiated By: NASDAQ ISE, LLC







Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT THE FIRMS'SWSPS AND SUPERVISORY SYSTEM APPLICABLE TO THE HANDLING OFMANUAL OPTIONS ORDERS BY ITS HI-TOUCH OPTIONS DESK WERE NOTREASONABLY DESIGNED TO ENSURE COMPLIANCE WITH THE APPLICABLERECORDKEEPING PROVISIONS OF THE FEDERAL SECURITIES LAWS ANDNASDAQ ISE RULES.



Resolution:





Disclosure 4 of 292

i







Initiated By: NASDAQ PHLX LLC







Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOACCURATELY RECORD THE ORDER RECEIPT AND ORDER TRANSMISSIONTIMES OF MANUAL OPTIONS ORDERS IT HAD ROUTED TO FLOORBROKERS AT PHLX AND VARIOUS OTHER NATIONAL SECURITIESEXCHANGES FOR EXECUTION. THE FIRM'S WSPS AND SUPERVISORYSYSTEM APPLICABLE TO THE HANDLING OF MANUAL OPTIONS ORDERSBY ITS HI-TOUCH OPTIONS DESK WERE NOT REASONABLY DESIGNED TOACHIEVE COMPLIANCE WITH, AND TO DETECT AND PREVENT, INSOFAR ASPRACTICABLE, VIOLATIONS OF, THE APPLICABLE RECORDKEEPINGPROVISIONS OF THE FEDERAL SECURITIES LAWS AND PHLX RULES.



Resolution:


Sanction Details: THE FIRM WAS CENSURED AND FINED $90,000, OF WHICH $29,000 SHALLBE PAID TO PHLX. THE BALANCE OF THE FINE SHALL BE PAID TO NYSEAMERICAN LLC, NYSE ARCA, INC. AND NASDAQ ISE, LLC. ACCEPTANCE OFTHE AWC IS CONDITIONED UPON ACCEPTANCE OF SIMILAR SETTLEMENTAGREEMENTS IN RELATED MATTERS BETWEEN THE FIRM AND NYSEAMERICAN LLC, NYSE ARCA, INC., AND NASDAQ ISE, LLC.


No







www.finra.org/brokercheck User GuidanceTHE FIRM WAS CENSURED AND FINED $90,000, OF WHICH $29,000 SHALLBE PAID TO PHLX. THE BALANCE OF THE FINE SHALL BE PAID TO NYSEAMERICAN LLC, NYSE ARCA, INC. AND NASDAQ ISE, LLC. ACCEPTANCE OFTHE AWC IS CONDITIONED UPON ACCEPTANCE OF SIMILAR SETTLEMENTAGREEMENTS IN RELATED MATTERS BETWEEN THE FIRM AND NYSEAMERICAN LLC, NYSE ARCA, INC., AND NASDAQ ISE, LLC.









Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOACCURATELY RECORD THE ORDER RECEIPT OR ORDER TRANSMISSIONTIMES FOR CERTAIN OF THE MANUAL OPTIONS ORDERS IT HAD ROUTEDTO FLOOR BROKERS AT NASDAQ PHLX FOR EXECUTION AND THAT THEFIRM'S WSPS AND SUPERVISORY SYSTEM APPLICABLE TO THE HANDLINGOF MANUAL OPTIONS ORDERS BY ITS HI-TOUCH OPTIONS DESK WERENOT REASONABLY DESIGNED TO ENSURE COMPLIANCE WITH THEAPPLICABLE RECORDKEEPING PROVISIONS OF THE FEDERALSECURITIES LAWS AND NASDAQ PHLX RULES.



Resolution:





Disclosure 5 of 292

i


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOACCURATELY RECORD THE ORDER RECEIPT AND ORDER TRANSMISSIONTIMES OF MANUAL OPTIONS ORDERS IT HAD ROUTED TO FLOORBROKERS AT NYSE AMERICAN AND VARIOUS OTHER NATIONALSECURITIES EXCHANGES FOR EXECUTION. THE FIRM'S WSPS ANDSUPERVISORY SYSTEM APPLICABLE TO THE HANDLING OF MANUALOPTIONS ORDERS BY ITS HI-TOUCH OPTIONS DESK WERE NOTREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THEAPPLICABLE RECORDKEEPING PROVISIONS OF THE FEDERALSECURITIES LAWS AND NYSE AMERICAN RULES.







Initiated By: NYSE AMERICAN LLC







Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOACCURATELY RECORD THE ORDER RECEIPT AND ORDER TRANSMISSIONTIMES OF MANUAL OPTIONS ORDERS IT HAD ROUTED TO FLOORBROKERS AT NYSE AMERICAN AND VARIOUS OTHER NATIONALSECURITIES EXCHANGES FOR EXECUTION. THE FIRM'S WSPS ANDSUPERVISORY SYSTEM APPLICABLE TO THE HANDLING OF MANUALOPTIONS ORDERS BY ITS HI-TOUCH OPTIONS DESK WERE NOTREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THEAPPLICABLE RECORDKEEPING PROVISIONS OF THE FEDERALSECURITIES LAWS AND NYSE AMERICAN RULES.


Resolution:


Sanction Details: THE FIRM WAS CENSURED AND FINED $90,000, OF WHICH $29,000 SHALLBE PAID TO NYSE AMERICAN. THE BALANCE OF THE FINE SHALL BE PAIDTO NYSE ARCA, INC., NASDAQ ISE, LLC, AND NASDAQ PHLX LLC.ACCEPTANCE OF THE AWC IS CONDITIONED UPON ACCEPTANCE OFSIMILAR SETTLEMENT AGREEMENTS IN RELATED MATTERS BETWEEN THEFIRM AND NYSE ARCA, INC., NASDAQ ISE, LLC, AND NASDAQ PHLX LLC.


No



iReporting Source:






Reporting Source: Firm








Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOACCURATELY RECORD THE ORDER TRANSMISSION TIMES OR EXCHANGEOF EXECUTION INFORMATION FOR CERTAIN OF THE MANUAL OPTIONSORDERS IT HAD ROUTED TO FLOOR BROKERS AT NYSE AMERICAN FOREXECUTION AND THAT THE FIRM'S WSPS AND SUPERVISORY SYSTEMAPPLICABLE TO THE HANDLING OF MANUAL OPTIONS ORDERS BY ITS HI-TOUCH OPTIONS DESK WERE NOT REASONABLY DESIGNED TO ENSURECOMPLIANCE WITH THE APPLICABLE RECORDKEEPING PROVISIONS OFTHE FEDERAL SECURITIES LAWS AND NYSE AMERICAN RULES.



Resolution:





Disclosure 6 of 292

i


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOACCURATELY RECORD THE ORDER RECEIPT AND ORDER TRANSMISSIONTIMES OF MANUAL OPTIONS ORDERS IT HAD ROUTED TO FLOORBROKERS AT NYSE ARCA AND VARIOUS OTHER NATIONAL SECURITIESEXCHANGES FOR EXECUTION. THE FIRM'S WSPS AND SUPERVISORYSYSTEM APPLICABLE TO THE HANDLING OF MANUAL OPTIONS ORDERSBY ITS HI-TOUCH OPTIONS DESK WERE NOT REASONABLY DESIGNED TOENSURE COMPLIANCE WITH THE APPLICABLE RECORDKEEPINGPROVISIONS OF THE FEDERAL SECURITIES LAWS AND NYSE ARCA RULES.







Initiated By: NYSE ARCA, INC.







WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOACCURATELY RECORD THE ORDER RECEIPT AND ORDER TRANSMISSIONTIMES OF MANUAL OPTIONS ORDERS IT HAD ROUTED TO FLOORBROKERS AT NYSE ARCA AND VARIOUS OTHER NATIONAL SECURITIESEXCHANGES FOR EXECUTION. THE FIRM'S WSPS AND SUPERVISORYSYSTEM APPLICABLE TO THE HANDLING OF MANUAL OPTIONS ORDERSBY ITS HI-TOUCH OPTIONS DESK WERE NOT REASONABLY DESIGNED TOENSURE COMPLIANCE WITH THE APPLICABLE RECORDKEEPINGPROVISIONS OF THE FEDERAL SECURITIES LAWS AND NYSE ARCA RULES.


Resolution:


Sanction Details: THE FIRM WAS CENSURED AND FINED $90,000, OF WHICH $29,000 SHALLBE PAID TO NYSE ARCA. THE BALANCE OF THE FINE SHALL BE PAID TONYSE AMERICAN LLC, NASDAQ ISE, LLC, AND NASDAQ PHLX LLC.ACCEPTANCE OF THE AWC IS CONDITIONED UPON ACCEPTANCE OFSIMILAR SETTLEMENT AGREEMENTS IN RELATED MATTERS BETWEEN THEFIRM AND NYSE AMERICAN LLC, NASDAQ ISE, LLC, AND NASDAQ PHLXLLC.


No




Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOACCURATELY RECORD THE ORDER RECEIPT OR ORDER TRANSMISSIONTIMES OR EXCHANGE OF EXECUTION INFORMATION FOR CERTAIN OF THEMANUAL OPTIONS ORDERS IT HAD ROUTED TO FLOOR BROKERS AT NYSEARCA FOR EXECUTION AND THAT THE FIRM'S WSPS AND SUPERVISORYSYSTEM APPLICABLE TO THE HANDLING OF MANUAL OPTIONS ORDERSBY ITS HI-TOUCH OPTIONS DESK WERE NOT REASONABLY DESIGNED TOENSURE COMPLIANCE WITH THE APPLICABLE RECORDKEEPINGPROVISIONS OF THE FEDERAL SECURITIES LAWS AND NYSE ARCA RULES.














Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOACCURATELY RECORD THE ORDER RECEIPT OR ORDER TRANSMISSIONTIMES OR EXCHANGE OF EXECUTION INFORMATION FOR CERTAIN OF THEMANUAL OPTIONS ORDERS IT HAD ROUTED TO FLOOR BROKERS AT NYSEARCA FOR EXECUTION AND THAT THE FIRM'S WSPS AND SUPERVISORYSYSTEM APPLICABLE TO THE HANDLING OF MANUAL OPTIONS ORDERSBY ITS HI-TOUCH OPTIONS DESK WERE NOT REASONABLY DESIGNED TOENSURE COMPLIANCE WITH THE APPLICABLE RECORDKEEPINGPROVISIONS OF THE FEDERAL SECURITIES LAWS AND NYSE ARCA RULES.


Resolution:





Disclosure 7 of 292

i


Allegations: CREDIT SUISSE SECURITIES (USA) LLC: (I) FAILED TO RECORD ACCURATEORDER RECEIPT TIMES FOR SAMPLED MANUAL CUSTOMER OPTIONSORDERS THAT WERE ROUTED TO AND EXECUTED ON CBOE DURING THE2016 REVIEW PERIOD; (II) FAILED TO RECORD THE ORDER TRANSMISSIONTIME FOR SAMPLED MANUAL CUSTOMER OPTION ORDERS THAT WEREROUTED TO AND EXECUTED ON CBOE DURING THE 2016 REVIEW PERIOD;(III) FAILED TO RECORD THE CORRECT EXCHANGE OF EXECUTION FORSAMPLED MANUAL CUSTOMER OPTIONS ORDERS THAT WERE ROUTED TOAND EXECUTED ON CBOE DURING THE 2016 REVIEW PERIOD; (IV) FAILEDTO RECORD ACCURATE ORDER RECEIPT TIMES FOR SAMPLED MANUALCUSTOMER OPTIONS ORDERS THAT WERE ROUTED TO AND EXECUTEDON CBOE DURING THE 2017 REVIEW PERIOD; (V) FAILED TO RECORD ANACCURATE ORDER TRANSMISSION TIME FOR SAMPLED MANUALCUSTOMER OPTIONS ORDERS THAT WERE ROUTED TO AND EXECUTEDON CBOE DURING THE 2017 REVIEW PERIOD;(VI) FAILED TO RECORD THECORRECT EXCHANGE OF EXECUTION FOR SAMPLED MANUAL CUSTOMEROPTIONS ORDERS THAT WERE ROUTED TO AND EXECUTED ON CBOEDURING THE 2017 REVIEW PERIOD; (VII) FAILED TO RECORD THEACCURATE FLOOR BROKER FOR SAMPLED MANUAL CUSTOMER OPTIONSORDERS THAT WERE ROUTED TO AND EXECUTED ON CBOE DURING THE2017 REVIEW PERIOD; (VIII) FAILED TO ESTABLISH, MAINTAIN ANDENFORCE WRITTEN SUPERVISORY PROCEDURES, AND A SYSTEM FORAPPLYING SUCH PROCEDURES, REASONABLY DESIGNED TO PREVENTAND DETECT VIOLATIONS OF EXCHANGE RULE 15.1 AND SECTION 17(A)OF THE EXCHANGE ACT AND RULE 17A-3 THEREUNDER IN CONJUNCTIONWITH THE RECORDKEEPING DEFICIENCIES IDENTIFIED DURING THE 2016REVIEW PERIOD AND THE 2017 REVIEW PERIOD REFERENCED ABOVE; (IX)FAILED TO SUPERVISE ITS ASSOCIATED PERSONS TO ASSURECOMPLIANCE WITH CBOE RULE 15.1, SECTION 17(A) OF THE EXCHANGEACT AND RULE 17A-3 THEREUNDER IN CONJUNCTION WITH THECONTINUED, SIMILAR RECORDKEEPING DEFICIENCIES IDENTIFIEDDURING THE 2017 REVIEW PERIOD REFERENCED ABOVE.

VIOLATION OF CBOE RULES 4.2, 4.24 AND 15.1; SECTION 17(A) OF THESECURITIES EXCHANGE ACT OF 1934, AS AMENDED AND RULE 17A-3THEREUNDER.

SANCTION: A CENSURE AND A MONETARY FINE IN THE AMOUNT OF$57,000.







Initiated By: CBOE EXCHANGE, INC.





Docket/Case Number: STAR NO. 20160487706 / FILE NO. USE-1690



CREDIT SUISSE SECURITIES (USA) LLC: (I) FAILED TO RECORD ACCURATEORDER RECEIPT TIMES FOR SAMPLED MANUAL CUSTOMER OPTIONSORDERS THAT WERE ROUTED TO AND EXECUTED ON CBOE DURING THE2016 REVIEW PERIOD; (II) FAILED TO RECORD THE ORDER TRANSMISSIONTIME FOR SAMPLED MANUAL CUSTOMER OPTION ORDERS THAT WEREROUTED TO AND EXECUTED ON CBOE DURING THE 2016 REVIEW PERIOD;(III) FAILED TO RECORD THE CORRECT EXCHANGE OF EXECUTION FORSAMPLED MANUAL CUSTOMER OPTIONS ORDERS THAT WERE ROUTED TOAND EXECUTED ON CBOE DURING THE 2016 REVIEW PERIOD; (IV) FAILEDTO RECORD ACCURATE ORDER RECEIPT TIMES FOR SAMPLED MANUALCUSTOMER OPTIONS ORDERS THAT WERE ROUTED TO AND EXECUTEDON CBOE DURING THE 2017 REVIEW PERIOD; (V) FAILED TO RECORD ANACCURATE ORDER TRANSMISSION TIME FOR SAMPLED MANUALCUSTOMER OPTIONS ORDERS THAT WERE ROUTED TO AND EXECUTEDON CBOE DURING THE 2017 REVIEW PERIOD;(VI) FAILED TO RECORD THECORRECT EXCHANGE OF EXECUTION FOR SAMPLED MANUAL CUSTOMEROPTIONS ORDERS THAT WERE ROUTED TO AND EXECUTED ON CBOEDURING THE 2017 REVIEW PERIOD; (VII) FAILED TO RECORD THEACCURATE FLOOR BROKER FOR SAMPLED MANUAL CUSTOMER OPTIONSORDERS THAT WERE ROUTED TO AND EXECUTED ON CBOE DURING THE2017 REVIEW PERIOD; (VIII) FAILED TO ESTABLISH, MAINTAIN ANDENFORCE WRITTEN SUPERVISORY PROCEDURES, AND A SYSTEM FORAPPLYING SUCH PROCEDURES, REASONABLY DESIGNED TO PREVENTAND DETECT VIOLATIONS OF EXCHANGE RULE 15.1 AND SECTION 17(A)OF THE EXCHANGE ACT AND RULE 17A-3 THEREUNDER IN CONJUNCTIONWITH THE RECORDKEEPING DEFICIENCIES IDENTIFIED DURING THE 2016REVIEW PERIOD AND THE 2017 REVIEW PERIOD REFERENCED ABOVE; (IX)FAILED TO SUPERVISE ITS ASSOCIATED PERSONS TO ASSURECOMPLIANCE WITH CBOE RULE 15.1, SECTION 17(A) OF THE EXCHANGEACT AND RULE 17A-3 THEREUNDER IN CONJUNCTION WITH THECONTINUED, SIMILAR RECORDKEEPING DEFICIENCIES IDENTIFIEDDURING THE 2017 REVIEW PERIOD REFERENCED ABOVE.

VIOLATION OF CBOE RULES 4.2, 4.24 AND 15.1; SECTION 17(A) OF THESECURITIES EXCHANGE ACT OF 1934, AS AMENDED AND RULE 17A-3THEREUNDER.

SANCTION: A CENSURE AND A MONETARY FINE IN THE AMOUNT OF$57,000.

Resolution: Consent 40©2020 FINRA. All rights reserved. Report about CREDIT SUISSE SECURITIES (USA) LLC






Resolution:


Sanction Details: A CENSURE AND A MONETARY FINE IN THE AMOUNT OF $57,000


No


Consent


Initiated By: CBOE EXCHANGE, INC.


Docket/Case Number: STAR NO. 20160487706 / FILE NO. USE-1690

Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, CREDIT SUISSESECURITIES (USA) LLC ("CSSU") CONSENTED TO THE SANCTIONS AND TOTHE ENTRY OF FINDINGS THAT CSSU VIOLATED SECTION 17(A) OF THEEXCHANGE ACT, SEC RULE 17A-3 THEREUNDER, AND CBOE EXCHANGE,INC. RULES 15.1 AND 4.2 DURING THE PERIODS JUNE 13, 2016 TO JUNE 17,2016 AND MAY 15, 2017 THROUGH MAY 19, 2017 AND CBOE EXCHANGE,INC. RULE 4.2 AND 4.24 DURING THE PERIOD JUNE 2016 THROUGHDECEMBER 2019. SEC RULE 17A-3(A) AND CBOE EXCHANGE, INC. RULE15.1 REQUIRE BROKERS AND EXCHANGE MEMBERS TO, AMONG OTHERTHINGS, CREATE COMPLETE AND ACCURATE MEMORANDA OFBROKERAGE ORDERS. THE MATTER ALSO INVOLVED FAILURES IN THESUPERVISORY PROCESS USED BY CSSU TO REASONABLY ENSURE THEACCURACY OF ITS BOOKS AND RECORDS FOR MANUAL OPTIONS ORDERSFROM JUNE 2016 THROUGH DECEMBER 2019, IN VIOLATION OF CBOEEXCHANGE, INC. RULES 4.2 AND 4.24. SPECIFICALLY, THE ISSUES RELATETO FINDINGS FROM FINRA'S 2016 AND 2017 TRADING AND FINANCIALCOMPLIANCE EXAMINATION ("TFCE") OF OPTIONS THAT CSSU FAILED TOACCURATELY RECORD TIMESTAMP, BROKER, OR EXCHANGE OFEXECUTION INFORMATION ON A SAMPLE OF 42 MANUAL OPTIONSORDERS ROUTED TO CBOE FOR EXECUTION AND THAT ITS SUPERVISIONOF ITS MANUAL OPTION ORDER BOOKS AND RECORDS WAS INADEQUATE.













Resolution:


Sanction Details: THE CBOE EXCHANGE, INC. CENSURED THE FIRM AND IMPOSED A FINEOF $57,000.


Consent

Disclosure 8 of 292

i


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT EXECUTEDOVER 300 BILLION SHARES ON BEHALF OF ITS DIRECT MARKET ACCESS(DMA) CLIENTS AND GENERATED OVER $300 MILLION IN REVENUE FROMITS DMA BUSINESS, NEVERTHELESS, IT DID NOT IMPLEMENTREASONABLY DESIGNED SURVEILLANCES AND SUPERVISORYPROCEDURES TO MONITOR FOR CERTAIN KINDS OF POTENTIALLYMANIPULATIVE ACTIVITY BY ITS DMA CLIENTS.THE FINDINGS STATED THAT DURING THE PERIOD OF FEBRUARY 2011THROUGH JULY 2014, CERTAIN OF THE FIRM'S DMA CLIENTS ENGAGED INTRADING ACTIVITY THAT GENERATED OVER 50,000 ALERTS AT FINRA ANDMULTIPLE EXCHANGES FOR POTENTIAL MANIPULATIVE TRADING,INCLUDING SPOOFING, LAYERING, WASH SALES AND PRE-ARRANGEDTRADING. AMONG THE FIRM'S DMA CLIENTS WERE THREE THAT, AT THEIRPEAK IN JUNE 2014, ACCOUNTED FOR ABOUT 20 PERCENT OF THE FIRM'SOVERALL ORDER FLOW AND TRIGGERED A MAJORITY OF THE ALERTSFOR POTENTIALLY MANIPULATIVE TRADING. THE FIRM, HOWEVER, DIDNOT BEGIN TO IMPLEMENT A SUPERVISORY SYSTEM OR PROCEDURESREASONABLY DESIGNED TO REVIEW FOR POTENTIAL SPOOFING,LAYERING, WASH SALES OR PRE-ARRANGED TRADING BY ITS DMACLIENTS UNTIL THE FALL OF 2013 - YEARS AFTER IT BEGAN EXPANDINGITS DMA BUSINESS. DURING THIS PERIOD, THE FIRM GREW ITS DMAACTIVITY FROM EXECUTING 0.7 BILLION SHARES FOR ITS DMA CLIENTS IN2010 TO 104 BILLION SHARES IN 2014. HOWEVER, THE FIRM DID NOT MEETITS SUPERVISORY OBLIGATIONS, DESPITE THE IMPLEMENTATION OFEXCHANGE ACT RULE 15C3-5 (THE MARKET ACCESS RULE) ANDACCOMPANYING REGULATORY GUIDANCE. IN ADDITION, IN 2012 AND 2013,THE FIRM WAS PUT ON NOTICE OF GAPS IN ITS SURVEILLANCE SYSTEMBY RED FLAGS RAISED IN CORRESPONDENCE WITH A DMA CLIENT AND BYAN INTERNAL AUDIT.THE FINDINGS ALSO STATED THAT THE FIRM DID NOT IMPLEMENTEFFECTIVE POST-TRADE CONTROLS TO MONITOR FOR THE PARTICULARTYPES OF POTENTIAL MANIPULATIVE ACTIVITY BY ITS DMA CLIENTS, ANDTHEREBY IT DID NOT ESTABLISH, DOCUMENT, AND MAINTAIN RISKMANAGEMENT CONTROLS AND SUPERVISORY PROCEDURESREASONABLY DESIGNED TO ENSURE COMPLIANCE WITH ALLREGULATORY REQUIREMENTS.THE FINDINGS ALSO INCLUDED THAT AS A RESULT OF THE ABOVE, THEFIRM DID NOT COMPLY FULLY WITH ITS SUPERVISORY OBLIGATIONS. THEFIRM DID NOT COMPLY FULLY WITH SEVERAL OTHER PROVISIONS OF THEMARKET ACCESS RULE, INCLUDING THOSE RELATED TO THE PREVENTIONOF ERRONEOUS ORDERS, CREDIT LIMITS AND ANNUAL REVIEW.







Initiated By: NEW YORK STOCK EXCHANGE





Principal Product Type: Other

Other Product Type(s): UNSPECIFIED SECURITIES

WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT EXECUTEDOVER 300 BILLION SHARES ON BEHALF OF ITS DIRECT MARKET ACCESS(DMA) CLIENTS AND GENERATED OVER $300 MILLION IN REVENUE FROMITS DMA BUSINESS, NEVERTHELESS, IT DID NOT IMPLEMENTREASONABLY DESIGNED SURVEILLANCES AND SUPERVISORYPROCEDURES TO MONITOR FOR CERTAIN KINDS OF POTENTIALLYMANIPULATIVE ACTIVITY BY ITS DMA CLIENTS.THE FINDINGS STATED THAT DURING THE PERIOD OF FEBRUARY 2011THROUGH JULY 2014, CERTAIN OF THE FIRM'S DMA CLIENTS ENGAGED INTRADING ACTIVITY THAT GENERATED OVER 50,000 ALERTS AT FINRA ANDMULTIPLE EXCHANGES FOR POTENTIAL MANIPULATIVE TRADING,INCLUDING SPOOFING, LAYERING, WASH SALES AND PRE-ARRANGEDTRADING. AMONG THE FIRM'S DMA CLIENTS WERE THREE THAT, AT THEIRPEAK IN JUNE 2014, ACCOUNTED FOR ABOUT 20 PERCENT OF THE FIRM'SOVERALL ORDER FLOW AND TRIGGERED A MAJORITY OF THE ALERTSFOR POTENTIALLY MANIPULATIVE TRADING. THE FIRM, HOWEVER, DIDNOT BEGIN TO IMPLEMENT A SUPERVISORY SYSTEM OR PROCEDURESREASONABLY DESIGNED TO REVIEW FOR POTENTIAL SPOOFING,LAYERING, WASH SALES OR PRE-ARRANGED TRADING BY ITS DMACLIENTS UNTIL THE FALL OF 2013 - YEARS AFTER IT BEGAN EXPANDINGITS DMA BUSINESS. DURING THIS PERIOD, THE FIRM GREW ITS DMAACTIVITY FROM EXECUTING 0.7 BILLION SHARES FOR ITS DMA CLIENTS IN2010 TO 104 BILLION SHARES IN 2014. HOWEVER, THE FIRM DID NOT MEETITS SUPERVISORY OBLIGATIONS, DESPITE THE IMPLEMENTATION OFEXCHANGE ACT RULE 15C3-5 (THE MARKET ACCESS RULE) ANDACCOMPANYING REGULATORY GUIDANCE. IN ADDITION, IN 2012 AND 2013,THE FIRM WAS PUT ON NOTICE OF GAPS IN ITS SURVEILLANCE SYSTEMBY RED FLAGS RAISED IN CORRESPONDENCE WITH A DMA CLIENT AND BYAN INTERNAL AUDIT.THE FINDINGS ALSO STATED THAT THE FIRM DID NOT IMPLEMENTEFFECTIVE POST-TRADE CONTROLS TO MONITOR FOR THE PARTICULARTYPES OF POTENTIAL MANIPULATIVE ACTIVITY BY ITS DMA CLIENTS, ANDTHEREBY IT DID NOT ESTABLISH, DOCUMENT, AND MAINTAIN RISKMANAGEMENT CONTROLS AND SUPERVISORY PROCEDURESREASONABLY DESIGNED TO ENSURE COMPLIANCE WITH ALLREGULATORY REQUIREMENTS.THE FINDINGS ALSO INCLUDED THAT AS A RESULT OF THE ABOVE, THEFIRM DID NOT COMPLY FULLY WITH ITS SUPERVISORY OBLIGATIONS. THEFIRM DID NOT COMPLY FULLY WITH SEVERAL OTHER PROVISIONS OF THEMARKET ACCESS RULE, INCLUDING THOSE RELATED TO THE PREVENTIONOF ERRONEOUS ORDERS, CREDIT LIMITS AND ANNUAL REVIEW.


Resolution:


No








Other Sanctions Ordered: UNDERTAKING,

Sanction Details: THE FIRM WAS CENSURED AND FINED A TOTAL OF $6,500,000, OF WHICH$591,501 SHALL BE PAID TO THE EXCHANGE. THE FIRM AGREES TOCONFIRM IN WRITING, WITHIN 180 DAYS OF THE DATE OF THE ISSUANCEOF THE NOTICE OF ACCEPTANCE OF THIS AWC, THAT IT HAS PERFORMEDRELEVANT UNDERTAKINGS, AS DESCRIBED IN THE AWC, INCLUDING,AMONG OTHERS, UPDATING AND/OR IMPLEMENTING SURVEILLANCESAND PROCEDURES REASONABLY DESIGNED TO MONITOR FORPOTENTIALLY MANIPULATIVE TRADING, AND UPDATING ITS WRITTENSUPERVISORY PROCEDURES RELEVANT TO ITS DEFICIENCIES.IN CONJUNCTION WITH THE CONFIRMATION, THE FIRM ALSO AGREES TOPROVIDE A WRITTEN DESCRIPTION OF, OR DOCUMENTATIONREFLECTING, AS OF DECEMBER 31, 2019: THE DESKS THAT PROVIDEMARKET ACCESS SERVICES TO CLIENTS; THE STATUS AND RATIONALEFOR ITS EXISTING PRE-TRADE ERRONEOUS ORDER AND CREDITCONTROLS AND POST-TRADE ANTI-MANIPULATION SURVEILLANCES FORPOTENTIAL SPOOFING, LAYERING, WASH SALES, PRE-ARRANGEDTRADING, AND MARKING THE OPEN/CLOSE THAT ARE USED BY OR FORDESKS THAT PROVIDE MARKET ACCESS SERVICES; PROCEDURES FORSETTING, MODIFYING, AND ENFORCING CREDIT LIMITS APPLICABLE TOMARKET ACCESS CUSTOMERS; AND WHICH PRE-TRADE CONTROLS ANDPOST-TRADE ANTI-MANIPULATION SURVEILLANCES APPLY TO PRODUCTSOTHER THAN EQUITIES.

Regulator Statement ACCEPTANCE OF THE AWC IS CONDITIONED UPON ACCEPTANCE OF ASIMILAR AGREEMENT IN RELATED MATTERS BETWEEN THE FIRM ANDOTHER SROS. THE AGGREGATE SETTLEMENT AMOUNT ACROSS ALLMARKETS IS THE $6,500,000.



Initiated By: THE NEW YORK STOCK EXCHANGE LLC



Allegations: THE NEW YORK STOCK EXCHANGE LLC ("NYSE") ALLEGED THAT,BETWEEN JULY 2010 AND APRIL 2015, CREDIT SUISSE SECURITIES (USA)LLC ("CSSU") VIOLATED SECURITIES EXCHANGE COMMISSION RULE 15C3-5 AND NYSE RULES 342 (FOR CONDUCT PRIOR TO NOVEMBER 6, 2014),3110 (FOR CONDUCT ON OR AFTER NOVEMBER 6, 2014), AND 2010,PRINCIPALLY CONCERNING PRE-TRADE CONTROLS AND POST-TRADESURVEILLANCES.








Censure


MONETARY FINE; CSSU ALSO AGREED THAT IT WILL PROVIDE (I) WRITTENCONFIRMATION THAT IT HAS UPDATED RELEVANT CONTROLS ANDPROCEDURES AND (II) DESCRIPTIONS OR DOCUMENTATION REGARDINGTHOSE CONTROLS AND PROCEDURES, AS OUTLINED IN THE PUBLICLYAVAILABLE SETTLEMENT DOCUMENT.





Resolution:

Other Sanctions Ordered: CSSU ALSO AGREED THAT IT WILL PROVIDE (I) WRITTEN CONFIRMATIONTHAT IT HAS UPDATED RELEVANT CONTROLS AND PROCEDURES AND (II)DESCRIPTIONS OR DOCUMENTATION REGARDING THOSE CONTROLS ANDPROCEDURES, AS OUTLINED IN THE PUBLICLY AVAILABLE SETTLEMENTDOCUMENT.

Sanction Details: NYSE CENSURED THE FIRM AND IMPOSED A $591,501 FINE, WHICH HASBEEN PAID. CSSU ALSO AGREED THAT IT WILL PROVIDE (I) WRITTENCONFIRMATION THAT IT HAS UPDATED RELEVANT CONTROLS ANDPROCEDURES AND (II) DESCRIPTIONS OR DOCUMENTATION REGARDINGTHOSE CONTROLS AND PROCEDURES, AS OUTLINED IN THE PUBLICLYAVAILABLE SETTLEMENT DOCUMENT.



Disclosure 9 of 292

i


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT EXECUTEDOVER 300 BILLION SHARES ON BEHALF OF ITS DIRECT MARKET ACCESS(DMA) CLIENTS AND GENERATED OVER $300 MILLION IN REVENUE FROMITS DMA BUSINESS, NEVERTHELESS, IT DID NOT IMPLEMENTREASONABLY DESIGNED SURVEILLANCES AND SUPERVISORYPROCEDURES TO MONITOR FOR CERTAIN KINDS OF POTENTIALLYMANIPULATIVE ACTIVITY BY ITS DMA CLIENTS.THE FINDINGS STATED THAT DURING THE PERIOD OF FEBRUARY 2011THROUGH JULY 2014, CERTAIN OF THE FIRM'S DMA CLIENTS ENGAGED INTRADING ACTIVITY THAT GENERATED OVER 50,000 ALERTS AT FINRA ANDMULTIPLE EXCHANGES FOR POTENTIAL MANIPULATIVE TRADING,INCLUDING SPOOFING, LAYERING, WASH SALES AND PRE-ARRANGEDTRADING. AMONG THE FIRM'S DMA CLIENTS WERE THREE THAT, AT THEIRPEAK IN JUNE 2014, ACCOUNTED FOR ABOUT 20 PERCENT OF THE FIRM'SOVERALL ORDER FLOW AND TRIGGERED A MAJORITY OF THE ALERTSFOR POTENTIALLY MANIPULATIVE TRADING. THE FIRM, HOWEVER, DIDNOT BEGIN TO IMPLEMENT A SUPERVISORY SYSTEM OR PROCEDURESREASONABLY DESIGNED TO REVIEW FOR POTENTIAL SPOOFING,LAYERING, WASH SALES OR PRE-ARRANGED TRADING BY ITS DMACLIENTS UNTIL THE FALL OF 2013 - YEARS AFTER IT BEGAN EXPANDINGITS DMA BUSINESS. DURING THIS PERIOD, THE FIRM GREW ITS DMAACTIVITY FROM EXECUTING 0.7 BILLION SHARES FOR ITS DMA CLIENTS IN2010 TO 104 BILLION SHARES IN 2014. HOWEVER, THE FIRM DID NOT MEETITS SUPERVISORY OBLIGATIONS, DESPITE THE IMPLEMENTATION OFEXCHANGE ACT RULE 15C3-5 (THE MARKET ACCESS RULE) ANDACCOMPANYING REGULATORY GUIDANCE. IN ADDITION, IN 2012 AND 2013,THE FIRM WAS PUT ON NOTICE OF GAPS IN ITS SURVEILLANCE SYSTEMBY RED FLAGS RAISED IN CORRESPONDENCE WITH A DMA CLIENT AND BYAN INTERNAL AUDIT.THE FINDINGS ALSO STATED THAT THE FIRM DID NOT IMPLEMENTEFFECTIVE POST-TRADE CONTROLS TO MONITOR FOR THE PARTICULARTYPES OF POTENTIAL MANIPULATIVE ACTIVITY BY ITS DMA CLIENTS, ANDTHEREBY IT DID NOT ESTABLISH, DOCUMENT, AND MAINTAIN RISKMANAGEMENT CONTROLS AND SUPERVISORY PROCEDURESREASONABLY DESIGNED TO ENSURE COMPLIANCE WITH ALLREGULATORY REQUIREMENTS.THE FINDINGS ALSO INCLUDED THAT AS A RESULT OF THE ABOVE, THEFIRM DID NOT COMPLY FULLY WITH ITS SUPERVISORY OBLIGATIONS. THEFIRM ALSO DID NOT COMPLY FULLY WITH MARKET ACCESS RULEPROVISIONS RELATED TO THE SETTING OF CREDIT LIMITS AND ANNUALREVIEW.







Initiated By: NASDAQ BX, INC.







WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT EXECUTEDOVER 300 BILLION SHARES ON BEHALF OF ITS DIRECT MARKET ACCESS(DMA) CLIENTS AND GENERATED OVER $300 MILLION IN REVENUE FROMITS DMA BUSINESS, NEVERTHELESS, IT DID NOT IMPLEMENTREASONABLY DESIGNED SURVEILLANCES AND SUPERVISORYPROCEDURES TO MONITOR FOR CERTAIN KINDS OF POTENTIALLYMANIPULATIVE ACTIVITY BY ITS DMA CLIENTS.THE FINDINGS STATED THAT DURING THE PERIOD OF FEBRUARY 2011THROUGH JULY 2014, CERTAIN OF THE FIRM'S DMA CLIENTS ENGAGED INTRADING ACTIVITY THAT GENERATED OVER 50,000 ALERTS AT FINRA ANDMULTIPLE EXCHANGES FOR POTENTIAL MANIPULATIVE TRADING,INCLUDING SPOOFING, LAYERING, WASH SALES AND PRE-ARRANGEDTRADING. AMONG THE FIRM'S DMA CLIENTS WERE THREE THAT, AT THEIRPEAK IN JUNE 2014, ACCOUNTED FOR ABOUT 20 PERCENT OF THE FIRM'SOVERALL ORDER FLOW AND TRIGGERED A MAJORITY OF THE ALERTSFOR POTENTIALLY MANIPULATIVE TRADING. THE FIRM, HOWEVER, DIDNOT BEGIN TO IMPLEMENT A SUPERVISORY SYSTEM OR PROCEDURESREASONABLY DESIGNED TO REVIEW FOR POTENTIAL SPOOFING,LAYERING, WASH SALES OR PRE-ARRANGED TRADING BY ITS DMACLIENTS UNTIL THE FALL OF 2013 - YEARS AFTER IT BEGAN EXPANDINGITS DMA BUSINESS. DURING THIS PERIOD, THE FIRM GREW ITS DMAACTIVITY FROM EXECUTING 0.7 BILLION SHARES FOR ITS DMA CLIENTS IN2010 TO 104 BILLION SHARES IN 2014. HOWEVER, THE FIRM DID NOT MEETITS SUPERVISORY OBLIGATIONS, DESPITE THE IMPLEMENTATION OFEXCHANGE ACT RULE 15C3-5 (THE MARKET ACCESS RULE) ANDACCOMPANYING REGULATORY GUIDANCE. IN ADDITION, IN 2012 AND 2013,THE FIRM WAS PUT ON NOTICE OF GAPS IN ITS SURVEILLANCE SYSTEMBY RED FLAGS RAISED IN CORRESPONDENCE WITH A DMA CLIENT AND BYAN INTERNAL AUDIT.THE FINDINGS ALSO STATED THAT THE FIRM DID NOT IMPLEMENTEFFECTIVE POST-TRADE CONTROLS TO MONITOR FOR THE PARTICULARTYPES OF POTENTIAL MANIPULATIVE ACTIVITY BY ITS DMA CLIENTS, ANDTHEREBY IT DID NOT ESTABLISH, DOCUMENT, AND MAINTAIN RISKMANAGEMENT CONTROLS AND SUPERVISORY PROCEDURESREASONABLY DESIGNED TO ENSURE COMPLIANCE WITH ALLREGULATORY REQUIREMENTS.THE FINDINGS ALSO INCLUDED THAT AS A RESULT OF THE ABOVE, THEFIRM DID NOT COMPLY FULLY WITH ITS SUPERVISORY OBLIGATIONS. THEFIRM ALSO DID NOT COMPLY FULLY WITH MARKET ACCESS RULEPROVISIONS RELATED TO THE SETTING OF CREDIT LIMITS AND ANNUALREVIEW.








Resolution:





No



iReporting Source:







Initiated By: NASDAQ BX, INC.


Censure







Allegations: NASDAQ BX, INC. ("BX") ALLEGED THAT, BETWEEN JULY 2010 AND AUGUST2015, CREDIT SUISSE SECURITIES (USA) LLC ("CSSU") VIOLATEDSECURITIES EXCHANGE COMMISSION RULE 15C3-5 AND BX RULES 2110AND 3010, PRINCIPALLY CONCERNING PRE-TRADE CONTROLS AND POST-TRADE SURVEILLANCES.



Resolution:


Sanction Details: BX CENSURED THE FIRM AND IMPOSED A $566,583 FINE, WHICH HAS BEENPAID. CSSU ALSO AGREED THAT IT WILL PROVIDE (I) WRITTENCONFIRMATION THAT IT HAS UPDATED RELEVANT CONTROLS ANDPROCEDURES AND (II) DESCRIPTIONS OR DOCUMENTATION REGARDINGTHOSE CONTROLS AND PROCEDURES, AS OUTLINED IN THE PUBLICLYAVAILABLE SETTLEMENT DOCUMENT.



Disclosure 10 of 292

i























Resolution:




No








THE FIRM WAS CENSURED AND FINED A TOTAL OF $6,500,000, OF WHICH$591,500 SHALL BE PAID TO THE EXCHANGE. THE FIRM AGREES TOCONFIRM IN WRITING, WITHIN 180 DAYS OF THE DATE OF THE ISSUANCEOF THE NOTICE OF ACCEPTANCE OF THIS AWC, THAT IT HAS PERFORMEDRELEVANT UNDERTAKINGS, AS DESCRIBED IN THE AWC, INCLUDING,AMONG OTHERS, UPDATING AND/OR IMPLEMENTING SURVEILLANCESAND PROCEDURES REASONABLY DESIGNED TO MONITOR FORPOTENTIALLY MANIPULATIVE TRADING, AND UPDATING ITS WRITTENSUPERVISORY PROCEDURES RELEVANT TO ITS DEFICIENCIES.IN CONJUNCTION WITH THE CONFIRMATION, THE FIRM ALSO AGREES TOPROVIDE A WRITTEN DESCRIPTION OF, OR DOCUMENTATIONREFLECTING, AS OF DECEMBER 31, 2019: THE DESKS THAT PROVIDEMARKET ACCESS SERVICES TO CLIENTS; THE STATUS AND RATIONALEFOR ITS EXISTING PRE-TRADE ERRONEOUS ORDER AND CREDITCONTROLS AND POST-TRADE ANTI-MANIPULATION SURVEILLANCES FORPOTENTIAL SPOOFING, LAYERING, WASH SALES, PRE-ARRANGEDTRADING, AND MARKING THE OPEN/CLOSE THAT ARE USED BY OR FORDESKS THAT PROVIDE MARKET ACCESS SERVICES; PROCEDURES FORSETTING, MODIFYING, AND ENFORCING CREDIT LIMITS APPLICABLE TOMARKET ACCESS CUSTOMERS; AND WHICH PRE-TRADE CONTROLS ANDPOST-TRADE ANTI-MANIPULATION SURVEILLANCES APPLY TO PRODUCTSOTHER THAN EQUITIES.





Censure







Allegations: NYSE ARCA, INC. ("NYSE ARCA") ALLEGED THAT, BETWEEN JULY 2010 ANDAPRIL 2015, CREDIT SUISSE SECURITIES (USA) LLC ("CSSU") VIOLATEDSECURITIES EXCHANGE COMMISSION RULE 15C3-5 AND NYSE ARCAEQUITIES RULES 6.18 AND 2010, PRINCIPALLY CONCERNING PRE-TRADECONTROLS AND POST-TRADE SURVEILLANCES.



Resolution:


Sanction Details: NYSE ARCA CENSURED THE FIRM AND IMPOSED A $591,500 FINE, WHICHHAS BEEN PAID. CSSU ALSO AGREED THAT IT WILL PROVIDE (I) WRITTENCONFIRMATION THAT IT HAS UPDATED RELEVANT CONTROLS ANDPROCEDURES AND (II) DESCRIPTIONS OR DOCUMENTATION REGARDINGTHOSE CONTROLS AND PROCEDURES, AS OUTLINED IN THE PUBLICLYAVAILABLE SETTLEMENT DOCUMENT.








Sanction Details: NYSE ARCA CENSURED THE FIRM AND IMPOSED A $591,500 FINE, WHICHHAS BEEN PAID. CSSU ALSO AGREED THAT IT WILL PROVIDE (I) WRITTENCONFIRMATION THAT IT HAS UPDATED RELEVANT CONTROLS ANDPROCEDURES AND (II) DESCRIPTIONS OR DOCUMENTATION REGARDINGTHOSE CONTROLS AND PROCEDURES, AS OUTLINED IN THE PUBLICLYAVAILABLE SETTLEMENT DOCUMENT.


i


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT EXECUTEDOVER 300 BILLION SHARES ON BEHALF OF ITS DIRECT MARKET ACCESS(DMA) CLIENTS AND GENERATED OVER $300 MILLION IN REVENUE FROMITS DMA BUSINESS, NEVERTHELESS, IT DID NOT IMPLEMENTREASONABLY DESIGNED SURVEILLANCES AND SUPERVISORYPROCEDURES TO MONITOR FOR CERTAIN KINDS OF POTENTIALLYMANIPULATIVE ACTIVITY BY ITS DMA CLIENTS.THE FINDINGS STATED THAT DURING THE PERIOD OF FEBRUARY 2011THROUGH JULY 2014, CERTAIN OF THE FIRM'S DMA CLIENTS ENGAGED INTRADING ACTIVITY THAT GENERATED OVER 50,000 ALERTS AT FINRA ANDMULTIPLE EXCHANGES FOR POTENTIAL MANIPULATIVE TRADING,INCLUDING SPOOFING, LAYERING, WASH SALES AND PRE-ARRANGEDTRADING. AMONG THE FIRM'S DMA CLIENTS WERE THREE THAT, AT THEIRPEAK IN JUNE 2014, ACCOUNTED FOR ABOUT 20 PERCENT OF THE FIRM'SOVERALL ORDER FLOW AND TRIGGERED A MAJORITY OF THE ALERTSFOR POTENTIALLY MANIPULATIVE TRADING. THE FIRM, HOWEVER, DIDNOT BEGIN TO IMPLEMENT A SUPERVISORY SYSTEM OR PROCEDURESREASONABLY DESIGNED TO REVIEW FOR POTENTIAL SPOOFING,LAYERING, WASH SALES OR PRE-ARRANGED TRADING BY ITS DMACLIENTS UNTIL THE FALL OF 2013 - YEARS AFTER IT BEGAN EXPANDINGITS DMA BUSINESS. DURING THIS PERIOD, THE FIRM GREW ITS DMAACTIVITY FROM EXECUTING 0.7 BILLION SHARES FOR ITS DMA CLIENTS IN2010 TO 104 BILLION SHARES IN 2014. HOWEVER, THE FIRM DID NOT MEETITS SUPERVISORY OBLIGATIONS, DESPITE THE IMPLEMENTATION OFEXCHANGE ACT RULE 15C3-5 (THE MARKET ACCESS RULE) ANDACCOMPANYING REGULATORY GUIDANCE. IN ADDITION, IN 2012 AND 2013,THE FIRM WAS PUT ON NOTICE OF GAPS IN ITS SURVEILLANCE SYSTEMBY RED FLAGS RAISED IN CORRESPONDENCE WITH A DMA CLIENT AND BYAN INTERNAL AUDIT.THE FINDINGS ALSO STATED THAT THE FIRM DID NOT IMPLEMENTEFFECTIVE POST-TRADE CONTROLS TO MONITOR FOR THE PARTICULARTYPES OF POTENTIAL MANIPULATIVE ACTIVITY BY ITS DMA CLIENTS, ANDTHEREBY IT DID NOT ESTABLISH, DOCUMENT, AND MAINTAIN RISKMANAGEMENT CONTROLS AND SUPERVISORY PROCEDURESREASONABLY DESIGNED TO ENSURE COMPLIANCE WITH ALLREGULATORY REQUIREMENTS.THE FINDINGS ALSO INCLUDED THAT AS A RESULT OF THE ABOVE, THEFIRM DID NOT COMPLY FULLY WITH ITS SUPERVISORY OBLIGATIONS. THEFIRM DID NOT COMPLY FULLY WITH SEVERAL OTHER PROVISIONS OF THEMARKET ACCESS RULE PROVISIONS RELATED TO THE SETTING OFCREDIT LIMITS AND ANNUAL REVIEW.














WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT EXECUTEDOVER 300 BILLION SHARES ON BEHALF OF ITS DIRECT MARKET ACCESS(DMA) CLIENTS AND GENERATED OVER $300 MILLION IN REVENUE FROMITS DMA BUSINESS, NEVERTHELESS, IT DID NOT IMPLEMENTREASONABLY DESIGNED SURVEILLANCES AND SUPERVISORYPROCEDURES TO MONITOR FOR CERTAIN KINDS OF POTENTIALLYMANIPULATIVE ACTIVITY BY ITS DMA CLIENTS.THE FINDINGS STATED THAT DURING THE PERIOD OF FEBRUARY 2011THROUGH JULY 2014, CERTAIN OF THE FIRM'S DMA CLIENTS ENGAGED INTRADING ACTIVITY THAT GENERATED OVER 50,000 ALERTS AT FINRA ANDMULTIPLE EXCHANGES FOR POTENTIAL MANIPULATIVE TRADING,INCLUDING SPOOFING, LAYERING, WASH SALES AND PRE-ARRANGEDTRADING. AMONG THE FIRM'S DMA CLIENTS WERE THREE THAT, AT THEIRPEAK IN JUNE 2014, ACCOUNTED FOR ABOUT 20 PERCENT OF THE FIRM'SOVERALL ORDER FLOW AND TRIGGERED A MAJORITY OF THE ALERTSFOR POTENTIALLY MANIPULATIVE TRADING. THE FIRM, HOWEVER, DIDNOT BEGIN TO IMPLEMENT A SUPERVISORY SYSTEM OR PROCEDURESREASONABLY DESIGNED TO REVIEW FOR POTENTIAL SPOOFING,LAYERING, WASH SALES OR PRE-ARRANGED TRADING BY ITS DMACLIENTS UNTIL THE FALL OF 2013 - YEARS AFTER IT BEGAN EXPANDINGITS DMA BUSINESS. DURING THIS PERIOD, THE FIRM GREW ITS DMAACTIVITY FROM EXECUTING 0.7 BILLION SHARES FOR ITS DMA CLIENTS IN2010 TO 104 BILLION SHARES IN 2014. HOWEVER, THE FIRM DID NOT MEETITS SUPERVISORY OBLIGATIONS, DESPITE THE IMPLEMENTATION OFEXCHANGE ACT RULE 15C3-5 (THE MARKET ACCESS RULE) ANDACCOMPANYING REGULATORY GUIDANCE. IN ADDITION, IN 2012 AND 2013,THE FIRM WAS PUT ON NOTICE OF GAPS IN ITS SURVEILLANCE SYSTEMBY RED FLAGS RAISED IN CORRESPONDENCE WITH A DMA CLIENT AND BYAN INTERNAL AUDIT.THE FINDINGS ALSO STATED THAT THE FIRM DID NOT IMPLEMENTEFFECTIVE POST-TRADE CONTROLS TO MONITOR FOR THE PARTICULARTYPES OF POTENTIAL MANIPULATIVE ACTIVITY BY ITS DMA CLIENTS, ANDTHEREBY IT DID NOT ESTABLISH, DOCUMENT, AND MAINTAIN RISKMANAGEMENT CONTROLS AND SUPERVISORY PROCEDURESREASONABLY DESIGNED TO ENSURE COMPLIANCE WITH ALLREGULATORY REQUIREMENTS.THE FINDINGS ALSO INCLUDED THAT AS A RESULT OF THE ABOVE, THEFIRM DID NOT COMPLY FULLY WITH ITS SUPERVISORY OBLIGATIONS. THEFIRM DID NOT COMPLY FULLY WITH SEVERAL OTHER PROVISIONS OF THEMARKET ACCESS RULE PROVISIONS RELATED TO THE SETTING OFCREDIT LIMITS AND ANNUAL REVIEW.


Resolution:

Other Sanctions Ordered: UNDERTAKING



No








THE FIRM WAS CENSURED AND FINED A TOTAL OF $6,500,000, OF WHICH$566,583 SHALL BE PAID TO THE EXCHANGE. THE FIRM AGREES TOCONFIRM IN WRITING, WITHIN 180 DAYS OF THE DATE OF THE ISSUANCEOF THE NOTICE OF ACCEPTANCE OF THIS AWC, THAT IT HAS PERFORMEDRELEVANT UNDERTAKINGS, AS DESCRIBED IN THE AWC, INCLUDING,AMONG OTHERS, UPDATING AND/OR IMPLEMENTING SURVEILLANCESAND PROCEDURES REASONABLY DESIGNED TO MONITOR FORPOTENTIALLY MANIPULATIVE TRADING, AND UPDATING ITS WRITTENSUPERVISORY PROCEDURES RELEVANT TO ITS DEFICIENCIES.IN CONJUNCTION WITH THE CONFIRMATION, THE FIRM ALSO AGREES TOPROVIDE A WRITTEN DESCRIPTION OF, OR DOCUMENTATIONREFLECTING, AS OF DECEMBER 31, 2019: THE DESKS THAT PROVIDEMARKET ACCESS SERVICES TO CLIENTS; THE STATUS AND RATIONALEFOR ITS EXISTING PRE-TRADE ERRONEOUS ORDER AND CREDITCONTROLS AND POST-TRADE ANTI-MANIPULATION SURVEILLANCES FORPOTENTIAL SPOOFING, LAYERING, WASH SALES, PRE-ARRANGEDTRADING, AND MARKING THE OPEN/CLOSE THAT ARE USED BY OR FORDESKS THAT PROVIDE MARKET ACCESS SERVICES; PROCEDURES FORSETTING, MODIFYING, AND ENFORCING CREDIT LIMITS APPLICABLE TOMARKET ACCESS CUSTOMERS; AND WHICH PRE-TRADE CONTROLS ANDPOST-TRADE ANTI-MANIPULATION SURVEILLANCES APPLY TO PRODUCTSOTHER THAN EQUITIES.





Censure







Allegations: NASDAQ PHLX LLC ("PHLX") ALLEGED THAT, BETWEEN OCTOBER 2010 ANDAUGUST 2015, CREDIT SUISSE SECURITIES (USA) LLC ("CSSU") VIOLATEDSECURITIES EXCHANGE COMMISSION RULE 15C3-5 AND PHLX RULES 707AND 748, PRINCIPALLY CONCERNING PRE-TRADE CONTROLS AND POST-TRADE SURVEILLANCES.


Resolution: Acceptance, Waiver & Consent(AWC)








Sanction Details: PHLX CENSURED THE FIRM AND IMPOSED A $566,583 FINE, WHICH HASBEEN PAID. CSSU ALSO AGREED THAT IT WILL PROVIDE (I) WRITTENCONFIRMATION THAT IT HAS UPDATED RELEVANT CONTROLS ANDPROCEDURES AND (II) DESCRIPTIONS OR DOCUMENTATION REGARDINGTHOSE CONTROLS AND PROCEDURES, AS OUTLINED IN THE PUBLICLYAVAILABLE SETTLEMENT DOCUMENT.



i









Initiated By: NASDAQ STOCK MARKET









Resolution:



No











Initiated By: THE NASDAQ STOCK MARKET LLC




Allegations: THE NASDAQ STOCK MARKET LLC ("NASDAQ") ALLEGED THAT, BETWEENJULY 2010 AND AUGUST 2017, CREDIT SUISSE SECURITIES (USA) LLC("CSSU") VIOLATED SECURITIES EXCHANGE COMMISSION RULE 15C3-5AND NASDAQ RULES 3010, 2110 (FOR CONDUCT PRIOR TO NOVEMBER 21,2012), AND 2010A (FOR CONDUCT ON OR AFTER NOVEMBER 21, 2012),PRINCIPALLY CONCERNING PRE-TRADE CONTROLS AND POST-TRADESURVEILLANCES.








Censure






Resolution:


Sanction Details: NASDAQ CENSURED THE FIRM AND IMPOSED A $591,500 FINE, WHICH HASBEEN PAID. CSSU ALSO AGREED THAT IT WILL PROVIDE (I) WRITTENCONFIRMATION THAT IT HAS UPDATED RELEVANT CONTROLS ANDPROCEDURES AND (II) DESCRIPTIONS OR DOCUMENTATION REGARDINGTHOSE CONTROLS AND PROCEDURES, AS OUTLINED IN THE PUBLICLYAVAILABLE SETTLEMENT DOCUMENT.




i


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT DURING THEREVIEW PERIOD, JULY 2010 THROUGH 2016 THE FIRM DID NOTIMPLEMENT EFFECTIVE POST-TRADE CONTROLS AND PROCEDURES TOMONITOR FOR POTENTIAL MARKING THE CLOSE IN EQUITY OPTIONS BYITS DMA CLIENTS, AND THEREBY THE FIRM DID NOT ESTABLISH,DOCUMENT, AND MAINTAIN RISK MANAGEMENT CONTROLS ANDSUPERVISORY PROCEDURES REASONABLY DESIGNED TO ENSURECOMPLIANCE WITH ALL REGULATORY REQUIREMENTS AS REQUIRED BYNASDAQ RULE 15C3-5(C)(2)(IV). ADDITIONALLY, AS A RESULT OF THEABOVE, THE FIRM DID NOT SATISFY ITS SUPERVISORY OBLIGATIONS.THE FINDINGS STATED THAT DURING THE REVIEW PERIOD, THE FIRMOFFERED ITS CLIENTS, WHICH INCLUDED FLNRA REGISTERED BROKER-DEALERS AND OTHER INSTITUTIONAL ENTITIES, SOME OF WHOM WEREFOREIGN UNREGISTERED ENTITIES, DIRECT MARKET ACCESS ("DMA") TOTHE NASDAQ OPTIONS MARKET LLC ("NOM"). DURING THE REVIEWPERIOD, THE SECURITIES AND EXCHANGE COMMISSION ADOPTED THEMARKET ACCESS RULE ON NOVEMBER 3, 2010, WHICH REQUIRESBROKERS OR DEALERS WITH ACCESS TO TRADING SECURITIES DIRECTLYON AN EXCHANGE, INCLUDING THOSE PROVIDING SPONSORED ORDIRECT MARKET ACCESS TO CUSTOMERS, TO ESTABLISH, DOCUMENT,AND MAINTAIN A SYSTEM OF RISK MANAGEMENT CONTROLS ANDSUPERVISORY PROCEDURES REASONABLY DESIGNED TO MANAGE THEFINANCIAL, REGULATORY AND OTHER RISKS ASSOCIATED WITH MARKETACCESS.







Initiated By: NASDAQ OPTIONS MARKET LLC ("NOM")







WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT DURING THEREVIEW PERIOD, JULY 2010 THROUGH 2016 THE FIRM DID NOTIMPLEMENT EFFECTIVE POST-TRADE CONTROLS AND PROCEDURES TOMONITOR FOR POTENTIAL MARKING THE CLOSE IN EQUITY OPTIONS BYITS DMA CLIENTS, AND THEREBY THE FIRM DID NOT ESTABLISH,DOCUMENT, AND MAINTAIN RISK MANAGEMENT CONTROLS ANDSUPERVISORY PROCEDURES REASONABLY DESIGNED TO ENSURECOMPLIANCE WITH ALL REGULATORY REQUIREMENTS AS REQUIRED BYNASDAQ RULE 15C3-5(C)(2)(IV). ADDITIONALLY, AS A RESULT OF THEABOVE, THE FIRM DID NOT SATISFY ITS SUPERVISORY OBLIGATIONS.THE FINDINGS STATED THAT DURING THE REVIEW PERIOD, THE FIRMOFFERED ITS CLIENTS, WHICH INCLUDED FLNRA REGISTERED BROKER-DEALERS AND OTHER INSTITUTIONAL ENTITIES, SOME OF WHOM WEREFOREIGN UNREGISTERED ENTITIES, DIRECT MARKET ACCESS ("DMA") TOTHE NASDAQ OPTIONS MARKET LLC ("NOM"). DURING THE REVIEWPERIOD, THE SECURITIES AND EXCHANGE COMMISSION ADOPTED THEMARKET ACCESS RULE ON NOVEMBER 3, 2010, WHICH REQUIRESBROKERS OR DEALERS WITH ACCESS TO TRADING SECURITIES DIRECTLYON AN EXCHANGE, INCLUDING THOSE PROVIDING SPONSORED ORDIRECT MARKET ACCESS TO CUSTOMERS, TO ESTABLISH, DOCUMENT,AND MAINTAIN A SYSTEM OF RISK MANAGEMENT CONTROLS ANDSUPERVISORY PROCEDURES REASONABLY DESIGNED TO MANAGE THEFINANCIAL, REGULATORY AND OTHER RISKS ASSOCIATED WITH MARKETACCESS.


Resolution:




No







www.finra.org/brokercheck User GuidanceTHE FIRM WAS CENSURED AND FINED A TOTAL OF $6,500,000, OF WHICH$50,917 SHALL BE PAID TO THE EXCHANGE. THE FIRM AGREES TOCONFIRM IN WRITING, WITHIN 180 DAYS OF THE DATE OF THE ISSUANCEOF THE NOTICE OF ACCEPTANCE OF THIS AWC, THAT IT HAS PERFORMEDRELEVANT UNDERTAKINGS, AS DESCRIBED IN THE AWC, INCLUDING,AMONG OTHERS, UPDATING AND/OR IMPLEMENTING SURVEILLANCESAND PROCEDURES REASONABLY DESIGNED TO MONITOR FORPOTENTIALLY MANIPULATIVE TRADING, AND UPDATING ITS WRITTENSUPERVISORY PROCEDURES RELEVANT TO ITS DEFICIENCIES.IN CONJUNCTION WITH THE CONFIRMATION, THE FIRM ALSO AGREES TOPROVIDE A WRITTEN DESCRIPTION OF, OR DOCUMENTATIONREFLECTING, AS OF DECEMBER 31, 2019: THE DESKS THAT PROVIDEMARKET ACCESS SERVICES TO CLIENTS; THE STATUS AND RATIONALEFOR ITS EXISTING PRE-TRADE ERRONEOUS ORDER AND CREDITCONTROLS AND POST-TRADE ANTI-MANIPULATION SURVEILLANCES FORPOTENTIAL SPOOFING, LAYERING, WASH SALES, PRE-ARRANGEDTRADING, AND MARKING THE OPEN/CLOSE THAT ARE USED BY OR FORDESKS THAT PROVIDE MARKET ACCESS SERVICES; PROCEDURES FORSETTING, MODIFYING, AND ENFORCING CREDIT LIMITS APPLICABLE TOMARKET ACCESS CUSTOMERS; AND WHICH PRE-TRADE CONTROLS ANDPOST-TRADE ANTI-MANIPULATION SURVEILLANCES APPLY TO PRODUCTSOTHER THAN EQUITIES.



Initiated By: NASDAQ OPTIONS MARKET LLC


Censure







Allegations: NASDAQ OPTIONS MARKET LLC ("NOM") ALLEGED THAT, FROM JULY 2010THROUGH 2016, CREDIT SUISSE SECURITIES (USA) LLC ("CSSU")VIOLATED SECURITIES EXCHANGE COMMISSION RULE 15C3-5, NOMRULES CHAPTER XI, SEC. 8 AND CHAPTER III, SEC. 1, AND NASDAQ RULES2110 (FOR CONDUCT PRIOR TO NOVEMBER 21, 2012) AND 2010A (FORCONDUCT ON OR AFTER NOVEMBER 21, 2012), PRINCIPALLY CONCERNINGPRE-TRADE CONTROLS AND POST-TRADE SURVEILLANCES.










Resolution:


Sanction Details: NOM CENSURED THE FIRM AND IMPOSED A $50,917 FINE, WHICH HASBEEN PAID. CSSU ALSO AGREED THAT IT WILL PROVIDE (I) WRITTENCONFIRMATION THAT IT HAS UPDATED RELEVANT CONTROLS ANDPROCEDURES AND (II) DESCRIPTIONS OR DOCUMENTATION REGARDINGTHOSE CONTROLS AND PROCEDURES, AS OUTLINED IN THE PUBLICLYAVAILABLE SETTLEMENT DOCUMENT.




i


















Resolution:


No











No



Allegations: NYSE AMERICAN LLC ("NYSE AMERICAN") ALLEGED THAT, BETWEEN JULY2010 AND MARCH 2016, CREDIT SUISSE SECURITIES (USA) LLC ("CSSU")VIOLATED SECURITIES EXCHANGE COMMISSION RULE 15C3-5, NYSEAMERICAN RULE 320 - EQUITIES, AND NYSE AMERICAN RULE 2010 -EQUITIES, PRINCIPALLY CONCERNING PRE-TRADE CONTROLS AND POST-TRADE SURVEILLANCES.









Censure







NYSE AMERICAN LLC ("NYSE AMERICAN") ALLEGED THAT, BETWEEN JULY2010 AND MARCH 2016, CREDIT SUISSE SECURITIES (USA) LLC ("CSSU")VIOLATED SECURITIES EXCHANGE COMMISSION RULE 15C3-5, NYSEAMERICAN RULE 320 - EQUITIES, AND NYSE AMERICAN RULE 2010 -EQUITIES, PRINCIPALLY CONCERNING PRE-TRADE CONTROLS AND POST-TRADE SURVEILLANCES.


Resolution:


Sanction Details: NYSE AMERICAN CENSURED THE FIRM AND IMPOSED A $591,500 FINE,WHICH HAS BEEN PAID. CSSU ALSO AGREED THAT IT WILL PROVIDE (I)WRITTEN CONFIRMATION THAT IT HAS UPDATED RELEVANT CONTROLSAND PROCEDURES AND (II) DESCRIPTIONS OR DOCUMENTATIONREGARDING THOSE CONTROLS AND PROCEDURES, AS OUTLINED IN THEPUBLICLY AVAILABLE SETTLEMENT DOCUMENT.




i


Allegations: CREDIT SUISSE SECURITIES (USA) LLC DID NOT REASONABLY MONITORAND SURVEIL FOR POTENTIALLY MANIPULATIVE TRADING BY DIRECTMARKET ACCESS (DMA) CLIENTS; DID NOT REASONABLY SUPERVISE ITSCLIENT'S DMA ACTIVITY FOR POTENTIALLY MANIPULATIVE TRADING; DIDNOT HAVE PRE-TRADE CONTROLS THAT WERE REASONABLY DESIGNEDTO PREVENT ERRONEOUS ORDERS; DID NOT HAVE PRE-TRADECONTROLS AND PROCEDURES REGARDING CREDIT THRESHOLDS THATWERE REASONABLE; DID NOT HAVE AN ANNUAL REVIEW THAT WASREASONABLE; DID NOT ESTABLISH, MAINTAIN, AND ENFORCEREASONABLY DESIGNED WRITTEN SUPERVISORY PROCEDURES TOSUPERVISE ITS DMA ACTIVITIES AND TO ASSURE ITS COMPLIANCE WITHAPPLICABLE SECURITIES LAWS.

VIOLATION OF EDGX RULES 5.1, 3.1; RULE 15C3-5 PROMULGATED BY THESECURITIES AND EXCHANGE COMMISSION PURSUANT TO THESECURITIES EXCHANGE ACT OF 1934.

SANCTION: A CENSURE AND A MONETARY FINE IN THE AMOUNT OF$591,500. IN ADDITION, CREDIT SUISSE SECURITIES (USA) LLC MUSTCOMPLY WITH THE UNDERTAKINGS DETAILED IN THE LETTER OFCONSENT.







Initiated By: CBOE EDGX EXCHANGE, INC.




CREDIT SUISSE SECURITIES (USA) LLC MUST COMPLY WITH THEUNDERTAKINGS DETAILED IN THE LETTER OF CONSENT.


Docket/Case Number: STAR NO. 20120347345 / FILE NO. USRI-2820

Principal Product Type: Equity Listed (Common & Preferred Stock)


CREDIT SUISSE SECURITIES (USA) LLC DID NOT REASONABLY MONITORAND SURVEIL FOR POTENTIALLY MANIPULATIVE TRADING BY DIRECTMARKET ACCESS (DMA) CLIENTS; DID NOT REASONABLY SUPERVISE ITSCLIENT'S DMA ACTIVITY FOR POTENTIALLY MANIPULATIVE TRADING; DIDNOT HAVE PRE-TRADE CONTROLS THAT WERE REASONABLY DESIGNEDTO PREVENT ERRONEOUS ORDERS; DID NOT HAVE PRE-TRADECONTROLS AND PROCEDURES REGARDING CREDIT THRESHOLDS THATWERE REASONABLE; DID NOT HAVE AN ANNUAL REVIEW THAT WASREASONABLE; DID NOT ESTABLISH, MAINTAIN, AND ENFORCEREASONABLY DESIGNED WRITTEN SUPERVISORY PROCEDURES TOSUPERVISE ITS DMA ACTIVITIES AND TO ASSURE ITS COMPLIANCE WITHAPPLICABLE SECURITIES LAWS.

VIOLATION OF EDGX RULES 5.1, 3.1; RULE 15C3-5 PROMULGATED BY THESECURITIES AND EXCHANGE COMMISSION PURSUANT TO THESECURITIES EXCHANGE ACT OF 1934.



Resolution:


Sanction Details: A CENSURE AND A MONETARY FINE IN THE AMOUNT OF $591,500. INADDITION, CREDIT SUISSE SECURITIES (USA) LLC MUST COMPLY WITHTHE UNDERTAKINGS DETAILED IN THE LETTER OF CONSENT.


Consent

iReporting Source:







Initiated By: CBOE EDGX EXCHANGE, INC


Censure




Docket/Case Number: STAR NO. 20120347345, USRI-2820



Allegations: CBOE EDGX EXCHANGE, INC ("EDGX") ALLEGED THAT, BETWEEN JULY2010 AND AUGUST 2016, CREDIT SUISSE SECURITIES (USA) LLC ("CSSU")VIOLATED SECURITIES EXCHANGE COMMISSION RULE 15C3-5 AND CBOEEDGX EXCHANGE RULES 5.1 AND 3.1, PRINCIPALLY CONCERNING PRE-TRADE CONTROLS AND POST-TRADE SURVEILLANCES.



Resolution:


Sanction Details: EDGX CENSURED THE FIRM AND IMPOSED A $591,500 FINE, WHICH HASBEEN PAID. CSSU ALSO AGREED THAT IT WILL PROVIDE (I) WRITTENCONFIRMATION THAT IT HAS UPDATED RELEVANT CONTROLS ANDPROCEDURES AND (II) DESCRIPTIONS OR DOCUMENTATION REGARDINGTHOSE CONTROLS AND PROCEDURES, AS OUTLINED IN THE PUBLICLYAVAILABLE SETTLEMENT DOCUMENT.


Consent


i







Initiated By: CBOE EDGA EXCHANGE, INC.









Allegations: CREDIT SUISSE SECURITIES (USA) LLC DID NOT REASONABLY MONITORAND SURVEIL FOR POTENTIALLY MANIPULATIVE TRADING BY DIRECTMARKET ACCESS (DMA) CLIENTS; DID NOT REASONABLY SUPERVISE IT'SCLIENT'S DMA ACTIVITY FOR POTENTIALLY MANIPULATIVE TRADING; DIDNOT HAVE PRE-TRADE CONTROLS THAT WERE REASONABLY DESIGNEDTO PREVENT ERRONEOUS ORDERS; DID NOT HAVE PRE-TRADECONTROLS AND PROCEDURES REGARDING CREDIT THRESHOLDS THATWERE REASONABLE; DID NOT HAVE AN ANNUAL REVIEW THAT WASREASONABLE; DID NOT ESTABLISH, MAINTAIN, AND ENFORCEREASONABLE DESIGNED WRITTEN SUPERVISORY PROCEDURES TOSUPERVISE ITS DMA ACTIVITIES AND TO ASSURE ITS COMPLIANCE WITHAPPLICABLE SECURITIES LAWS.

VIOLATION OF EDGA RULES 5.1, 3.1; RULE 15C3-5 PROMULGATED BY THESECURITIES AND EXCHANGE COMMISSION PURSUANT TO THESECURITIES EXCHANGE ACT OF 1934.




Resolution:


No

Consent






Other Sanctions Ordered: CREDIT SUISSE SECURITIES (USA) LLC MUST COMPLY WITH THEUNDERTAKINGS DETAILED IN THE LETTER OF CONSENT.



No



Initiated By: CBOE EDGA EXCHANGE, INC


Censure







Allegations: CBOE EDGA EXCHANGE, INC ("EDGA") ALLEGED THAT, BETWEEN JULY2010 AND AUGUST 2016, CREDIT SUISSE SECURITIES (USA) LLC ("CSSU")VIOLATED SECURITIES EXCHANGE COMMISSION RULE 15C3-5 AND EDGARULES 5.1 AND 3.1, PRINCIPALLY CONCERNING PRE-TRADE CONTROLSAND POST-TRADE SURVEILLANCES.



Resolution:


Consent







Sanction Details: EDGA CENSURED THE FIRM AND IMPOSED A $591,500 FINE, WHICH HASBEEN PAID. CSSU ALSO AGREED THAT IT WILL PROVIDE (I) WRITTENCONFIRMATION THAT IT HAS UPDATED RELEVANT CONTROLS ANDPROCEDURES AND (II) DESCRIPTIONS OR DOCUMENTATION REGARDINGTHOSE CONTROLS AND PROCEDURES, AS OUTLINED IN THE PUBLICLYAVAILABLE SETTLEMENT DOCUMENT.



i


Initiated By: CBOE BZX EXCHANGE, INC.




Allegations: CREDIT SUISSE SECURITIES (USA) LLC DID NOT REASONABLY MONITORAND SURVEIL FOR POTENTIALLY MANIPULATIVE TRADING BY DIRECTMARKET ACCESS (DMA) CLIENTS; DID NOT REASONABLY SUPERVISE ITSCLIENT'S DMA ACTIVITY FOR POTENTIALLY MANIPULATIVE TRADING; DIDNOT HAVE PRE-TRADE CONTROLS THAT WERE REASONABLY DESIGNEDTO PREVENT ERRONEOUS ORDERS; DID NOT HAVE PRE-TRADECONTROLS AND PROCEDURES REGARDING CREDIT THRESHOLDS THATWERE REASONABLE; DID NOT HAVE AN ANNUAL REVIEW THAT WASREASONABLE; DID NOT ESTABLISH, MAINTAIN, AND ENFORCEREASONABLY DESIGNED WRITTEN SUPERVISORY PROCEDURES TOSUPERVISE ITS DMA ACTIVITIES AND TO ASSURE ITS COMPLIANCE WITHAPPLICABLE SECURITIES LAWS.

VIOLATION OF BZX RULES 5.1, 3.1; RULE 15C3-5 PROMULGATED BY THESECURITIES AND EXCHANGE COMMISSION PURSUANT TO THESECURITIES EXCHANGE ACT OF 1934.















Resolution:

Other Sanctions Ordered: CREDIT SUISSE SECURITIES (USA) LLC MUST COMPLY WITH THEUNDERTAKINGS DETAILED IN THE LETTER OF CONSENT.



No


Consent


Initiated By: CBOE BZX EXCHANGE, INC


Censure





Allegations: CBOE BZX EXCHANGE, INC ("BZX") ALLEGED THAT, BETWEEN JULY 2010AND AUGUST 2016, CREDIT SUISSE SECURITIES (USA) LLC ("CSSU")VIOLATED SECURITIES EXCHANGE COMMISSION RULE 15C3-5 AND BZXRULES 5.1 AND 3.1, PRINCIPALLY CONCERNING PRE-TRADE CONTROLSAND POST-TRADE SURVEILLANCES.








Censure




Resolution:


Sanction Details: BZX CENSURED THE FIRM AND IMPOSED A $608,833 FINE WHICH HASBEEN PAID. CSSU ALSO AGREED THAT IT WILL PROVIDE (I) WRITTENCONFIRMATION THAT IT HAS UPDATED RELEVANT CONTROLS ANDPROCEDURES AND (II) DESCRIPTIONS OR DOCUMENTATION REGARDINGTHOSE CONTROLS AND PROCEDURES, AS OUTLINED IN THE PUBLICLYAVAILABLE SETTLEMENT DOCUMENT.


Consent


i


Allegations: CREDIT SUISSE SECURITIES (USA) LLC DID NOT REASONABLY MONITORAND SURVEIL FOR POTENTIALLY MANIPULATIVE TRADING BY DIRECTMARKET ACCESS (DMA) CLIENTS; DID NOT REASONABLY SUPERVISE ITSCLIENT'S DMA ACTIVITY FOR POTENTIALLY MANIPULATIVE TRADING; DIDNOT HAVE PRE-TRADE CONTROLS THAT WERE REASONABLY DESIGNEDTO PREVENT ERRONEOUS ORDERS; DID NOT HAVE PRE-TRADECONTROLS AND PROCEDURES REGARDING CREDIT THRESHOLDS THATWERE REASONABLE; DID NOT HAVE AN ANNUAL REVIEW THAT WASREASONABLE; DID NOT ESTABLISH, MAINTAIN, AND ENFORCEREASONABLY DESIGNED WRITTEN SUPERVISORY PROCEDURES TOSUPERVISE ITS DMA ACTIVITIES AND TO ASSURE COMPLIANCE WITHAPPLICABLE SECURITIES LAWS.

VIOLATION OF BYX RULES 5.1, 3.1; RULE 15C3-5 PROMULGATED BY THESECURITIES AND EXCHANGE COMMISSION PURSUANT TO THESECURITIES EXCHANGE ACT OF 1934.








Initiated By: CBOE BYX EXCHANGE, INC.




ADDITIONAL SANCTION: CREDIT SUISSE SECURITIES (USA) LLC MUSTCOMPLY WITH THE UNDERTAKINGS DETAILED IN THE LETTER OFCONSENT.





CREDIT SUISSE SECURITIES (USA) LLC DID NOT REASONABLY MONITORAND SURVEIL FOR POTENTIALLY MANIPULATIVE TRADING BY DIRECTMARKET ACCESS (DMA) CLIENTS; DID NOT REASONABLY SUPERVISE ITSCLIENT'S DMA ACTIVITY FOR POTENTIALLY MANIPULATIVE TRADING; DIDNOT HAVE PRE-TRADE CONTROLS THAT WERE REASONABLY DESIGNEDTO PREVENT ERRONEOUS ORDERS; DID NOT HAVE PRE-TRADECONTROLS AND PROCEDURES REGARDING CREDIT THRESHOLDS THATWERE REASONABLE; DID NOT HAVE AN ANNUAL REVIEW THAT WASREASONABLE; DID NOT ESTABLISH, MAINTAIN, AND ENFORCEREASONABLY DESIGNED WRITTEN SUPERVISORY PROCEDURES TOSUPERVISE ITS DMA ACTIVITIES AND TO ASSURE COMPLIANCE WITHAPPLICABLE SECURITIES LAWS.

VIOLATION OF BYX RULES 5.1, 3.1; RULE 15C3-5 PROMULGATED BY THESECURITIES AND EXCHANGE COMMISSION PURSUANT TO THESECURITIES EXCHANGE ACT OF 1934.



Resolution:

Other Sanctions Ordered: UNDERTAKINGS DETAILED IN THE LETTER OF CONSENT



No


Consent


Allegations: CBOE BYX EXCHANGE, INC ("BYX") ALLEGED THAT, BETWEEN OCTOBER2010 AND AUGUST 2016, CREDIT SUISSE SECURITIES (USA) LLC ("CSSU")VIOLATED SECURITIES EXCHANGE COMMISSION RULE 15C3-5 AND BYXRULES 5.1 AND 3.1, PRINCIPALLY CONCERNING PRE-TRADE CONTROLSAND POST-TRADE SURVEILLANCES.







Initiated By: CBOE BYX EXCHANGE, INC


Censure







Allegations: CBOE BYX EXCHANGE, INC ("BYX") ALLEGED THAT, BETWEEN OCTOBER2010 AND AUGUST 2016, CREDIT SUISSE SECURITIES (USA) LLC ("CSSU")VIOLATED SECURITIES EXCHANGE COMMISSION RULE 15C3-5 AND BYXRULES 5.1 AND 3.1, PRINCIPALLY CONCERNING PRE-TRADE CONTROLSAND POST-TRADE SURVEILLANCES.


Resolution:


Sanction Details: BYX CENSURED THE FIRM AND IMPOSED A $591,500 FINE, WHICH HASBEEN PAID. CSSU ALSO AGREED THAT IT WILL PROVIDE (I) WRITTENCONFIRMATION THAT IT HAS UPDATED RELEVANT CONTROLS ANDPROCEDURES AND (II) DESCRIPTIONS OR DOCUMENTATION REGARDINGTHOSE CONTROLS AND PROCEDURES, AS OUTLINED IN THE PUBLICLYAVAILABLE SETTLEMENT DOCUMENT.


Consent


i


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT EXECUTEDOVER 300 BILLION SHARES ON BEHALF OF ITS DIRECT MARKET ACCESS(DMA) CLIENTS AND GENERATED OVER $300 MILLION IN REVENUE FROMITS DMA BUSINESS, NEVERTHELESS, IT DID NOT IMPLEMENTREASONABLY DESIGNED SURVEILLANCES AND SUPERVISORYPROCEDURES TO MONITOR FOR CERTAIN KINDS OF POTENTIALLYMANIPULATIVE ACTIVITY BY ITS DMA CLIENTS. THE FINDINGS STATEDTHAT DURING THE PERIOD OF FEBRUARY 2011 THROUGH JULY 2014,CERTAIN OF THE FIRM'S DMA CLIENTS ENGAGED IN TRADING ACTIVITYTHAT GENERATED OVER 50,000 ALERTS AT FINRA AND MULTIPLEEXCHANGES FOR POTENTIAL MANIPULATIVE TRADING, INCLUDINGSPOOFING, LAYERING, WASH SALES AND PRE¬ARRANGED TRADING.AMONG THE FIRM'S DMA CLIENTS WERE THREE THAT, AT THEIR PEAK INJUNE 2014, ACCOUNTED FOR ABOUT 20 PERCENT OF THE FIRM'SOVERALL ORDER FLOW AND TRIGGERED A MAJORITY OF THE ALERTSFOR POTENTIALLY MANIPULATIVE TRADING. THE FIRM, HOWEVER, DIDNOT BEGIN TO IMPLEMENT A SUPERVISORY SYSTEM OR PROCEDURESREASONABLY DESIGNED TO REVIEW FOR POTENTIAL SPOOFING,LAYERING, WASH SALES OR PRE-ARRANGED TRADING BY ITS DMACLIENTS UNTIL THE FALL OF 2013 - YEARS AFTER IT BEGAN EXPANDINGITS DMA BUSINESS. DURING THIS PERIOD, THE FIRM GREW ITS DMAACTIVITY FROM EXECUTING 0.7 BILLION SHARES FOR ITS DMA CLIENTS IN2010 TO 104 BILLION SHARES IN 2014. HOWEVER, THE FIRM DID NOT MEETITS SUPERVISORY OBLIGATIONS, DESPITE THE IMPLEMENTATION OFEXCHANGE ACT RULE 15C3-5 (THE MARKET ACCESS RULE) ANDACCOMPANYING REGULATORY GUIDANCE. IN ADDITION, IN 2012 AND 2013,THE FIRM WAS PUT ON NOTICE OF GAPS IN ITS SURVEILLANCE SYSTEMBY RED FLAGS RAISED IN CORRESPONDENCE WITH A DMA CLIENT AND BYAN INTERNAL AUDIT. THE FINDINGS ALSO STATED THAT THE FIRM DID NOTIMPLEMENT EFFECTIVE POST-TRADE CONTROLS TO MONITOR FOR THEPARTICULAR TYPES OF POTENTIAL MANIPULATIVE ACTIVITY BY ITS DMACLIENTS, AND THEREBY IT DID NOT ESTABLISH, DOCUMENT, ANDMAINTAIN RISK MANAGEMENT CONTROLS AND SUPERVISORYPROCEDURES REASONABLY DESIGNED TO ENSURE COMPLIANCE WITHALL REGULATORY REQUIREMENTS. THE FINDINGS ALSO INCLUDED THATTHE FIRM ALSO DID NOT COMPLY FULLY WITH MARKET ACCESS RULEPROVISIONS RELATED TO THE SETTING OF CREDIT LIMITS AND ANNUALREVIEW. SPECIFICALLY, THE FIRM SET A DEFAULT CREDIT LIMIT OF $250MILLION FOR EVERY DMA CLIENT DURING ONBOARDING WITHOUTCONSIDERING THE INDIVIDUAL CLIENT'S FINANCIAL CONDITION,BUSINESS, TRADING PATTERNS AND OTHER MATTERS. ADDITIONALLY,ALTHOUGH ITS WRITTEN PROCEDURES REQUIRED THAT DUE DILIGENCEBE PERFORMED PRIOR TO MAKING ANY CHANGES TO A DEFAULT LIMIT,THE FIRM DID NOT PERFORM DUE DILIGENCE PRIOR TO MAKING SUCHAMENDMENTS IN CERTAIN CIRCUMSTANCES. IN ADDITION, THE FIRM'SANNUAL REVIEW OF THE EFFECTIVENESS OF ITS RULE 15C3-5 RISKMANAGEMENT CONTROLS AND SUPERVISORY PROCEDURES WASUNREASONABLE BECAUSE IT DID NOT INCORPORATE A REASONABLEREVIEW OF THE EFFECTIVENESS OF ITS POST-TRADE SURVEILLANCE.THUS, THROUGHOUT THE REVIEW PERIOD, THE FIRM DID NOT ESTABLISH,MAINTAIN, AND ENFORCE REASONABLY DESIGNED WSPS TO SUPERVISEITS DMA ACTIVITIES AND TO ACHIEVE COMPLIANCE WITH APPLICABLESECURITIES LAWS.







Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT EXECUTEDOVER 300 BILLION SHARES ON BEHALF OF ITS DIRECT MARKET ACCESS(DMA) CLIENTS AND GENERATED OVER $300 MILLION IN REVENUE FROMITS DMA BUSINESS, NEVERTHELESS, IT DID NOT IMPLEMENTREASONABLY DESIGNED SURVEILLANCES AND SUPERVISORYPROCEDURES TO MONITOR FOR CERTAIN KINDS OF POTENTIALLYMANIPULATIVE ACTIVITY BY ITS DMA CLIENTS. THE FINDINGS STATEDTHAT DURING THE PERIOD OF FEBRUARY 2011 THROUGH JULY 2014,CERTAIN OF THE FIRM'S DMA CLIENTS ENGAGED IN TRADING ACTIVITYTHAT GENERATED OVER 50,000 ALERTS AT FINRA AND MULTIPLEEXCHANGES FOR POTENTIAL MANIPULATIVE TRADING, INCLUDINGSPOOFING, LAYERING, WASH SALES AND PRE¬ARRANGED TRADING.AMONG THE FIRM'S DMA CLIENTS WERE THREE THAT, AT THEIR PEAK INJUNE 2014, ACCOUNTED FOR ABOUT 20 PERCENT OF THE FIRM'SOVERALL ORDER FLOW AND TRIGGERED A MAJORITY OF THE ALERTSFOR POTENTIALLY MANIPULATIVE TRADING. THE FIRM, HOWEVER, DIDNOT BEGIN TO IMPLEMENT A SUPERVISORY SYSTEM OR PROCEDURESREASONABLY DESIGNED TO REVIEW FOR POTENTIAL SPOOFING,LAYERING, WASH SALES OR PRE-ARRANGED TRADING BY ITS DMACLIENTS UNTIL THE FALL OF 2013 - YEARS AFTER IT BEGAN EXPANDINGITS DMA BUSINESS. DURING THIS PERIOD, THE FIRM GREW ITS DMAACTIVITY FROM EXECUTING 0.7 BILLION SHARES FOR ITS DMA CLIENTS IN2010 TO 104 BILLION SHARES IN 2014. HOWEVER, THE FIRM DID NOT MEETITS SUPERVISORY OBLIGATIONS, DESPITE THE IMPLEMENTATION OFEXCHANGE ACT RULE 15C3-5 (THE MARKET ACCESS RULE) ANDACCOMPANYING REGULATORY GUIDANCE. IN ADDITION, IN 2012 AND 2013,THE FIRM WAS PUT ON NOTICE OF GAPS IN ITS SURVEILLANCE SYSTEMBY RED FLAGS RAISED IN CORRESPONDENCE WITH A DMA CLIENT AND BYAN INTERNAL AUDIT. THE FINDINGS ALSO STATED THAT THE FIRM DID NOTIMPLEMENT EFFECTIVE POST-TRADE CONTROLS TO MONITOR FOR THEPARTICULAR TYPES OF POTENTIAL MANIPULATIVE ACTIVITY BY ITS DMACLIENTS, AND THEREBY IT DID NOT ESTABLISH, DOCUMENT, ANDMAINTAIN RISK MANAGEMENT CONTROLS AND SUPERVISORYPROCEDURES REASONABLY DESIGNED TO ENSURE COMPLIANCE WITHALL REGULATORY REQUIREMENTS. THE FINDINGS ALSO INCLUDED THATTHE FIRM ALSO DID NOT COMPLY FULLY WITH MARKET ACCESS RULEPROVISIONS RELATED TO THE SETTING OF CREDIT LIMITS AND ANNUALREVIEW. SPECIFICALLY, THE FIRM SET A DEFAULT CREDIT LIMIT OF $250MILLION FOR EVERY DMA CLIENT DURING ONBOARDING WITHOUTCONSIDERING THE INDIVIDUAL CLIENT'S FINANCIAL CONDITION,BUSINESS, TRADING PATTERNS AND OTHER MATTERS. ADDITIONALLY,ALTHOUGH ITS WRITTEN PROCEDURES REQUIRED THAT DUE DILIGENCEBE PERFORMED PRIOR TO MAKING ANY CHANGES TO A DEFAULT LIMIT,THE FIRM DID NOT PERFORM DUE DILIGENCE PRIOR TO MAKING SUCHAMENDMENTS IN CERTAIN CIRCUMSTANCES. IN ADDITION, THE FIRM'SANNUAL REVIEW OF THE EFFECTIVENESS OF ITS RULE 15C3-5 RISKMANAGEMENT CONTROLS AND SUPERVISORY PROCEDURES WASUNREASONABLE BECAUSE IT DID NOT INCORPORATE A REASONABLEREVIEW OF THE EFFECTIVENESS OF ITS POST-TRADE SURVEILLANCE.THUS, THROUGHOUT THE REVIEW PERIOD, THE FIRM DID NOT ESTABLISH,MAINTAIN, AND ENFORCE REASONABLY DESIGNED WSPS TO SUPERVISEITS DMA ACTIVITIES AND TO ACHIEVE COMPLIANCE WITH APPLICABLESECURITIES LAWS.






Initiated By: FINRA







WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT EXECUTEDOVER 300 BILLION SHARES ON BEHALF OF ITS DIRECT MARKET ACCESS(DMA) CLIENTS AND GENERATED OVER $300 MILLION IN REVENUE FROMITS DMA BUSINESS, NEVERTHELESS, IT DID NOT IMPLEMENTREASONABLY DESIGNED SURVEILLANCES AND SUPERVISORYPROCEDURES TO MONITOR FOR CERTAIN KINDS OF POTENTIALLYMANIPULATIVE ACTIVITY BY ITS DMA CLIENTS. THE FINDINGS STATEDTHAT DURING THE PERIOD OF FEBRUARY 2011 THROUGH JULY 2014,CERTAIN OF THE FIRM'S DMA CLIENTS ENGAGED IN TRADING ACTIVITYTHAT GENERATED OVER 50,000 ALERTS AT FINRA AND MULTIPLEEXCHANGES FOR POTENTIAL MANIPULATIVE TRADING, INCLUDINGSPOOFING, LAYERING, WASH SALES AND PRE¬ARRANGED TRADING.AMONG THE FIRM'S DMA CLIENTS WERE THREE THAT, AT THEIR PEAK INJUNE 2014, ACCOUNTED FOR ABOUT 20 PERCENT OF THE FIRM'SOVERALL ORDER FLOW AND TRIGGERED A MAJORITY OF THE ALERTSFOR POTENTIALLY MANIPULATIVE TRADING. THE FIRM, HOWEVER, DIDNOT BEGIN TO IMPLEMENT A SUPERVISORY SYSTEM OR PROCEDURESREASONABLY DESIGNED TO REVIEW FOR POTENTIAL SPOOFING,LAYERING, WASH SALES OR PRE-ARRANGED TRADING BY ITS DMACLIENTS UNTIL THE FALL OF 2013 - YEARS AFTER IT BEGAN EXPANDINGITS DMA BUSINESS. DURING THIS PERIOD, THE FIRM GREW ITS DMAACTIVITY FROM EXECUTING 0.7 BILLION SHARES FOR ITS DMA CLIENTS IN2010 TO 104 BILLION SHARES IN 2014. HOWEVER, THE FIRM DID NOT MEETITS SUPERVISORY OBLIGATIONS, DESPITE THE IMPLEMENTATION OFEXCHANGE ACT RULE 15C3-5 (THE MARKET ACCESS RULE) ANDACCOMPANYING REGULATORY GUIDANCE. IN ADDITION, IN 2012 AND 2013,THE FIRM WAS PUT ON NOTICE OF GAPS IN ITS SURVEILLANCE SYSTEMBY RED FLAGS RAISED IN CORRESPONDENCE WITH A DMA CLIENT AND BYAN INTERNAL AUDIT. THE FINDINGS ALSO STATED THAT THE FIRM DID NOTIMPLEMENT EFFECTIVE POST-TRADE CONTROLS TO MONITOR FOR THEPARTICULAR TYPES OF POTENTIAL MANIPULATIVE ACTIVITY BY ITS DMACLIENTS, AND THEREBY IT DID NOT ESTABLISH, DOCUMENT, ANDMAINTAIN RISK MANAGEMENT CONTROLS AND SUPERVISORYPROCEDURES REASONABLY DESIGNED TO ENSURE COMPLIANCE WITHALL REGULATORY REQUIREMENTS. THE FINDINGS ALSO INCLUDED THATTHE FIRM ALSO DID NOT COMPLY FULLY WITH MARKET ACCESS RULEPROVISIONS RELATED TO THE SETTING OF CREDIT LIMITS AND ANNUALREVIEW. SPECIFICALLY, THE FIRM SET A DEFAULT CREDIT LIMIT OF $250MILLION FOR EVERY DMA CLIENT DURING ONBOARDING WITHOUTCONSIDERING THE INDIVIDUAL CLIENT'S FINANCIAL CONDITION,BUSINESS, TRADING PATTERNS AND OTHER MATTERS. ADDITIONALLY,ALTHOUGH ITS WRITTEN PROCEDURES REQUIRED THAT DUE DILIGENCEBE PERFORMED PRIOR TO MAKING ANY CHANGES TO A DEFAULT LIMIT,THE FIRM DID NOT PERFORM DUE DILIGENCE PRIOR TO MAKING SUCHAMENDMENTS IN CERTAIN CIRCUMSTANCES. IN ADDITION, THE FIRM'SANNUAL REVIEW OF THE EFFECTIVENESS OF ITS RULE 15C3-5 RISKMANAGEMENT CONTROLS AND SUPERVISORY PROCEDURES WASUNREASONABLE BECAUSE IT DID NOT INCORPORATE A REASONABLEREVIEW OF THE EFFECTIVENESS OF ITS POST-TRADE SURVEILLANCE.THUS, THROUGHOUT THE REVIEW PERIOD, THE FIRM DID NOT ESTABLISH,MAINTAIN, AND ENFORCE REASONABLY DESIGNED WSPS TO SUPERVISEITS DMA ACTIVITIES AND TO ACHIEVE COMPLIANCE WITH APPLICABLESECURITIES LAWS.


Resolution:


Sanction Details: THE FIRM WAS CENSURED AND FINED A TOTAL OF $6,500,000, OF WHICH$566,583 SHALL BE PAID TO FINRA.

THE FIRM AGREES TO CONFIRM IN WRITING, WITHIN 180 DAYS OF THEDATE OF THE ISSUANCE OF THE NOTICE OF ACCEPTANCE OF THIS AWC,THAT IT HAS PERFORMED RELEVANT UNDERTAKINGS, AS DESCRIBED INTHE AWC, INCLUDING, AMONG OTHERS, UPDATING AND/ORIMPLEMENTING SURVEILLANCES AND PROCEDURES REASONABLYDESIGNED TO MONITOR FOR POTENTIALLY MANIPULATIVE TRADING, ANDUPDATING ITS WRITTEN SUPERVISORY PROCEDURES RELEVANT TO ITSDEFICIENCIES. IN CONJUNCTION WITH THE CONFIRMATION, THE FIRMALSO AGREES TO PROVIDE A WRITTEN DESCRIPTION OF, ORDOCUMENTATION REFLECTING, AS OF DECEMBER 31, 2019: THE DESKSTHAT PROVIDE MARKET ACCESS SERVICES TO CLIENTS; THE STATUS ANDRATIONALE FOR ITS EXISTING PRE-TRADE ERRONEOUS ORDER ANDCREDIT CONTROLS AND POST-TRADE ANTI-MANIPULATIONSURVEILLANCES FOR POTENTIAL SPOOFING, LAYERING, WASH SALES,PRE-ARRANGED TRADING, AND MARKING THE OPEN/CLOSE THAT AREUSED BY OR FOR DESKS THAT PROVIDE MARKET ACCESS SERVICES;PROCEDURES FOR SETTING, MODIFYING, AND ENFORCING CREDIT LIMITSAPPLICABLE TO MARKET ACCESS CUSTOMERS; AND WHICH PRE-TRADECONTROLS AND POST-TRADE ANTI-MANIPULATION SURVEILLANCESAPPLY TO PRODUCTS OTHER THAN EQUITIES.


No







https://www.finra.org/rules-guidance/oversight-enforcement/finra-disciplinary-actions?search=2012034734501


THE FIRM WAS CENSURED AND FINED A TOTAL OF $6,500,000, OF WHICH$566,583 SHALL BE PAID TO FINRA.

THE FIRM AGREES TO CONFIRM IN WRITING, WITHIN 180 DAYS OF THEDATE OF THE ISSUANCE OF THE NOTICE OF ACCEPTANCE OF THIS AWC,THAT IT HAS PERFORMED RELEVANT UNDERTAKINGS, AS DESCRIBED INTHE AWC, INCLUDING, AMONG OTHERS, UPDATING AND/ORIMPLEMENTING SURVEILLANCES AND PROCEDURES REASONABLYDESIGNED TO MONITOR FOR POTENTIALLY MANIPULATIVE TRADING, ANDUPDATING ITS WRITTEN SUPERVISORY PROCEDURES RELEVANT TO ITSDEFICIENCIES. IN CONJUNCTION WITH THE CONFIRMATION, THE FIRMALSO AGREES TO PROVIDE A WRITTEN DESCRIPTION OF, ORDOCUMENTATION REFLECTING, AS OF DECEMBER 31, 2019: THE DESKSTHAT PROVIDE MARKET ACCESS SERVICES TO CLIENTS; THE STATUS ANDRATIONALE FOR ITS EXISTING PRE-TRADE ERRONEOUS ORDER ANDCREDIT CONTROLS AND POST-TRADE ANTI-MANIPULATIONSURVEILLANCES FOR POTENTIAL SPOOFING, LAYERING, WASH SALES,PRE-ARRANGED TRADING, AND MARKING THE OPEN/CLOSE THAT AREUSED BY OR FOR DESKS THAT PROVIDE MARKET ACCESS SERVICES;PROCEDURES FOR SETTING, MODIFYING, AND ENFORCING CREDIT LIMITSAPPLICABLE TO MARKET ACCESS CUSTOMERS; AND WHICH PRE-TRADECONTROLS AND POST-TRADE ANTI-MANIPULATION SURVEILLANCESAPPLY TO PRODUCTS OTHER THAN EQUITIES.

Regulator Statement ACCEPTANCE OF THE AWC IS CONDITIONED UPON ACCEPTANCE OF ASIMILAR AGREEMENT IN RELATED MATTERS BETWEEN THE FIRM ANDOTHER SROS. THE AGGREGATE SETTLEMENT AMOUNT ACROSS ALLMARKETS IS THE $6,500,000. FINES PAID IN FULL ON DECEMBER 30, 2019.


Initiated By: FINANCIAL INDUSTRY REGULATORY AUTHORITY


Censure







Allegations: FINANCIAL INDUSTRY REGULATORY AUTHORITY ("FINRA") ALLEGED THAT,BETWEEN JULY 2010 AND AUGUST 2015, CREDIT SUISSE SECURITIES(USA) LLC ("CSSU") VIOLATED SECURITIES EXCHANGE COMMISSION RULE15C3-5, NASD RULE 3010 (FOR CONDUCT OCCURRING BEFOREDECEMBER 1, 2014), AND FINRA RULES 3110 (FOR CONDUCT OCCURRINGON AND AFTER DECEMBER 1, 2014) AND 2010, PRINCIPALLY CONCERNINGPRE-TRADE CONTROLS AND POST-TRADE SURVEILLANCES.









Resolution:


Sanction Details: FINRA CENSURED THE FIRM AND IMPOSED A $566,583 FINE, WHICH HASBEEN PAID. CSSU ALSO AGREED THAT IT WILL PROVIDE (I) WRITTENCONFIRMATION THAT IT HAS UPDATED RELEVANT CONTROLS ANDPROCEDURES AND (II) DESCRIPTIONS OR DOCUMENTATION REGARDINGTHOSE CONTROLS AND PROCEDURES, AS OUTLINED IN THE PUBLICLYAVAILABLE SETTLEMENT DOCUMENT.




i


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, CREDIT SUISSESECURITIES (USA), LLC ("CSSU" OR THE "FIRM") CONSENTED TO THESANCTIONS AND TO THE ENTRY OF FINDINGS THAT CSSU VIOLATED NYSERULE 123C(3), ON THREE TRADE DATES, BY IMPROPERLY CANCELLINGAND/OR REDUCING A TOTAL OF 12,483 MARKET-ON-CLOSE ("MOC")AND/OR LIMIT-ON-CLOSE ("LOC") ORDERS AFTER THE PRESCRIBED CUT-OFF TIME OF 3:45 P.M., WHEN CANCELLATIONS OR REDUCTIONS AREONLY PERMITTED TO CORRECT LEGITIMATE ERRORS. THE FINDINGSSTATED THAT ON THREE TRADE DATES DURING THE RELEVANT PERIOD,CSSU CANCELLED OR IMPROPERLY MODIFIED THE 12,483 CLOSINGORDERS AFTER THE PRESCRIBED CUT-OFF TIME OF 3:45 P.M., ABSENTANY LEGITIMATE ERRORS. THE FIRM ATTRIBUTED ALL OF THECANCELLATIONS TO AN AUTOMATED TOOL IN THE FIRM'S TRADINGAPPLICATION, WHICH CANCELLED ALL LIVE ORDERS WITH THEEXCHANGE, INCLUDING CLOSING ORDERS, AFTER A TRADINGAPPLICATION EXPERIENCED CONNECTIVITY ISSUES WITH THE NYSE. THETOOL WAS NOT CONFIGURED TO EXCLUDE CLOSING ORDERSREGARDLESS OF TIME. THE REMAINING TWO MODIFICATIONS WEREATTRIBUTED TO MANUAL USER ENTRY. NONE OF THE CIRCUMSTANCESOF MODIFICATION OR CANCELLATION CONSTITUTED THE CORRECTIONOF A LEGITIMATE ERROR. THE FINDINGS ALSO STATED THAT THE FIRMALSO VIOLATED NYSE RULE 3110 BY FAILING TO IMPLEMENT ADEQUATESUPERVISORY SYSTEMS AND CONTROLS REASONABLY DESIGNED TOACHIEVE COMPLIANCE WITH NYSE RULE 123C.











Docket/Case Number: 2017-12-00104



WITHOUT ADMITTING OR DENYING THE FINDINGS, CREDIT SUISSESECURITIES (USA), LLC ("CSSU" OR THE "FIRM") CONSENTED TO THESANCTIONS AND TO THE ENTRY OF FINDINGS THAT CSSU VIOLATED NYSERULE 123C(3), ON THREE TRADE DATES, BY IMPROPERLY CANCELLINGAND/OR REDUCING A TOTAL OF 12,483 MARKET-ON-CLOSE ("MOC")AND/OR LIMIT-ON-CLOSE ("LOC") ORDERS AFTER THE PRESCRIBED CUT-OFF TIME OF 3:45 P.M., WHEN CANCELLATIONS OR REDUCTIONS AREONLY PERMITTED TO CORRECT LEGITIMATE ERRORS. THE FINDINGSSTATED THAT ON THREE TRADE DATES DURING THE RELEVANT PERIOD,CSSU CANCELLED OR IMPROPERLY MODIFIED THE 12,483 CLOSINGORDERS AFTER THE PRESCRIBED CUT-OFF TIME OF 3:45 P.M., ABSENTANY LEGITIMATE ERRORS. THE FIRM ATTRIBUTED ALL OF THECANCELLATIONS TO AN AUTOMATED TOOL IN THE FIRM'S TRADINGAPPLICATION, WHICH CANCELLED ALL LIVE ORDERS WITH THEEXCHANGE, INCLUDING CLOSING ORDERS, AFTER A TRADINGAPPLICATION EXPERIENCED CONNECTIVITY ISSUES WITH THE NYSE. THETOOL WAS NOT CONFIGURED TO EXCLUDE CLOSING ORDERSREGARDLESS OF TIME. THE REMAINING TWO MODIFICATIONS WEREATTRIBUTED TO MANUAL USER ENTRY. NONE OF THE CIRCUMSTANCESOF MODIFICATION OR CANCELLATION CONSTITUTED THE CORRECTIONOF A LEGITIMATE ERROR. THE FINDINGS ALSO STATED THAT THE FIRMALSO VIOLATED NYSE RULE 3110 BY FAILING TO IMPLEMENT ADEQUATESUPERVISORY SYSTEMS AND CONTROLS REASONABLY DESIGNED TOACHIEVE COMPLIANCE WITH NYSE RULE 123C.


Resolution:




No




Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, CREDIT SUISSESECURITIES (USA), LLC ("CSSU" OR THE "FIRM") CONSENTED TO THESANCTIONS AND TO THE ENTRY OF FINDINGS THAT CSSU VIOLATED NYSERULE 123C(3), ON THREE TRADE DATES, BY IMPROPERLY CANCELLINGAND/OR REDUCING A TOTAL OF 12,483 MARKET-ON-CLOSE ("MOC")AND/OR LIMIT-ON-CLOSE ("LOC") ORDERS AFTER THE PRESCRIBED CUT-OFF TIME OF 3:45 P.M., WHEN CANCELLATIONS OR REDUCTIONS AREONLY PERMITTED TO CORRECT LEGITIMATE ERRORS. THE FINDINGSSTATED THAT ON THREE TRADE DATES DURING THE RELEVANT PERIOD,CSSU CANCELLED OR IMPROPERLY MODIFIED THE 12,483 CLOSINGORDERS AFTER THE PRESCRIBED CUT-OFF TIME OF 3:45 P.M., ABSENTANY LEGITIMATE ERRORS. THE FIRM ATTRIBUTED ALL OF THECANCELLATIONS TO AN AUTOMATED TOOL IN THE FIRM'S TRADINGAPPLICATION, WHICH CANCELLED ALL LIVE ORDERS WITH THEEXCHANGE, INCLUDING CLOSING ORDERS, AFTER A TRADINGAPPLICATION EXPERIENCED CONNECTIVITY ISSUES WITH THE NYSE. THETOOL WAS NOT CONFIGURED TO EXCLUDE CLOSING ORDERSREGARDLESS OF TIME. THE REMAINING TWO MODIFICATIONS WEREATTRIBUTED TO MANUAL USER ENTRY. NONE OF THE CIRCUMSTANCESOF MODIFICATION OR CANCELLATION CONSTITUTED THE CORRECTIONOF A LEGITIMATE ERROR. THE FINDINGS ALSO STATED THAT THE FIRMALSO VIOLATED NYSE RULE 3110 BY FAILING TO IMPLEMENT ADEQUATESUPERVISORY SYSTEMS AND CONTROLS REASONABLY DESIGNED TOACHIEVE COMPLIANCE WITH NYSE RULE 123C.














WITHOUT ADMITTING OR DENYING THE FINDINGS, CREDIT SUISSESECURITIES (USA), LLC ("CSSU" OR THE "FIRM") CONSENTED TO THESANCTIONS AND TO THE ENTRY OF FINDINGS THAT CSSU VIOLATED NYSERULE 123C(3), ON THREE TRADE DATES, BY IMPROPERLY CANCELLINGAND/OR REDUCING A TOTAL OF 12,483 MARKET-ON-CLOSE ("MOC")AND/OR LIMIT-ON-CLOSE ("LOC") ORDERS AFTER THE PRESCRIBED CUT-OFF TIME OF 3:45 P.M., WHEN CANCELLATIONS OR REDUCTIONS AREONLY PERMITTED TO CORRECT LEGITIMATE ERRORS. THE FINDINGSSTATED THAT ON THREE TRADE DATES DURING THE RELEVANT PERIOD,CSSU CANCELLED OR IMPROPERLY MODIFIED THE 12,483 CLOSINGORDERS AFTER THE PRESCRIBED CUT-OFF TIME OF 3:45 P.M., ABSENTANY LEGITIMATE ERRORS. THE FIRM ATTRIBUTED ALL OF THECANCELLATIONS TO AN AUTOMATED TOOL IN THE FIRM'S TRADINGAPPLICATION, WHICH CANCELLED ALL LIVE ORDERS WITH THEEXCHANGE, INCLUDING CLOSING ORDERS, AFTER A TRADINGAPPLICATION EXPERIENCED CONNECTIVITY ISSUES WITH THE NYSE. THETOOL WAS NOT CONFIGURED TO EXCLUDE CLOSING ORDERSREGARDLESS OF TIME. THE REMAINING TWO MODIFICATIONS WEREATTRIBUTED TO MANUAL USER ENTRY. NONE OF THE CIRCUMSTANCESOF MODIFICATION OR CANCELLATION CONSTITUTED THE CORRECTIONOF A LEGITIMATE ERROR. THE FINDINGS ALSO STATED THAT THE FIRMALSO VIOLATED NYSE RULE 3110 BY FAILING TO IMPLEMENT ADEQUATESUPERVISORY SYSTEMS AND CONTROLS REASONABLY DESIGNED TOACHIEVE COMPLIANCE WITH NYSE RULE 123C.


Resolution:



Firm Statement CREDIT SUISSE SECURITIES (USA) LLC (CSSU) RESOLVED THE MATTERWITHOUT ADMITTING OR DENYING THE FINDINGS BY CONSENTING TO ACENSURE AND A $67,500 FINE.




i







Initiated By: CBOE FUTURES EXCHANGE





Docket/Case Number: CFE 18-0006


Other Product Type(s): MARKET-PRICE ORDERS

Allegations: THE CONDUCT IN QUESTION CONSTITUTES A VIOLATION OF CFE RULES608 AND 620 IN THAT THE FIRMS DID NOT ADEQUATELY TEST ITSALGORITHM FOR MARKET IMPACT PRIOR TO DEPLOYMENT, WHICH LED TOA DISRUPTION OF THE ORDERLY EXECUTION OF TRANSACTIONS DURINGTHE CLOSING PERIOD. THE FIRMS ARE SANCTIONED $85,000, FOR WHICHTHE FIRMS SHALL BE JOINTLY AND SEVERALLY LIABLE. THE FIRST FIRMSUNDERSTAND AND ACKNOWLEDGE THAT THE BUSINESS CONDUCTCOMMITTEE'S ("COMMITTEE") DECISION IN THIS MATTER WILL BECOMEPART OF ITS DISCIPLINARY RECORD AND MAY BE CONSIDERED IN ANYFUTURE EXCHANGE PROCEEDING. THE FIRMS ALSO ACKNOWLEDGETHAT THE COMMITTEE'S DECISION TO ACCEPT OR REJECT THIS LETTEROF CONSENT IS FINAL, AND THAT THE FIRMS MAY NOT SEEK REVIEWTHEREOF IN ACCORDANCE WITH EXCHANGE RULE 703.



Resolution:


Sanction Details: SANCTIONED $85,000.000, FOR WHICH THE FIRMS ARE JOINTLY ANDSEVERELY LIABLE.

Firm Statement THE CONDUCT IN QUESTION CONSTITUTES A VIOLATION OF CFE RULES608 AND 620 IN THAT THE FIRMS DID NOT ADEQUATELY TEST ITSALGORITHM FOR MARKET IMPACT PRIOR TO DEPLOYMENT, WHICH LED TOA DISRUPTION OF THE ORDERLY EXECUTION OF TRANSACTIONS DURINGTHE CLOSING PERIOD. THE FIRMS ARE SANCTIONED $85,000, FOR WHICHTHE FIRMS SHALL BE JOINTLY AND SEVERALLY LIABLE. THE FIRST FIRMSUNDERSTAND AND ACKNOWLEDGE THAT THE BUSINESS CONDUCTCOMMITTEE'S ("COMMITTEE") DECISION IN THIS MATTER WILL BECOMEPART OF ITS DISCIPLINARY RECORD AND MAY BE CONSIDERED IN ANYFUTURE EXCHANGE PROCEEDING. THE FIRMS ALSO ACKNOWLEDGETHAT THE COMMITTEE'S DECISION TO ACCEPT OR REJECT THIS LETTEROF CONSENT IS FINAL, AND THAT THE FIRMS MAY NOT SEEK REVIEWTHEREOF IN ACCORDANCE WITH EXCHANGE RULE 703.

Sanctions Ordered: Monetary/Fine $85,000.00

Stipulation and Consent






THE CONDUCT IN QUESTION CONSTITUTES A VIOLATION OF CFE RULES608 AND 620 IN THAT THE FIRMS DID NOT ADEQUATELY TEST ITSALGORITHM FOR MARKET IMPACT PRIOR TO DEPLOYMENT, WHICH LED TOA DISRUPTION OF THE ORDERLY EXECUTION OF TRANSACTIONS DURINGTHE CLOSING PERIOD. THE FIRMS ARE SANCTIONED $85,000, FOR WHICHTHE FIRMS SHALL BE JOINTLY AND SEVERALLY LIABLE. THE FIRST FIRMSUNDERSTAND AND ACKNOWLEDGE THAT THE BUSINESS CONDUCTCOMMITTEE'S ("COMMITTEE") DECISION IN THIS MATTER WILL BECOMEPART OF ITS DISCIPLINARY RECORD AND MAY BE CONSIDERED IN ANYFUTURE EXCHANGE PROCEEDING. THE FIRMS ALSO ACKNOWLEDGETHAT THE COMMITTEE'S DECISION TO ACCEPT OR REJECT THIS LETTEROF CONSENT IS FINAL, AND THAT THE FIRMS MAY NOT SEEK REVIEWTHEREOF IN ACCORDANCE WITH EXCHANGE RULE 703.


i








Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, CREDIT SUISSESECURITIES (USA) LLC ("CSSU" OR THE "FIRM") CONSENTED TO THESANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOREASONABLY EVIDENCE THE ACTIONS TAKEN BY THE FIRM AS A RESULTOF ANY SIGNIFICANT REGULATORY ISSUES IDENTIFIED FROM ITSREVIEWS OF EMPLOYEE ELECTRONIC COMMUNICATIONS. THE FINDINGSSTATED THAT FOR ITS FIRST-LEVEL REVIEWS, CSSU PRIMARILY USES ALEXICON-BASED APPROACH TO COLLECT AND REVIEW ELECTRONICCOMMUNICATIONS THAT ITS EMPLOYEES SEND AND RECEIVE BOTHINTERNALLY AND EXTERNALLY. FRONT OFFICE SUPERVISORS ARERESPONSIBLE FOR THE FIRST-LEVEL REVIEW AND CONDUCT THEREVIEWS IN A SUITABLE REVIEW PLATFORM. ELECTRONICCOMMUNICATIONS THAT REQUIRE FURTHER INVESTIGATION AREESCALATED TO COMPLIANCE PERSONNEL, AND THEN COMPLIANCEPERSONNEL WILL FOLLOW UP WITH OTHER APPROPRIATE INDIVIDUALS ATCSSU IF NEEDED. WHILE CSSU MAY HAVE MAINTAINED WRITTENEVIDENCE OF ACTIONS TAKEN AS A RESULT OF SIGNIFICANTREGULATORY ISSUES IDENTIFIED DURING ELECTRONICCOMMUNICATIONS REVIEWS, IT DID NOT MAINTAIN THE EVIDENCE OROTHERWISE REASONABLY CHRONICLE ACTIONS TAKEN BY THE FIRM INTHE REVIEW PLATFORM. INSTEAD, IN ORDER TO DETERMINE WHATHAPPENED WITH AN ESCALATION, FOR EXAMPLE, CSSU HAD TOMANUALLY CONSULT WITH DIFFERENT INTERNAL DEPARTMENTS ON AONE-OFF BASIS AND ASK THEM TO REPORT THE OUTCOME AND PROVIDEANY DOCUMENTATION RELATING THERETO.










Resolution:



Regulator Statement IN RESOLVING THIS MATTER, NYSE REGULATION ENFORCEMENT("ENFORCEMENT") TOOK INTO ACCOUNT CSSU'S REMEDIATION. PART OFCSSU'S EFFORTS HAVE INCLUDED, AMONG OTHER THINGS, REPLACINGITS REVIEW PLATFORM, WHICH WILL ALLOW FOR DESCRIPTIONS OFACTIONS TAKEN BY THE FIRM AS A RESULT OF ANY ESCALATIONS ORINVESTIGATIONS AND/OR CROSS REFERENCE TO OTHER FIRMDATABASES THAT CONTAIN THE RELEVANT RESOLUTIONS AND RELATEDINFORMATION. THESE ENHANCEMENTS WERE CONTEMPLATED BY CSSUPRIOR TO ENFORCEMENT'S INVESTIGATION.


No




Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, CREDIT SUISSESECURITIES (USA) LLC ("CSSU" OR THE "FIRM") CONSENTED TO THESANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOREASONABLY EVIDENCE THE ACTIONS TAKEN BY THE FIRM AS A RESULTOF ANY SIGNIFICANT REGULATORY ISSUES IDENTIFIED FROM ITSREVIEWS OF EMPLOYEE ELECTRONIC COMMUNICATIONS. THE FINDINGSSTATED THAT FOR ITS FIRST-LEVEL REVIEWS, CSSU PRIMARILY USES ALEXICON-BASED APPROACH TO COLLECT AND REVIEW ELECTRONICCOMMUNICATIONS THAT ITS EMPLOYEES SEND AND RECEIVE BOTHINTERNALLY AND EXTERNALLY. FRONT OFFICE SUPERVISORS ARERESPONSIBLE FOR THE FIRST-LEVEL REVIEW AND CONDUCT THEREVIEWS IN A SUITABLE REVIEW PLATFORM. ELECTRONICCOMMUNICATIONS THAT REQUIRE FURTHER INVESTIGATION AREESCALATED TO COMPLIANCE PERSONNEL, AND THEN COMPLIANCEPERSONNEL WILL FOLLOW UP WITH OTHER APPROPRIATE INDIVIDUALS ATCSSU IF NEEDED. WHILE CSSU MAY HAVE MAINTAINED WRITTENEVIDENCE OF ACTIONS TAKEN AS A RESULT OF SIGNIFICANTREGULATORY ISSUES IDENTIFIED DURING ELECTRONICCOMMUNICATIONS REVIEWS, IT DID NOT MAINTAIN THE EVIDENCE OROTHERWISE REASONABLY CHRONICLE ACTIONS TAKEN BY THE FIRM INTHE REVIEW PLATFORM. INSTEAD, IN ORDER TO DETERMINE WHATHAPPENED WITH AN ESCALATION, FOR EXAMPLE, CSSU HAD TOMANUALLY CONSULT WITH DIFFERENT INTERNAL DEPARTMENTS ON AONE-OFF BASIS AND ASK THEM TO REPORT THE OUTCOME AND PROVIDEANY DOCUMENTATION RELATING THERETO.







Initiated By: NEW YORK STOCK EXCHANGE LLC




CENSURE





WITHOUT ADMITTING OR DENYING THE FINDINGS, CREDIT SUISSESECURITIES (USA) LLC ("CSSU" OR THE "FIRM") CONSENTED TO THESANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOREASONABLY EVIDENCE THE ACTIONS TAKEN BY THE FIRM AS A RESULTOF ANY SIGNIFICANT REGULATORY ISSUES IDENTIFIED FROM ITSREVIEWS OF EMPLOYEE ELECTRONIC COMMUNICATIONS. THE FINDINGSSTATED THAT FOR ITS FIRST-LEVEL REVIEWS, CSSU PRIMARILY USES ALEXICON-BASED APPROACH TO COLLECT AND REVIEW ELECTRONICCOMMUNICATIONS THAT ITS EMPLOYEES SEND AND RECEIVE BOTHINTERNALLY AND EXTERNALLY. FRONT OFFICE SUPERVISORS ARERESPONSIBLE FOR THE FIRST-LEVEL REVIEW AND CONDUCT THEREVIEWS IN A SUITABLE REVIEW PLATFORM. ELECTRONICCOMMUNICATIONS THAT REQUIRE FURTHER INVESTIGATION AREESCALATED TO COMPLIANCE PERSONNEL, AND THEN COMPLIANCEPERSONNEL WILL FOLLOW UP WITH OTHER APPROPRIATE INDIVIDUALS ATCSSU IF NEEDED. WHILE CSSU MAY HAVE MAINTAINED WRITTENEVIDENCE OF ACTIONS TAKEN AS A RESULT OF SIGNIFICANTREGULATORY ISSUES IDENTIFIED DURING ELECTRONICCOMMUNICATIONS REVIEWS, IT DID NOT MAINTAIN THE EVIDENCE OROTHERWISE REASONABLY CHRONICLE ACTIONS TAKEN BY THE FIRM INTHE REVIEW PLATFORM. INSTEAD, IN ORDER TO DETERMINE WHATHAPPENED WITH AN ESCALATION, FOR EXAMPLE, CSSU HAD TOMANUALLY CONSULT WITH DIFFERENT INTERNAL DEPARTMENTS ON AONE-OFF BASIS AND ASK THEM TO REPORT THE OUTCOME AND PROVIDEANY DOCUMENTATION RELATING THERETO.


Resolution:


Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC (CSSU) RESOLVED THE MATTERON A NO-ADMIT-NO-DENY BASIS BY CONSENTING TO A CENSURE AND A$12,500 FINE. CSSU'S FINE PAYMENT IS DUE ON DECEMBER 10, 2018.

Firm Statement CREDIT SUISSE SECURITIES (USA) LLC (CSSU) RESOLVED THE MATTERON A NO-ADMIT-NO-DENY BASIS BY CONSENTING TO A CENSURE AND A$12,500 FINE. CSSU'S FINE PAYMENT IS DUE ON DECEMBER 10, 2018.




i







Allegations: SEC ADMIN RELEASE 33-10565; 34-84314, SEPTEMBER 28, 2018.THE SECURITIES AND EXCHANGE COMMISSION ("COMMISSION") DEEMS ITAPPROPRIATE AND IN THE PUBLIC INTEREST THAT PUBLICADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BE INSTITUTEDAGAINST CREDIT SUISSE SECURITIES (USA) LLC ("RESPONDENT" OR "CREDIT SUISSE").THE COMMISSION FINDS THAT BROKER-DEALERS THAT EXECUTEORDERS FOR RETAIL CUSTOMERS OFTEN SEND SUCH ORDERS TOOTHER BROKER-DEALERS THAT SPECIALIZE IN HANDLING SUCH ORDERFLOW. BETWEEN MID-2011 AND MARCH 2015 (THE "RELEVANT PERIOD"),CREDIT SUISSE OPERATED A WHOLESALE MARKET MAKING DESK CALLEDRETAIL EXECUTION SERVICES ("RES") IN ORDER TO EXECUTE THIS TYPEOF ORDER FLOW. DURING THIS PERIOD, RES EXECUTED BOTH "HELD"AND "NOT HELD" EQUITY ORDERS FOR ITS RETAIL BROKER-DEALERCUSTOMERS, INCLUDING OVER 15 MILLION HELD RETAIL-ORIGINATEDEQUITY ORDERS (OVER 8.5 BILLION SHARES) HAVING A TOTAL MARKETVALUE OF APPROXIMATELY $227 BILLION. BEGINNING IN MID-2011 ANDCONTINUING UNTIL MARCH 2015, WHEN RES CLOSED, RES MADEMATERIAL MISREPRESENTATIONS AND OMISSIONS CONCERNING ITSHANDLING OF HELD RETAIL EQUITY ORDERS, IN VIOLATION OF SECTION17(A)(2) OF THE SECURITIES ACT.RES SOUGHT TO DIFFERENTIATE ITSELF BY MARKETING ITS ACCESS TO "VAST" DARK LIQUIDITY IN CREDIT SUISSE'S OWN ALTERNATIVE TRADINGSYSTEM ("ATS") AND DARK POOL, AS WELL AS RES'S ACCESS TO DARKPOOLS OPERATED BY OTHER BROKER-DEALERS. DARK POOLS AREMARKETS IN WHICH BIDS AND OFFERS ARE NOT VISIBLE TO MARKETPARTICIPANTS, UNLIKE DISPLAYED EXCHANGES AND MARKETS (I.E. "LITMARKETS"). DURING THE RELEVANT PERIOD, RES REPRESENTED IN ITSMARKETING MATERIALS THAT RES OFFERED "ENHANCED LIQUIDITY" BYACCESSING INTERNAL AND EXTERNAL POOLS OF LIQUIDITY, INCLUDINGACCESS TO CREDIT SUISSE'S OWN AND OTHER DARK POOLS. HOWEVER,RES EXECUTED ONLY A DE MINIMIS NUMBER OF HELD ORDERS (UNLIKENOT HELD ORDERS) IN DARK POOLS.RES FURTHER REPRESENTED IN ITS ORDER HANDLING GUIDE THATOPPORTUNITIES FOR "ROBUST" AND "ENHANCED" PRICE IMPROVEMENTWAS ONE OF THE "CORE" ELEMENTS OF RES'S APPROACH TO EXECUTINGORDERS. PROVIDING A BETTER PRICE THAN THE CURRENTLY QUOTEDBEST BID OR ASK PRICE IS COMMONLY REFERRED TO AS "PRICEIMPROVEMENT." ALTHOUGH RES DESCRIBED THE FACTORS RELEVANT TOTHE SECURITIES FOR WHICH IT WOULD PROVIDE PRICE IMPROVEMENT, ITDID NOT DISCLOSE THAT A SUBSET OF ORDERS FOR WHICH EXECUTIONQUALITY WAS NOT INCLUDED IN PUBLICLY REPORTED EXECUTIONQUALITY REPORTS PURSUANT TO COMMISSION RULE 605 ("NON-605"ORDERS) TYPICALLY WOULD NOT RECEIVE ANY PRICE IMPROVEMENT.RES STATED IN ITS ORDER HANDLING GUIDE THAT IT WOULD SEEK TOEXECUTE CUSTOMER ORDERS AT THE "MOST FAVORABLE TERMSREASONABLY AVAILABLE." RES ALSO REPRESENTED IN ITS ORDERHANDLING GUIDE THAT WHEN RES COMMITS CAPITAL, "[T]HE BENEFIT TOOUR CUSTOMER IS A FILL WITHOUT MARKET IMPACT. THE MORE LIQUIDITYWE OFFER, THE LESS IMPACT A CUSTOMER'S ORDER WILL HAVE ON THENBBO [I.E., THE NATIONAL BEST BID AND OFFER], POTENTIALLY AVOIDINGPRICE DIS-IMPROVEMENT."DESPITE THESE STATEMENTS, FOR CERTAIN ORDERS, RES USED AROUTING TACTIC THAT SENT AN ORDER ONLY TO LIT MARKETS(REFERRED TO HEREIN AS "ROUTING TACTIC A") WITHOUT FIRSTATTEMPTING TO FILL THE ORDER IN CREDIT SUISSE'S AND OTHER DARKPOOLS AND ELECTRONIC LIQUIDITY PROVIDERS ("ELPS"). RES APPLIEDROUTING TACTIC A DISPROPORTIONALLY OFTEN TO NON-605 ORDERS(IDENTIFIED USING THE "COUNTSFORSTATS" FUNCTION) THAT WERELARGER THAN (I.E., "OUTSIZED") THE NUMBER OF SHARES DISPLAYED ATTHE THEN-PREVAILING MARKET PRICE, AND THUS HAD THE POTENTIAL TOCAUSE MARKET IMPACT. RES'S USE OF ROUTING TACTIC A PROVIDED RESAN OPPORTUNITY TO PROFIT FROM, OR "CAPTURE," MARKET IMPACT IFTHERE WAS POST-TRADE PRICE REVERSION, IN WHICH STOCK PRICESTHAT HAVE BEEN TEMPORARILY DISPLACED AS A RESULT OF MARKETACTIVITY MAY REVERT TOWARD THE ORIGINAL PRICE LEVEL. THEFREQUENCY WITH WHICH RES USED ROUTING TACTIC A FOR CERTAINOUTSIZED ORDERS WAS NOT DISCLOSED IN RES'S MARKETINGMATERIALS.









Cease and Desist





Other Product Type(s): RETAIL-ORIGINATED EQUITY ORDERS

SEC ADMIN RELEASE 33-10565; 34-84314, SEPTEMBER 28, 2018.THE SECURITIES AND EXCHANGE COMMISSION ("COMMISSION") DEEMS ITAPPROPRIATE AND IN THE PUBLIC INTEREST THAT PUBLICADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BE INSTITUTEDAGAINST CREDIT SUISSE SECURITIES (USA) LLC ("RESPONDENT" OR "CREDIT SUISSE").THE COMMISSION FINDS THAT BROKER-DEALERS THAT EXECUTEORDERS FOR RETAIL CUSTOMERS OFTEN SEND SUCH ORDERS TOOTHER BROKER-DEALERS THAT SPECIALIZE IN HANDLING SUCH ORDERFLOW. BETWEEN MID-2011 AND MARCH 2015 (THE "RELEVANT PERIOD"),CREDIT SUISSE OPERATED A WHOLESALE MARKET MAKING DESK CALLEDRETAIL EXECUTION SERVICES ("RES") IN ORDER TO EXECUTE THIS TYPEOF ORDER FLOW. DURING THIS PERIOD, RES EXECUTED BOTH "HELD"AND "NOT HELD" EQUITY ORDERS FOR ITS RETAIL BROKER-DEALERCUSTOMERS, INCLUDING OVER 15 MILLION HELD RETAIL-ORIGINATEDEQUITY ORDERS (OVER 8.5 BILLION SHARES) HAVING A TOTAL MARKETVALUE OF APPROXIMATELY $227 BILLION. BEGINNING IN MID-2011 ANDCONTINUING UNTIL MARCH 2015, WHEN RES CLOSED, RES MADEMATERIAL MISREPRESENTATIONS AND OMISSIONS CONCERNING ITSHANDLING OF HELD RETAIL EQUITY ORDERS, IN VIOLATION OF SECTION17(A)(2) OF THE SECURITIES ACT.RES SOUGHT TO DIFFERENTIATE ITSELF BY MARKETING ITS ACCESS TO "VAST" DARK LIQUIDITY IN CREDIT SUISSE'S OWN ALTERNATIVE TRADINGSYSTEM ("ATS") AND DARK POOL, AS WELL AS RES'S ACCESS TO DARKPOOLS OPERATED BY OTHER BROKER-DEALERS. DARK POOLS AREMARKETS IN WHICH BIDS AND OFFERS ARE NOT VISIBLE TO MARKETPARTICIPANTS, UNLIKE DISPLAYED EXCHANGES AND MARKETS (I.E. "LITMARKETS"). DURING THE RELEVANT PERIOD, RES REPRESENTED IN ITSMARKETING MATERIALS THAT RES OFFERED "ENHANCED LIQUIDITY" BYACCESSING INTERNAL AND EXTERNAL POOLS OF LIQUIDITY, INCLUDINGACCESS TO CREDIT SUISSE'S OWN AND OTHER DARK POOLS. HOWEVER,RES EXECUTED ONLY A DE MINIMIS NUMBER OF HELD ORDERS (UNLIKENOT HELD ORDERS) IN DARK POOLS.RES FURTHER REPRESENTED IN ITS ORDER HANDLING GUIDE THATOPPORTUNITIES FOR "ROBUST" AND "ENHANCED" PRICE IMPROVEMENTWAS ONE OF THE "CORE" ELEMENTS OF RES'S APPROACH TO EXECUTINGORDERS. PROVIDING A BETTER PRICE THAN THE CURRENTLY QUOTEDBEST BID OR ASK PRICE IS COMMONLY REFERRED TO AS "PRICEIMPROVEMENT." ALTHOUGH RES DESCRIBED THE FACTORS RELEVANT TOTHE SECURITIES FOR WHICH IT WOULD PROVIDE PRICE IMPROVEMENT, ITDID NOT DISCLOSE THAT A SUBSET OF ORDERS FOR WHICH EXECUTIONQUALITY WAS NOT INCLUDED IN PUBLICLY REPORTED EXECUTIONQUALITY REPORTS PURSUANT TO COMMISSION RULE 605 ("NON-605"ORDERS) TYPICALLY WOULD NOT RECEIVE ANY PRICE IMPROVEMENT.RES STATED IN ITS ORDER HANDLING GUIDE THAT IT WOULD SEEK TOEXECUTE CUSTOMER ORDERS AT THE "MOST FAVORABLE TERMSREASONABLY AVAILABLE." RES ALSO REPRESENTED IN ITS ORDERHANDLING GUIDE THAT WHEN RES COMMITS CAPITAL, "[T]HE BENEFIT TOOUR CUSTOMER IS A FILL WITHOUT MARKET IMPACT. THE MORE LIQUIDITYWE OFFER, THE LESS IMPACT A CUSTOMER'S ORDER WILL HAVE ON THENBBO [I.E., THE NATIONAL BEST BID AND OFFER], POTENTIALLY AVOIDINGPRICE DIS-IMPROVEMENT."DESPITE THESE STATEMENTS, FOR CERTAIN ORDERS, RES USED AROUTING TACTIC THAT SENT AN ORDER ONLY TO LIT MARKETS(REFERRED TO HEREIN AS "ROUTING TACTIC A") WITHOUT FIRSTATTEMPTING TO FILL THE ORDER IN CREDIT SUISSE'S AND OTHER DARKPOOLS AND ELECTRONIC LIQUIDITY PROVIDERS ("ELPS"). RES APPLIEDROUTING TACTIC A DISPROPORTIONALLY OFTEN TO NON-605 ORDERS(IDENTIFIED USING THE "COUNTSFORSTATS" FUNCTION) THAT WERELARGER THAN (I.E., "OUTSIZED") THE NUMBER OF SHARES DISPLAYED ATTHE THEN-PREVAILING MARKET PRICE, AND THUS HAD THE POTENTIAL TOCAUSE MARKET IMPACT. RES'S USE OF ROUTING TACTIC A PROVIDED RESAN OPPORTUNITY TO PROFIT FROM, OR "CAPTURE," MARKET IMPACT IFTHERE WAS POST-TRADE PRICE REVERSION, IN WHICH STOCK PRICESTHAT HAVE BEEN TEMPORARILY DISPLACED AS A RESULT OF MARKETACTIVITY MAY REVERT TOWARD THE ORIGINAL PRICE LEVEL. THEFREQUENCY WITH WHICH RES USED ROUTING TACTIC A FOR CERTAINOUTSIZED ORDERS WAS NOT DISCLOSED IN RES'S MARKETINGMATERIALS.


Resolution:


Yes

Order







Sanction Details: THE FIRM WAS CENSURED, FINED $5,000,000, AND ORDERED TO CEASEAND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANYFUTURE VIOLATIONS OF SECTION 17(A)(2) OF THE SECURITIES ACT.

Regulator Statement RESPONDENT HAS SUBMITTED AN OFFER OF SETTLEMENT ("OFFER")WHICH THE COMMISSION HAS DETERMINED TO ACCEPT.RESPONDENT WILLFULLY VIOLATED SECTION 17(A)(2) OF THE SECURITIESACTIT IS HEREBY ORDERED THAT RESPONDENT IS CENSURED AND SHALLCEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONSAND ANY FUTURE VIOLATIONS OF SECTION 17(A) (2)OF THE SECURITIESACT. RESPONDENT SHALL PAY A CIVIL MONEY PENALTY IN THE AMOUNTOF $5,000,000.


Yes

Sanctions Ordered: CensureMonetary/Fine $5,000,000.00Cease and Desist/Injunction




Docket/Case Number: IN THE MATTER OF CREDIT SUISSE SECURITIES (USA) LLC, AP FILE NO. 3-18857


Allegations: CREDIT SUISSE SECURITIES (USA) LLC ("CSSU") CONSENTED, WITHOUTADMITTING OR DENYING THE FINDINGS, TO THE ENTRY OF A SECURITIESAND EXCHANGE COMMISSION ("SEC") ORDER FINDING THAT CSSUNEGLIGENTLY VIOLATED SECTION 17(A)(2) OF THE SECURITIES ACT INCONNECTION WITH DISCLOSURES CONCERNING CSSU'S FORMER RETAILEXECUTION SERVICES DESK'S HANDLING OF CERTAIN ORDERS SENT BYITS BROKER-DEALER CUSTOMERS. AS PART OF THE SETTLEMENT, THESEC ISSUED A CEASE-AND-DESIST ORDER, CENSURED CSSU, ANDDIRECTED IT TO PAY A $5 MILLION CIVIL PENALTY.










CEASE AND DESIST; CENSURE


Other Product Type(s): LISTED EQUITY


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, CREDIT SUISSESECURITIES (USA) LLC CONSENTED TO A SEC CEASE-AND-DESIST ORDERAND CENSURE, AND A $5 MILLION CIVIL PENALTY, WHICH WAS PAID ONOCTOBER 5, 2018.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS, CREDIT SUISSESECURITIES (USA) LLC CONSENTED TO A SEC CEASE-AND-DESIST ORDERAND CENSURE, AND A $5 MILLION CIVIL PENALTY, WHICH WAS PAID ONOCTOBER 5, 2018.


Order


i


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT INAPPROXIMATELY 31,000 INSTANCES, THE FIRM REPORTEDAPPROXIMATELY 31,000 POSITIONS TO THE LARGE OPTIONS POSITIONREPORTING (LOPR) SYSTEM WITH AN INCORRECT EFFECTIVE DATE. THEFINDINGS STATED THAT AS A RESULT OF A TECHNICAL ERROR IN THEFIRM'S LOPR REPORTING PROGRAM, IN MILLIONS OF INSTANCES THEFIRM REPORTED POSITIONS TO THE LOPR WITH INACCURATE ACCOUNTNAME OR ADDRESS FIELDS AS INFORMATION IN THE ACCOUNT NAMEDATA FIELD SPILLED OVER INTO THE ACCOUNT ADDRESS DATA FIELD.BECAUSE THE FIRM REPORTED ALL OF THESE POSITIONS TO THE LOPRAND THESE INACCURACIES DID NOT ALTER THE POSITION DATA, THEACCOUNTS WERE ABLE TO BE IDENTIFIED FOR SURVEILLANCEPURPOSES. IN APPROXIMATELY 55,000 INSTANCES, THE FIRMINCORRECTLY DELETED APPROXIMATELY 55,000 POSITIONS FROM THELOPR. IN APPROXIMATELY 55,000 INSTANCES, THE FIRM FAILED TOREPORT APPROXIMATELY 55,000 LONG SHORT POSITIONS TO THE LOPR.THE FIRM FAILED TO REPORT AT LEAST 31 FOREIGN AFFILIATE ACCOUNTSAS ACTING IN CONCERT. THE FINDINGS ALSO STATED THAT THE FIRMFAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM THAT WASREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THEAPPLICABLE SECURITIES LAWS AND REGULATIONS, AND BOX RULES,CONCERNING THE REPORTING OF POSITIONS TO THE LOPR. IN ADDITION,THE FIRM'S WSPS WERE INADEQUATE BECAUSE THEY FAILED TOINCLUDE A DESCRIPTION OF THE REVIEWS THE FIRM CONDUCTED TOENSURE THE OVERALL ACCURACY OF ITS LOPR SUBMISSIONS, AND ANADEQUATE DESCRIPTION OF THE STEPS TAKEN BY THE FIRM TO REVIEWAND DETERMINE IF ACCOUNTS WERE ACTING IN-CONCERT.







Initiated By: BOX OPTIONS EXCHANGE LLC







WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT INAPPROXIMATELY 31,000 INSTANCES, THE FIRM REPORTEDAPPROXIMATELY 31,000 POSITIONS TO THE LARGE OPTIONS POSITIONREPORTING (LOPR) SYSTEM WITH AN INCORRECT EFFECTIVE DATE. THEFINDINGS STATED THAT AS A RESULT OF A TECHNICAL ERROR IN THEFIRM'S LOPR REPORTING PROGRAM, IN MILLIONS OF INSTANCES THEFIRM REPORTED POSITIONS TO THE LOPR WITH INACCURATE ACCOUNTNAME OR ADDRESS FIELDS AS INFORMATION IN THE ACCOUNT NAMEDATA FIELD SPILLED OVER INTO THE ACCOUNT ADDRESS DATA FIELD.BECAUSE THE FIRM REPORTED ALL OF THESE POSITIONS TO THE LOPRAND THESE INACCURACIES DID NOT ALTER THE POSITION DATA, THEACCOUNTS WERE ABLE TO BE IDENTIFIED FOR SURVEILLANCEPURPOSES. IN APPROXIMATELY 55,000 INSTANCES, THE FIRMINCORRECTLY DELETED APPROXIMATELY 55,000 POSITIONS FROM THELOPR. IN APPROXIMATELY 55,000 INSTANCES, THE FIRM FAILED TOREPORT APPROXIMATELY 55,000 LONG SHORT POSITIONS TO THE LOPR.THE FIRM FAILED TO REPORT AT LEAST 31 FOREIGN AFFILIATE ACCOUNTSAS ACTING IN CONCERT. THE FINDINGS ALSO STATED THAT THE FIRMFAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM THAT WASREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THEAPPLICABLE SECURITIES LAWS AND REGULATIONS, AND BOX RULES,CONCERNING THE REPORTING OF POSITIONS TO THE LOPR. IN ADDITION,THE FIRM'S WSPS WERE INADEQUATE BECAUSE THEY FAILED TOINCLUDE A DESCRIPTION OF THE REVIEWS THE FIRM CONDUCTED TOENSURE THE OVERALL ACCURACY OF ITS LOPR SUBMISSIONS, AND ANADEQUATE DESCRIPTION OF THE STEPS TAKEN BY THE FIRM TO REVIEWAND DETERMINE IF ACCOUNTS WERE ACTING IN-CONCERT.


Resolution:


Sanction Details: THE FIRM WAS CENSURED, FINED THE AMOUNT OF $200,000, OF WHICH$125,000 IS PAYABLE TO BOX, AND REQUIRED TO ADDRESS ITS LARGEOPTIONS POSITION REPORTING (LOPR) DEFICIENCIES AND DEFICIENTSUPERVISORY SYSTEM AND WSPS, AND TO ENSURE THAT IT HASIMPLEMENTED CONTROLS AND PROCEDURES THAT ARE REASONABLYDESIGNED TO ACHIEVE COMPLIANCE WITH THE APPLICABLE BOX RULESAND REGULATIONS. THE FIRM WILL PAY THE BALANCE OF THE FINE TOFINRA IN A RELATED MATTER.


No


Consent





www.finra.org/brokercheck User GuidanceTHE FIRM WAS CENSURED, FINED THE AMOUNT OF $200,000, OF WHICH$125,000 IS PAYABLE TO BOX, AND REQUIRED TO ADDRESS ITS LARGEOPTIONS POSITION REPORTING (LOPR) DEFICIENCIES AND DEFICIENTSUPERVISORY SYSTEM AND WSPS, AND TO ENSURE THAT IT HASIMPLEMENTED CONTROLS AND PROCEDURES THAT ARE REASONABLYDESIGNED TO ACHIEVE COMPLIANCE WITH THE APPLICABLE BOX RULESAND REGULATIONS. THE FIRM WILL PAY THE BALANCE OF THE FINE TOFINRA IN A RELATED MATTER.


Initiated By: BOX OPTIONS EXCHANGE LLC






Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT INAPPROXIMATELY 31,000 INSTANCES, THE FIRM REPORTEDAPPROXIMATELY 31,000 POSITIONS TO THE LARGE OPTIONS POSITIONREPORTING (LOPR) SYSTEM WITH AN INCORRECT EFFECTIVE DATE. THEFINDINGS STATED THAT AS A RESULT OF A TECHNICAL ERROR IN THEFIRM'S LOPR REPORTING PROGRAM, IN MILLIONS OF INSTANCES THEFIRM REPORTED POSITIONS TO THE LOPR WITH INACCURATE ACCOUNTNAME OR ADDRESS FIELDS AS INFORMATION IN THE ACCOUNT NAMEDATA FIELD SPILLED OVER INTO THE ACCOUNT ADDRESS DATA FIELD.BECAUSE THE FIRM REPORTED ALL OF THESE POSITIONS TO THE LOPRAND THESE INACCURACIES DID NOT ALTER THE POSITION DATA, THEACCOUNTS WERE ABLE TO BE IDENTIFIED FOR SURVEILLANCEPURPOSES. IN APPROXIMATELY 55,000 INSTANCES, THE FIRMINCORRECTLY DELETED APPROXIMATELY 55,000 POSITIONS FROM THELOPR. IN APPROXIMATELY 55,000 INSTANCES, THE FIRM FAILED TOREPORT APPROXIMATELY 55,000 LONG SHORT POSITIONS TO THE LOPR.THE FIRM FAILED TO REPORT AT LEAST 31 FOREIGN AFFILIATE ACCOUNTSAS ACTING IN CONCERT. THE FINDINGS ALSO STATED THAT THE FIRMFAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM THAT WASREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THEAPPLICABLE SECURITIES LAWS AND REGULATIONS, AND BOX RULES,CONCERNING THE REPORTING OF POSITIONS TO THE LOPR. IN ADDITION,THE FIRM'S WSPS WERE INADEQUATE BECAUSE THEY FAILED TOINCLUDE A DESCRIPTION OF THE REVIEWS THE FIRM CONDUCTED TOENSURE THE OVERALL ACCURACY OF ITS LOPR SUBMISSIONS, AND ANADEQUATE DESCRIPTION OF THE STEPS TAKEN BY THE FIRM TO REVIEWAND DETERMINE IF ACCOUNTS WERE ACTING IN-CONCERT.










Resolution:


Sanction Details: THE FIRM WAS CENSURED, FINED THE AMOUNT OF $200,000, OF WHICH$125,000 IS PAYABLE TO BOX, AND REQUIRED TO ADDRESS ITS LARGEOPTIONS POSITION REPORTING (LOPR) DEFICIENCIES AND DEFICIENTSUPERVISORY SYSTEM AND WSPS DESCRIBED IN THE LOC, AND TOENSURE THAT IT HAS IMPLEMENTED CONTROLS AND PROCEDURES THATARE REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THEAPPLICABLE BOX RULES AND REGULATIONS. THE FIRM WILL PAY THEBALANCE OF THE FINE TO FINRA IN A RELATED MATTER.


Consent


i


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT ITIMPROPERLY RECLASSIFIED CERTAIN BREAKS RELATING TO FOREIGNEXCHANGE TRANSACTIONS IN ITS BANK ACCOUNTS HELD AT EXTERNALBANKS THAT REMAINED UNRESOLVED AT MONTH-END AS FOREIGNEXCHANGE FAILS PAYABLE/RECEIVABLE FOR CERTAIN OF THOSE BANKACCOUNTS, CAUSING THE FIRM'S BOOKS AND RECORDS INCLUDING ITSGENERAL LEDGER TO BE INACCURATE IN VIOLATION OF SECTION 17(A) OFTHE SECURITIES EXCHANGE ACT OF 1934 AND RULE 17A-3 THEREUNDER.THE FINDINGS STATED THAT THE FIRM RECONCILED ON A DAILY BASISTHE ACTIVITY IN ITS BANK ACCOUNTS HELD AT EXTERNAL BANKS ANDTHE CORRESPONDING ENTRIES IN ITS GENERAL LEDGER. THE FIRM USEDRECONCILIATION SOFTWARE TO PERFORM THE DAILY RECONCILIATIONOF THESE ACCOUNTS. THIS SOFTWARE COMPARED AND MATCHED THEACTIVITY REFLECTED IN THE ACCOUNTS TO ACTIVITY REFLECTED IN THEFIRM'S GENERAL LEDGER. ANY ACTIVITY THAT THE SOFTWARE DID NOTMATCH BECAME A RECONCILING ITEM OR "BREAK." THESERECLASSIFICATIONS INCORRECTLY REPRESENTED ON THE FIRM'SGENERAL LEDGER THAT EACH BREAK WAS THE RESULT OF FAILEDTRANSACTIONS WHEN IN FACT THE BREAKS HAD NOT YET BEENRESOLVED AND MANY REMAINED OUTSTANDING AND UNRESOLVED INTOTHE FOLLOWING MONTH AND BEYOND. CONSEQUENTLY, THE FIRM'SGENERAL LEDGER CONTAINED ENTRIES REFLECTING INACCURATEBREAKS IN AMOUNTS RANGING BETWEEN $20 MILLION AND $318 MILLION.THE FINDINGS ALSO STATED THAT THE FIRM FAILED TO HAVE ASUPERVISORY SYSTEM REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH APPLICABLE SECURITIES LAWS AND REGULATIONSAND THE APPLICABLE FINRA RULES REGARDING RECONCILIATION OF ITSBANK ACCOUNTS HELD AT EXTERNAL BANKS AND THE TREATMENT OFBREAKS ACROSS THE FIRM'S BOOKS AND RECORDS.







Initiated By: FINRA


Other


N/A





WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT ITIMPROPERLY RECLASSIFIED CERTAIN BREAKS RELATING TO FOREIGNEXCHANGE TRANSACTIONS IN ITS BANK ACCOUNTS HELD AT EXTERNALBANKS THAT REMAINED UNRESOLVED AT MONTH-END AS FOREIGNEXCHANGE FAILS PAYABLE/RECEIVABLE FOR CERTAIN OF THOSE BANKACCOUNTS, CAUSING THE FIRM'S BOOKS AND RECORDS INCLUDING ITSGENERAL LEDGER TO BE INACCURATE IN VIOLATION OF SECTION 17(A) OFTHE SECURITIES EXCHANGE ACT OF 1934 AND RULE 17A-3 THEREUNDER.THE FINDINGS STATED THAT THE FIRM RECONCILED ON A DAILY BASISTHE ACTIVITY IN ITS BANK ACCOUNTS HELD AT EXTERNAL BANKS ANDTHE CORRESPONDING ENTRIES IN ITS GENERAL LEDGER. THE FIRM USEDRECONCILIATION SOFTWARE TO PERFORM THE DAILY RECONCILIATIONOF THESE ACCOUNTS. THIS SOFTWARE COMPARED AND MATCHED THEACTIVITY REFLECTED IN THE ACCOUNTS TO ACTIVITY REFLECTED IN THEFIRM'S GENERAL LEDGER. ANY ACTIVITY THAT THE SOFTWARE DID NOTMATCH BECAME A RECONCILING ITEM OR "BREAK." THESERECLASSIFICATIONS INCORRECTLY REPRESENTED ON THE FIRM'SGENERAL LEDGER THAT EACH BREAK WAS THE RESULT OF FAILEDTRANSACTIONS WHEN IN FACT THE BREAKS HAD NOT YET BEENRESOLVED AND MANY REMAINED OUTSTANDING AND UNRESOLVED INTOTHE FOLLOWING MONTH AND BEYOND. CONSEQUENTLY, THE FIRM'SGENERAL LEDGER CONTAINED ENTRIES REFLECTING INACCURATEBREAKS IN AMOUNTS RANGING BETWEEN $20 MILLION AND $318 MILLION.THE FINDINGS ALSO STATED THAT THE FIRM FAILED TO HAVE ASUPERVISORY SYSTEM REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH APPLICABLE SECURITIES LAWS AND REGULATIONSAND THE APPLICABLE FINRA RULES REGARDING RECONCILIATION OF ITSBANK ACCOUNTS HELD AT EXTERNAL BANKS AND THE TREATMENT OFBREAKS ACROSS THE FIRM'S BOOKS AND RECORDS.


Resolution:


Sanction Details: THE FIRM WAS CENSURED AND FINED $250,000. FINES PAID IN FULL ONMARCH 26, 2018.


No












Initiated By: FINANCIAL INDUSTRY REGULATORY AUTHORITY


Other


N/A


















i


Initiated By: FINRA







Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT INAPPROXIMATELY 4,000 TO 5,000 INSTANCES, IT FAILED TO REPORT 148POSITIONS TO THE LARGE OPTIONS POSITION REPORTING (LOPR)SYSTEM. THE FINDINGS STATED THAT THE FIRM EFFECTED OPENINGTRANSACTIONS IN A SINGLE SECURITY FOR CUSTOMERS' ACCOUNTSACTING IN CONCERT THAT, IN AGGREGATE, EXCEEDED THE APPLICABLEPOSITION LIMIT ON BOTH SIDES OF THE MARKET FOR 107 CONSECUTIVEDAYS, RANGING FROM 103.88 PERCENT TO 112.62 PERCENT OF THE LIMIT.THE FIRM REPORTED POSITIONS TO THE LOPR WITH INACCURATE TAX IDOR TAX TYPE FIELDS IN MILLIONS OF INSTANCES. BECAUSE THE FIRMREPORTED ALL OF THESE POSITIONS TO THE LOPR AND THESEINACCURACIES DID NOT ALTER THE POSITION DATA, THE ACCOUNTSWERE ABLE TO BE IDENTIFIED FOR SURVEILLANCE PURPOSES. THEFINDINGS ALSO STATED THAT THE FIRM FAILED TO ESTABLISH, MAINTAIN,AND ENFORCE ADEQUATE SUPERVISORY PROCEDURES AND CONTROLS,INCLUDING WRITTEN SUPERVISION PROCEDURES (WSPS) AND A SYSTEMOF FOLLOW-UP AND REVIEW, REASONABLY DESIGNED TO ENSURECOMPLIANCE WITH POSITION LIMIT REQUIREMENTS AND THE PROPERREPORTING OF POSITIONS ON THE LOPR.










Resolution:


Sanction Details: THE FIRM WAS CENSURED, FINED THE AMOUNT OF $200,000, OF WHICH$75,000 IS PAYABLE TO FINRA, AND REQUIRED TO ADDRESS ITS LARGEOPTIONS POSITION REPORTING (LOPR) DEFICIENCIES AND DEFICIENTSUPERVISORY SYSTEM AND WSPS, AND TO ENSURE THAT IT HASIMPLEMENTED CONTROLS AND PROCEDURES THAT ARE REASONABLYDESIGNED TO ACHIEVE COMPLIANCE WITH THE APPLICABLE FINRA RULESAND REGULATIONS. THE FIRM WILL PAY THE BALANCE OF THE FINE TOTHE BOX OPTIONS EXCHANGE, LLC IN A RELATED MATTER. FINES PAID INFULL ON MARCH 26, 2018.


No




Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT INAPPROXIMATELY 4,000 TO 5,000 INSTANCES, IT FAILED TO REPORT 148POSITIONS TO THE LARGE OPTIONS POSITION REPORTING (LOPR)SYSTEM. THE FINDINGS STATED THAT THE FIRM EFFECTED OPENINGTRANSACTIONS IN A SINGLE SECURITY FOR 16 CUSTOMER ACCOUNTSACTING IN CONCERT THAT, IN AGGREGATE, EXCEEDED THE APPLICABLEPOSITION LIMIT ON BOTH SIDES OF THE MARKET FOR 107 CONSECUTIVEDAYS, RANGING FROM 103.88 PERCENT TO 112.62 PERCENT OF THE LIMIT.THE FIRM REPORTED POSITIONS TO THE LOPR WITH INACCURATE TAX IDOR TAX TYPE FIELDS IN MILLIONS OF INSTANCES. BECAUSE THE FIRMREPORTED ALL OF THESE POSITIONS TO THE LOPR AND THESEINACCURACIES DID NOT ALTER THE POSITION DATA, THE ACCOUNTSWERE ABLE TO BE IDENTIFIED FOR SURVEILLANCE PURPOSES. THEFINDINGS ALSO STATED THAT THE FIRM FAILED TO ESTABLISH ANDMAINTAIN A SUPERVISORY SYSTEM REASONABLY DESIGNED TO ENSURECOMPLIANCE WITH POSITION LIMIT REQUIREMENTS AND THE PROPERREPORTING OF POSITIONS ON THE LOPR, AND HAD INADEQUATEWRITTEN SUPERVISION PROCEDURES (WSPS).







Initiated By: FINRA







WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT INAPPROXIMATELY 4,000 TO 5,000 INSTANCES, IT FAILED TO REPORT 148POSITIONS TO THE LARGE OPTIONS POSITION REPORTING (LOPR)SYSTEM. THE FINDINGS STATED THAT THE FIRM EFFECTED OPENINGTRANSACTIONS IN A SINGLE SECURITY FOR 16 CUSTOMER ACCOUNTSACTING IN CONCERT THAT, IN AGGREGATE, EXCEEDED THE APPLICABLEPOSITION LIMIT ON BOTH SIDES OF THE MARKET FOR 107 CONSECUTIVEDAYS, RANGING FROM 103.88 PERCENT TO 112.62 PERCENT OF THE LIMIT.THE FIRM REPORTED POSITIONS TO THE LOPR WITH INACCURATE TAX IDOR TAX TYPE FIELDS IN MILLIONS OF INSTANCES. BECAUSE THE FIRMREPORTED ALL OF THESE POSITIONS TO THE LOPR AND THESEINACCURACIES DID NOT ALTER THE POSITION DATA, THE ACCOUNTSWERE ABLE TO BE IDENTIFIED FOR SURVEILLANCE PURPOSES. THEFINDINGS ALSO STATED THAT THE FIRM FAILED TO ESTABLISH ANDMAINTAIN A SUPERVISORY SYSTEM REASONABLY DESIGNED TO ENSURECOMPLIANCE WITH POSITION LIMIT REQUIREMENTS AND THE PROPERREPORTING OF POSITIONS ON THE LOPR, AND HAD INADEQUATEWRITTEN SUPERVISION PROCEDURES (WSPS).


Resolution:


Sanction Details: THE FIRM WAS CENSURED, FINED THE AMOUNT OF $200,000, OF WHICH$75,000 IS PAYABLE TO FINRA, AND REQUIRED TO ADDRESS ITS LARGEOPTIONS POSITION REPORTING (LOPR) DEFICIENCIES AND DEFICIENTSUPERVISORY SYSTEM AND WSPS DESCRIBED IN THE AWC, AND TOENSURE THAT IT HAS IMPLEMENTED CONTROLS AND PROCEDURES THATARE REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THEAPPLICABLE FINRA RULES AND REGULATIONS. THE FIRM WILL PAY THEBALANCE OF THE FINE TO THE BOX OPTIONS EXCHANGE, LLC IN ARELATED MATTER.




i


Initiated By: ICE CLEAR CREDIT LLC


Allegations: ICE CLEAR CREDIT LLC ALLEGED THAT CREDIT SUISSE SECURITIES (USA)LLC FAILED TO SUBMIT 11 INDEX END-OF-DAY PRICES IN ACCORDANCEWITH THE ICE CLEAR CREDIT RULES AND PROCEDURES.











Docket/Case Number: ICE CLEAR CREDIT MATTER NO. 2018-404B-003

Principal Product Type: Derivative(s)



Resolution:


Sanction Details: ON MARCH 1, 2018, ICE CLEAR CREDIT ASSESSED A $11,000 PENALTYAGAINST CSSU TO BE BILLED IN A MONTHLY CLEARING FEE INVOICE.


Decision


i


Allegations: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRM (CREDITSUISSE SECURITIES (USA), LLC OR FIRM) CONSENTED TO THESANCTIONS AND TO THE ENTRY OF FINDINGS THAT IN APPROXIMATELY240,000 INSTANCES CREDIT SUISSE FAILED TO ENTER AND MAINTAINCONTINUOUS, TWO-SIDED TRADING INTEREST AS REQUIRED BY THEAPPLICABLE RULE.

THE FINDINGS STATED THAT BECAUSE MARKET MAKERS RECEIVEBENEFITS FOR THEIR REGISTRATION IN PARTICULAR SYMBOLS, IT ISESSENTIAL THAT THEY UPHOLD THE QUOTING OBLIGATIONS ASSOCIATEDWITH THEIR REGISTERED SYMBOLS, AND PROVIDE MARKET LIQUIDITY INTHE FORM OF CONTINUOUS QUOTING. CREDIT SUISSE WAS AREGISTERED MARKET MAKER IN, ON AVERAGE, APPROXIMATELY 192SYMBOLS EACH QUARTER. THE VIOLATIVE INSTANCES WERE ALMOSTENTIRELY INTRADAY GAPS IN A SMALL NUMBER OF THOSE SYMBOLS INWHICH THE FIRM WAS REGISTERED-SPECIFICALLY, CERTAIN EXCHANGE-TRADED FUNDS ("ETF"). CREDIT SUISSE ATTRIBUTED THE MAJORITY OFTHE ETF QUOTING GAPS TO ITS CONFIGURATION OF THE QUOTINGAPPLICATION UTILIZED FOR THOSE INSTRUMENTS. ACCORDING TO THEFIRM, IT CONFIGURED ITS QUOTING APPLICATION TO CALCULATEQUOTATIONS BASED ON NET ASSET VALUE ("NAV") DATA FEEDS FOR THERELEVANT ETFS; LATENCY AND/OR DELAYS IN THE UPDATING OF THOSEDATA FEEDS RESULTED IN QUOTING GAPS THAT TYPICALLY LASTED AMATTER OF SECONDS. THE FIRM COULD HAVE CONFIGURED ITS ETFQUOTING APPLICATION TO PUBLISH RULE-COMPLIANT QUOTATIONSBASED ON OTHER AVAILABLE INFORMATION. CREDIT SUISSE ATTRIBUTEDOTHER QUOTING GAPS AT ISSUE TO, INTER ALIA, VARIOUSTECHNOLOGICAL GLITCHES, ONE-OFF EVENTS SUCH AS CERTAINTRADING CONTROLS INTERRUPTING QUOTING, AND FAILURES TO AFFIXTHE FIRM'S MARKET MAKER IDENTIFIER TO QUOTES SUBMITTED.

THE FINDINGS ALSO STATED THAT THE FIRM FAILED TO REASONABLYSUPERVISE THE ACTIVITIES OF ITS ASSOCIATED PERSONS AND THEOPERATION OF ITS BUSINESS BY ESTABLISHING AND MAINTAININGADEQUATE SUPERVISORY PROCEDURES, INCLUDING WRITTENPROCEDURES AND A REASONABLE SYSTEM OF FOLLOW-UP AND REVIEWTHAT WERE REASONABLY DESIGNED TO ENSURE COMPLIANCE WITHNYSE ARCA EQUITIES RULE 7.23. CREDIT SUISSE'S WRITTENSUPERVISORY PROCEDURES DESCRIBED PROTOCOLS FOR MONITORINGITS COMPLIANCE WITH NYSE ARCA EQUITIES RULE 7.23, INCLUDINGREFERENCES TO CERTAIN INTERNAL AND EXTERNAL REPORTSMAINTAINED AND REVIEWED BY VARIOUS TRADING DESKS RESPONSIBLEFOR THE FIRM'S MARKET-MAKING ACTIVITIES. HOWEVER, NONE OF THEINTERNAL SURVEILLANCES CREDIT SUISSE PROVIDED WERE DESIGNEDTO DETECT THE TYPE OF SHORT-DURATION INTRADAY GAPS THATCONSTITUTE THE MAJORITY OF THE VIOLATIVE INSTANCES AT ISSUE INTHE INSTANT MATTER. FURTHER, RELIANCE ON EXTERNAL REPORTSSUCH AS THOSE PROVIDED BY NYSE ARCA, INC., WAS NOT AN ADEQUATESUBSTITUTE FOR THE FIRM'S OWN SUPERVISORY PROCEDURES. ASNYSE ARCA, INC. EXPLICITLY STATED, THOSE REPORTS WEREINFORMATIONAL ONLY, AND PRODUCED WITHOUT WARRANTY OFCOMPLETENESS. AS A RESULT, CREDIT SUISSE FAILED TO DETECT,IDENTIFY, AND REMEDY PERSISTENT SHORT-DURATION QUOTING GAPS.














WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRM (CREDITSUISSE SECURITIES (USA), LLC OR FIRM) CONSENTED TO THESANCTIONS AND TO THE ENTRY OF FINDINGS THAT IN APPROXIMATELY240,000 INSTANCES CREDIT SUISSE FAILED TO ENTER AND MAINTAINCONTINUOUS, TWO-SIDED TRADING INTEREST AS REQUIRED BY THEAPPLICABLE RULE.

THE FINDINGS STATED THAT BECAUSE MARKET MAKERS RECEIVEBENEFITS FOR THEIR REGISTRATION IN PARTICULAR SYMBOLS, IT ISESSENTIAL THAT THEY UPHOLD THE QUOTING OBLIGATIONS ASSOCIATEDWITH THEIR REGISTERED SYMBOLS, AND PROVIDE MARKET LIQUIDITY INTHE FORM OF CONTINUOUS QUOTING. CREDIT SUISSE WAS AREGISTERED MARKET MAKER IN, ON AVERAGE, APPROXIMATELY 192SYMBOLS EACH QUARTER. THE VIOLATIVE INSTANCES WERE ALMOSTENTIRELY INTRADAY GAPS IN A SMALL NUMBER OF THOSE SYMBOLS INWHICH THE FIRM WAS REGISTERED-SPECIFICALLY, CERTAIN EXCHANGE-TRADED FUNDS ("ETF"). CREDIT SUISSE ATTRIBUTED THE MAJORITY OFTHE ETF QUOTING GAPS TO ITS CONFIGURATION OF THE QUOTINGAPPLICATION UTILIZED FOR THOSE INSTRUMENTS. ACCORDING TO THEFIRM, IT CONFIGURED ITS QUOTING APPLICATION TO CALCULATEQUOTATIONS BASED ON NET ASSET VALUE ("NAV") DATA FEEDS FOR THERELEVANT ETFS; LATENCY AND/OR DELAYS IN THE UPDATING OF THOSEDATA FEEDS RESULTED IN QUOTING GAPS THAT TYPICALLY LASTED AMATTER OF SECONDS. THE FIRM COULD HAVE CONFIGURED ITS ETFQUOTING APPLICATION TO PUBLISH RULE-COMPLIANT QUOTATIONSBASED ON OTHER AVAILABLE INFORMATION. CREDIT SUISSE ATTRIBUTEDOTHER QUOTING GAPS AT ISSUE TO, INTER ALIA, VARIOUSTECHNOLOGICAL GLITCHES, ONE-OFF EVENTS SUCH AS CERTAINTRADING CONTROLS INTERRUPTING QUOTING, AND FAILURES TO AFFIXTHE FIRM'S MARKET MAKER IDENTIFIER TO QUOTES SUBMITTED.

THE FINDINGS ALSO STATED THAT THE FIRM FAILED TO REASONABLYSUPERVISE THE ACTIVITIES OF ITS ASSOCIATED PERSONS AND THEOPERATION OF ITS BUSINESS BY ESTABLISHING AND MAINTAININGADEQUATE SUPERVISORY PROCEDURES, INCLUDING WRITTENPROCEDURES AND A REASONABLE SYSTEM OF FOLLOW-UP AND REVIEWTHAT WERE REASONABLY DESIGNED TO ENSURE COMPLIANCE WITHNYSE ARCA EQUITIES RULE 7.23. CREDIT SUISSE'S WRITTENSUPERVISORY PROCEDURES DESCRIBED PROTOCOLS FOR MONITORINGITS COMPLIANCE WITH NYSE ARCA EQUITIES RULE 7.23, INCLUDINGREFERENCES TO CERTAIN INTERNAL AND EXTERNAL REPORTSMAINTAINED AND REVIEWED BY VARIOUS TRADING DESKS RESPONSIBLEFOR THE FIRM'S MARKET-MAKING ACTIVITIES. HOWEVER, NONE OF THEINTERNAL SURVEILLANCES CREDIT SUISSE PROVIDED WERE DESIGNEDTO DETECT THE TYPE OF SHORT-DURATION INTRADAY GAPS THATCONSTITUTE THE MAJORITY OF THE VIOLATIVE INSTANCES AT ISSUE INTHE INSTANT MATTER. FURTHER, RELIANCE ON EXTERNAL REPORTSSUCH AS THOSE PROVIDED BY NYSE ARCA, INC., WAS NOT AN ADEQUATESUBSTITUTE FOR THE FIRM'S OWN SUPERVISORY PROCEDURES. ASNYSE ARCA, INC. EXPLICITLY STATED, THOSE REPORTS WEREINFORMATIONAL ONLY, AND PRODUCED WITHOUT WARRANTY OFCOMPLETENESS. AS A RESULT, CREDIT SUISSE FAILED TO DETECT,IDENTIFY, AND REMEDY PERSISTENT SHORT-DURATION QUOTING GAPS.








Resolution:


Sanction Details: THE FIRM IS CENSURED AND FINED $130,000. THE FIRM SHALLUNDERTAKE, WITHIN 45 DAYS OF THIS DECISION, TO ADDRESSDEFICIENCIES IN ITS WRITTEN SUPERVISORY PROCEDURES TO ENSURETHE FIRM HAS IMPLEMENTED PROCEDURES REASONABLY DESIGNED TOACHIEVE COMPLIANCE WITH THE RULES AND REGULATIONS CITED IN THEOFFER OF SETTLEMENT DECISION TO MARKET MAKER QUOTINGOBLIGATIONS.


No


Decision & Order of Offer of Settlement


Allegations: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRM (CREDITSUISSE SECURITIES (USA), LLC OR FIRM) CONSENTED TO THESANCTIONS AND TO THE ENTRY OF FINDINGS THAT IN APPROXIMATELY240,000 INSTANCES CREDIT SUISSE FAILED TO ENTER AND MAINTAINCONTINUOUS, TWO-SIDED TRADING INTEREST AS REQUIRED BY THEAPPLICABLE RULE. CREDIT SUISSE WAS A REGISTERED MARKET MAKERIN, ON AVERAGE, APPROXIMATELY 192 SYMBOLS EACH QUARTER. THEVIOLATIVE INSTANCES WERE ALMOST ENTIRELY INTRADAY GAPS IN ASMALL NUMBER OF THOSE SYMBOLS IN WHICH THE FIRM WASREGISTERED -SPECIFICALLY, CERTAIN EXCHANGE-TRADED FUNDS ("ETF").THE MAJORITY OF THE ETF QUOTING GAPS LASTED A MATTER OFSECONDS. OTHER QUOTING GAPS AT ISSUE RELATED TO VARIOUSTECHNOLOGICAL GLITCHES, ONE-OFF EVENTS SUCH AS CERTAINTRADING CONTROLS INTERRUPTING QUOTING, AND FAILURES TO AFFIXTHE FIRM'S MARKET MAKER IDENTIFIER TO QUOTES SUBMITTED. THEFINDINGS ALSO STATED THAT THE FIRM FAILED TO REASONABLYSUPERVISE THE ACTIVITIES OF ITS ASSOCIATED PERSONS AND THEOPERATION OF ITS BUSINESS BY ESTABLISHING AND MAINTAININGADEQUATE SUPERVISORY PROCEDURES, INCLUDING WRITTENPROCEDURES AND A REASONABLE SYSTEM OF FOLLOW-UP AND REVIEWTHAT WERE REASONABLY DESIGNED TO ENSURE COMPLIANCE WITHNYSE ARCA EQUITIES RULE 7.23. CREDIT SUISSE'S WRITTENSUPERVISORY PROCEDURES DESCRIBED PROTOCOLS FOR MONITORINGITS COMPLIANCE WITH NYSE ARCA EQUITIES RULE 7.23, INCLUDINGREFERENCES TO CERTAIN INTERNAL AND EXTERNAL REPORTSMAINTAINED AND REVIEWED BY VARIOUS TRADING DESKS RESPONSIBLEFOR THE FIRM'S MARKET-MAKING ACTIVITIES. HOWEVER, NONE OF THEINTERNAL SURVEILLANCES CREDIT SUISSE PROVIDED WERE DESIGNEDTO DETECT THE TYPE OF SHORT-DURATION INTRADAY GAPS THATCONSTITUTE THE MAJORITY OF THE VIOLATIVE INSTANCES AT ISSUE INTHE INSTANT MATTER.














WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRM (CREDITSUISSE SECURITIES (USA), LLC OR FIRM) CONSENTED TO THESANCTIONS AND TO THE ENTRY OF FINDINGS THAT IN APPROXIMATELY240,000 INSTANCES CREDIT SUISSE FAILED TO ENTER AND MAINTAINCONTINUOUS, TWO-SIDED TRADING INTEREST AS REQUIRED BY THEAPPLICABLE RULE. CREDIT SUISSE WAS A REGISTERED MARKET MAKERIN, ON AVERAGE, APPROXIMATELY 192 SYMBOLS EACH QUARTER. THEVIOLATIVE INSTANCES WERE ALMOST ENTIRELY INTRADAY GAPS IN ASMALL NUMBER OF THOSE SYMBOLS IN WHICH THE FIRM WASREGISTERED -SPECIFICALLY, CERTAIN EXCHANGE-TRADED FUNDS ("ETF").THE MAJORITY OF THE ETF QUOTING GAPS LASTED A MATTER OFSECONDS. OTHER QUOTING GAPS AT ISSUE RELATED TO VARIOUSTECHNOLOGICAL GLITCHES, ONE-OFF EVENTS SUCH AS CERTAINTRADING CONTROLS INTERRUPTING QUOTING, AND FAILURES TO AFFIXTHE FIRM'S MARKET MAKER IDENTIFIER TO QUOTES SUBMITTED. THEFINDINGS ALSO STATED THAT THE FIRM FAILED TO REASONABLYSUPERVISE THE ACTIVITIES OF ITS ASSOCIATED PERSONS AND THEOPERATION OF ITS BUSINESS BY ESTABLISHING AND MAINTAININGADEQUATE SUPERVISORY PROCEDURES, INCLUDING WRITTENPROCEDURES AND A REASONABLE SYSTEM OF FOLLOW-UP AND REVIEWTHAT WERE REASONABLY DESIGNED TO ENSURE COMPLIANCE WITHNYSE ARCA EQUITIES RULE 7.23. CREDIT SUISSE'S WRITTENSUPERVISORY PROCEDURES DESCRIBED PROTOCOLS FOR MONITORINGITS COMPLIANCE WITH NYSE ARCA EQUITIES RULE 7.23, INCLUDINGREFERENCES TO CERTAIN INTERNAL AND EXTERNAL REPORTSMAINTAINED AND REVIEWED BY VARIOUS TRADING DESKS RESPONSIBLEFOR THE FIRM'S MARKET-MAKING ACTIVITIES. HOWEVER, NONE OF THEINTERNAL SURVEILLANCES CREDIT SUISSE PROVIDED WERE DESIGNEDTO DETECT THE TYPE OF SHORT-DURATION INTRADAY GAPS THATCONSTITUTE THE MAJORITY OF THE VIOLATIVE INSTANCES AT ISSUE INTHE INSTANT MATTER.


Resolution:


Sanction Details: THE FIRM SHALL UNDERTAKE, WITHIN 45 DAYS OF THIS DECISION, TOADDRESS DEFICIENCIES IN ITS WRITTEN SUPERVISORY PROCEDURES TOENSURE THE FIRM HAS IMPLEMENTED PROCEDURES REASONABLYDESIGNED TO ACHIEVE COMPLIANCE WITH THE RULES ANDREGULATIONS CITED IN THE OFFER OF SETTLEMENT DECISION TOMARKET MAKER QUOTING OBLIGATIONS.

Firm Statement THE FIRM IS CENSURED AND FINED $130,000.




i














Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT ON SIX TRADEDATES, IT IMPROPERLY CANCELLED AND/OR MODIFIED A TOTAL OF 5,724MARKET-ON-CLOSE ("MOC") AND LIMIT-ON-CLOSE ("LOC") ORDERS AFTERTHE PRESCRIBED CUT-OFF TIME OF 3:45 P.M., WHEN CANCELLATIONS AREONLY PERMITTED TO CORRECT LEGITIMATE ERRORS.THE FINDINGS STATED THAT THE FIRM FAILED TO IMPLEMENT ADEQUATEWRITTEN PROCEDURES AND SUPERVISORY SYSTEMS AND CONTROLSREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH NYSE RULE123C. SPECIFICALLY, THE FIRM FAILED TO DEMONSTRATE ITS POST-TRADE SURVEILLANCES WERE ADEQUATELY CONFIGURED TO DETECTPOTENTIAL VIOLATIONS OF NYSE RULE 123C. AS A RESULT, THE FIRMFAILED TO DETECT THE VAST MAJORITY OF THE VIOLATIONS, WHICHWERE RELATED TO THE CLOCK SYNCHRONIZATION AND LATENCY-RELATED ISSUES. THE FIRM'S POST-TRADE SURVEILLANCE DID DETECTTHE ISOLATED USER AND SYSTEM-RELATED ISSUES. MOREOVER,CERTAIN CONTROLS DESCRIBED IN THE FIRM'S WRITTEN SUPERVISORYPROCEDURES (WSPS) INTENDED TO PREVENT IMPROPERCANCELLATIONS AND/OR MODIFICATIONS OF CLOSING ORDERS DID NOTFUNCTION IN CERTAIN INSTANCES. AS A RESULT, CANCELLATIONS AND/ORMODIFICATIONS THAT SHOULD HAVE BEEN PREVENTED BEFORE BEINGENTERED ON THE EXCHANGE WERE NOT.



Resolution:


No








Sanction Details: THE FIRM WAS CENSURED AND FINED $90,000. THE FIRM REQUIRED TOPROVIDE A CERTIFICATION THAT THE FIRM HAS REVISED ITSSUPERVISORY SYSTEM TO ADDRESS THE DEFICIENCIES DESCRIBED INTHE AWC, AND THE DATE THE SUPERVISORY SYSTEM AND PROCEDURESWERE REVISED.PURSUANT TO NYSE RULE 9310(A)(1)(B), THIS AWC BECAME FINAL ONFEBRUARY 23, 2018, SINCE NO REVIEW WAS REQUESTED BY THE NYSEEXCHANGE BOARD OF DIRECTORS.


No



Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT ON SIX TRADEDATES, IT IMPROPERLY CANCELLED AND/OR MODIFIED A TOTAL OF 5,724MARKET-ON-CLOSE ("MOC") AND LIMIT-ON-CLOSE ("LOC") ORDERS AFTERTHE PRESCRIBED CUT-OFF TIME OF 3:45 P.M., WHEN CANCELLATIONS AREONLY PERMITTED TO CORRECT LEGITIMATE ERRORS. THE FINDINGSSTATED THAT THE FIRM FAILED TO IMPLEMENT ADEQUATE WRITTENPROCEDURES AND SUPERVISORY SYSTEMS AND CONTROLSREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH NYSE RULE123C. SPECIFICALLY, THE FIRM FAILED TO DEMONSTRATE ITS POST-TRADE SURVEILLANCES WERE ADEQUATELY CONFIGURED TO DETECTPOTENTIAL VIOLATIONS OF NYSE RULE 123C. AS A RESULT, THE FIRMFAILED TO DETECT THE VAST MAJORITY OF THE VIOLATIONS, WHICHWERE RELATED TO THE CLOCK SYNCHRONIZATION AND LATENCY-RELATED ISSUES. THE FIRM'S POST-TRADE SURVEILLANCE DID DETECTTHE ISOLATED USER AND SYSTEM-RELATED ISSUES. MOREOVER,CERTAIN CONTROLS DESCRIBED IN THE FIRM'S WRITTEN SUPERVISORYPROCEDURES (WSPS) INTENDED TO PREVENT IMPROPERCANCELLATIONS AND/OR MODIFICATIONS OF CLOSING ORDERS DID NOTFUNCTION IN CERTAIN INSTANCES. AS A RESULT, CANCELLATIONS AND/ORMODIFICATIONS THAT SHOULD HAVE BEEN PREVENTED BEFORE BEINGENTERED ON THE EXCHANGE WERE NOT.














WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT ON SIX TRADEDATES, IT IMPROPERLY CANCELLED AND/OR MODIFIED A TOTAL OF 5,724MARKET-ON-CLOSE ("MOC") AND LIMIT-ON-CLOSE ("LOC") ORDERS AFTERTHE PRESCRIBED CUT-OFF TIME OF 3:45 P.M., WHEN CANCELLATIONS AREONLY PERMITTED TO CORRECT LEGITIMATE ERRORS. THE FINDINGSSTATED THAT THE FIRM FAILED TO IMPLEMENT ADEQUATE WRITTENPROCEDURES AND SUPERVISORY SYSTEMS AND CONTROLSREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH NYSE RULE123C. SPECIFICALLY, THE FIRM FAILED TO DEMONSTRATE ITS POST-TRADE SURVEILLANCES WERE ADEQUATELY CONFIGURED TO DETECTPOTENTIAL VIOLATIONS OF NYSE RULE 123C. AS A RESULT, THE FIRMFAILED TO DETECT THE VAST MAJORITY OF THE VIOLATIONS, WHICHWERE RELATED TO THE CLOCK SYNCHRONIZATION AND LATENCY-RELATED ISSUES. THE FIRM'S POST-TRADE SURVEILLANCE DID DETECTTHE ISOLATED USER AND SYSTEM-RELATED ISSUES. MOREOVER,CERTAIN CONTROLS DESCRIBED IN THE FIRM'S WRITTEN SUPERVISORYPROCEDURES (WSPS) INTENDED TO PREVENT IMPROPERCANCELLATIONS AND/OR MODIFICATIONS OF CLOSING ORDERS DID NOTFUNCTION IN CERTAIN INSTANCES. AS A RESULT, CANCELLATIONS AND/ORMODIFICATIONS THAT SHOULD HAVE BEEN PREVENTED BEFORE BEINGENTERED ON THE EXCHANGE WERE NOT.


Resolution:


Sanction Details: HE FIRM REQUIRED TO PROVIDE A CERTIFICATION THAT THE FIRM HASREVISED ITS SUPERVISORY SYSTEM TO ADDRESS THE DEFICIENCIESDESCRIBED IN THE AWC, AND THE DATE THE SUPERVISORY SYSTEM ANDPROCEDURES WERE REVISED. PURSUANT TO NYSE RULE 9310(A)(1)(B),THIS AWC BECAME FINAL ON FEBRUARY 23, 2018, SINCE NO REVIEW WASREQUESTED BY THE NYSE EXCHANGE BOARD OF DIRECTORS.

Firm Statement THE FIRM WAS CENSURED AND FINED $90,000.




i


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT FROM JULY 1,2012 THROUGH APRIL 26, 2013 (THE REVIEW PERIOD), A FIRM CUSTOMERWAS BOTH A FIRM CUSTOMER AND A FUND MANAGER FOR THE FIRM.ORDERS ENTERED IN ITS ROLE AS A CUSTOMER WERE REQUIRED TO BEMARKED AS "AGENCY" AND ORDERS ENTERED IN ITS ROLE AS FUNDMANAGER WERE REQUIRED TO BE ENTERED AS "PRINCIPAL." DURING THEREVIEW PERIOD, AS A RESULT OF A CODING ERROR IN A PROGRAMMINGUPGRADE, THE FIRM SUBMITTED INACCURATE INFORMATION TO CBOEBZX EXCHANGE, INC. (BZX), BY ENTERING CUSTOMER ORDERS ONBEHALF OF THE FIRM CUSTOMER AS 'PRINCIPAL" ORDERS, WHEN THEORDERS SHOULD HAVE BEEN DESIGNATED AS "AGENCY" ORDERS, IN ATOTAL OF APPROXIMATELY 3.9 MILLION INSTANCES. AS A RESULT, THEFIRM VIOLATED BZX RULE 11.21. DURING THE REVIEW PERIOD, THE FIRMFAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM THAT WASREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH CERTAINAPPLICABLE SECURITIES LAWS AND REGULATIONS, SPECIFICALLY WITHRESPECT TO BZX RULES, REGARDING THE SUBMISSION OF ACCURATECAPACITY CODES ON ORDERS SUBMITTED TO BZX. ALTHOUGH THEFIRM'S SURVEILLANCES DID DETECT THAT THE ORDERS IN QUESTIONTHAT WERE MARKED IN A PRINCIPAL ORDER CAPACITY RATHER THAN ANAGENCY CAPACITY, DUE TO THE CUSTOMER'S DUAL ROLE AS ACUSTOMER AND A FUND MANAGER, THE FIRM DID NOT IDENTIFY THATTHE CUSTOMER'S ORDERS WERE INACCURATELY DESIGNATED DURINGTHE REVIEW PERIOD. AS A RESULT, THE FIRM VIOLATED BZX RULES 3.1AND 5.1.







Initiated By: BATS BZX EXCHANGE, INC.







WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT FROM JULY 1,2012 THROUGH APRIL 26, 2013 (THE REVIEW PERIOD), A FIRM CUSTOMERWAS BOTH A FIRM CUSTOMER AND A FUND MANAGER FOR THE FIRM.ORDERS ENTERED IN ITS ROLE AS A CUSTOMER WERE REQUIRED TO BEMARKED AS "AGENCY" AND ORDERS ENTERED IN ITS ROLE AS FUNDMANAGER WERE REQUIRED TO BE ENTERED AS "PRINCIPAL." DURING THEREVIEW PERIOD, AS A RESULT OF A CODING ERROR IN A PROGRAMMINGUPGRADE, THE FIRM SUBMITTED INACCURATE INFORMATION TO CBOEBZX EXCHANGE, INC. (BZX), BY ENTERING CUSTOMER ORDERS ONBEHALF OF THE FIRM CUSTOMER AS 'PRINCIPAL" ORDERS, WHEN THEORDERS SHOULD HAVE BEEN DESIGNATED AS "AGENCY" ORDERS, IN ATOTAL OF APPROXIMATELY 3.9 MILLION INSTANCES. AS A RESULT, THEFIRM VIOLATED BZX RULE 11.21. DURING THE REVIEW PERIOD, THE FIRMFAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM THAT WASREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH CERTAINAPPLICABLE SECURITIES LAWS AND REGULATIONS, SPECIFICALLY WITHRESPECT TO BZX RULES, REGARDING THE SUBMISSION OF ACCURATECAPACITY CODES ON ORDERS SUBMITTED TO BZX. ALTHOUGH THEFIRM'S SURVEILLANCES DID DETECT THAT THE ORDERS IN QUESTIONTHAT WERE MARKED IN A PRINCIPAL ORDER CAPACITY RATHER THAN ANAGENCY CAPACITY, DUE TO THE CUSTOMER'S DUAL ROLE AS ACUSTOMER AND A FUND MANAGER, THE FIRM DID NOT IDENTIFY THATTHE CUSTOMER'S ORDERS WERE INACCURATELY DESIGNATED DURINGTHE REVIEW PERIOD. AS A RESULT, THE FIRM VIOLATED BZX RULES 3.1AND 5.1.


Resolution:



IN DETERMINING TO RESOLVE THIS MATTER ON THE BASIS SET FORTHHEREIN, BZX TOOK INTO CONSIDERATION THE FOLLOWING: (I) THE FIRMPROVIDED SUBSTANTIAL ASSISTANCE TO FINRA, INCLUDING PROVIDINGTHE STAFF WITH DATA QUANTIFYING THE NUMBER OF VIOLATIONS ANDTHEIR DURATION; AND (II) THE SUBSEQUENT REMEDIAL MEASURESIMPLEMENTED BY THE FIRM.


No








THE FIRM WAS CENSURED AND FINED $15,000.

IN DETERMINING TO RESOLVE THIS MATTER ON THE BASIS SET FORTHHEREIN, BZX TOOK INTO CONSIDERATION THE FOLLOWING: (I) THE FIRMPROVIDED SUBSTANTIAL ASSISTANCE TO FINRA, INCLUDING PROVIDINGTHE STAFF WITH DATA QUANTIFYING THE NUMBER OF VIOLATIONS ANDTHEIR DURATION; AND (II) THE SUBSEQUENT REMEDIAL MEASURESIMPLEMENTED BY THE FIRM.


Initiated By: CBOE BZX EXCHANGE, INC.







Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT FROM JULY 1,2012 THROUGH APRIL 26, 2013 (THE REVIEW PERIOD), A FIRM CUSTOMERWAS BOTH A FIRM CUSTOMER AND A FUND MANAGER FOR THE FIRM.ORDERS ENTERED IN ITS ROLE AS A CUSTOMER WERE REQUIRED TO BEMARKED AS "AGENCY" AND ORDERS ENTERED IN ITS ROLE AS FUNDMANAGER WERE REQUIRED TO BE ENTERED AS "PRINCIPAL." DURING THEREVIEW PERIOD, AS A RESULT OF A CODING ERROR IN A PROGRAMMINGUPGRADE, THE FIRM SUBMITTED INACCURATE INFORMATION TO CBOEBZX EXCHANGE, INC. (BZX), BY ENTERING CUSTOMER ORDERS ONBEHALF OF THE FIRM CUSTOMER AS 'PRINCIPAL" ORDERS, WHEN THEORDERS SHOULD HAVE BEEN DESIGNATED AS "AGENCY" ORDERS, IN ATOTAL OF APPROXIMATELY 3.9 MILLION INSTANCES. AS A RESULT, THEFIRM VIOLATED BZX RULE 11.21. DURING THE REVIEW PERIOD, THE FIRMFAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM THAT WASREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH CERTAINAPPLICABLE SECURITIES LAWS AND REGULATIONS, SPECIFICALLY WITHRESPECT TO BZX RULES, REGARDING THE SUBMISSION OF ACCURATECAPACITY CODES ON ORDERS SUBMITTED TO BZX. ALTHOUGH THEFIRM'S SURVEILLANCES DID DETECT THAT THE ORDERS IN QUESTIONTHAT WERE MARKED IN A PRINCIPAL ORDER CAPACITY RATHER THAN ANAGENCY CAPACITY, DUE TO THE CUSTOMER'S DUAL ROLE AS ACUSTOMER AND A FUND MANAGER, THE FIRM DID NOT IDENTIFY THATTHE CUSTOMER'S ORDERS WERE INACCURATELY DESIGNATED DURINGTHE REVIEW PERIOD. AS A RESULT, THE FIRM VIOLATED BZX RULES 3.1AND 5.1.











Resolution:


Sanction Details: THE FIRM WAS FINED $15,000.




i







Docket/Case Number: ICE CLEAR CREDIT MATTER NO. 2017-404B-015

Principal Product Type: Derivative(s)


Allegations: ICE CLEAR CREDIT LLC ALLEGED THAT CSSU FAILED TO SUBMIT 63SINGLE NAME AND 2 INDEX END-OF-DAY PRICES IN ACCORDANCE WITHTHE ICE CLEAR CREDIT RULES AND PROCEDURES.



Resolution:


Sanction Details: THE FIRM WAS FINED.

Firm Statement ON JULY 27, 2017, ICE CLEAR CREDIT ASSESSED A $52,000 PENALTYAGAINST CSSU TO BE BILLED IN A MONTHLY CLEARING FEE INVOICE. THEINVOICE IS EXPECTED TO BE ISSUED ON SEPTEMBER 5, 2017 AND DUEFOR COLLECTION ON SEPTEMBER 21, 2017.


Decision






ON JULY 27, 2017, ICE CLEAR CREDIT ASSESSED A $52,000 PENALTYAGAINST CSSU TO BE BILLED IN A MONTHLY CLEARING FEE INVOICE. THEINVOICE IS EXPECTED TO BE ISSUED ON SEPTEMBER 5, 2017 AND DUEFOR COLLECTION ON SEPTEMBER 21, 2017.


i


Initiated By: CME GROUP





Docket/Case Number: CME GROUP MATTER NO. RSRH-17-4755

Principal Product Type: Futures - Commodity


Allegations: CME GROUP ALLEGED THAT CSSU UNDER-REPORTED LONG POSITIONSELIGIBLE FOR DELIVERY IN THE JULY 2017 CBT SOYBEAN FUTURESCONTRACT.



Resolution:


Sanction Details: THE FIRM WAS FINED $1500.00

Firm Statement ON JULY 26, 2017, CME GROUP ASSESSED CSSU A SUMMARY FINE OF$1,500 TO BE PAYABLE TO THE CME GROUP. THE ASSESSMENT WILL BEREPORTED BY THE CME GROUP TO THE NATIONAL FUTURESASSOCIATION AND THE COMMODITY FUTURES TRADING COMMISSION.


Decision


i


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT ITTRANSMITTED TO THE ORDER AUDIT TRAIL SYSTEM (OATS) NEW ORDERREPORTS THAT CONTAINED INACCURATE, INCOMPLETE OR IMPROPERLYFORMATTED DATA. THE FINDINGS STATED THAT SPECIFICALLY, NEWORDER REPORTS WERE INACCURATELY ENTERED INTO OATS AS LONGSALES BUT WERE TRADE REPORTED WITH A SHORT SALE MODIFIER. THEVIOLATIONS WERE DUE TO TWO SEPARATE SYSTEM ISSUES WHICH HAVEBEEN REMEDIATED. THE FINDINGS ALSO STATED THAT THE FIRMTRANSMITTED TO THE FINRA TRADE REPORTING FACILITY (FNTRF)TRANSACTIONS WITH AN INCORRECT SYMBOL INDICATING WHETHER THETRANSACTION WAS A BUY, SELL, OR SELL SHORT. SPECIFICALLY,TRANSACTIONS WERE REPORTED TO THE FNTRF WITHOUT THE SHORTSALE MODIFIER CODE. THE VIOLATIONS WERE DUE TO A SYSTEM ISSUEWHICH HAS BEEN REMEDIATED.







Initiated By: FINRA







WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT ITTRANSMITTED TO THE ORDER AUDIT TRAIL SYSTEM (OATS) NEW ORDERREPORTS THAT CONTAINED INACCURATE, INCOMPLETE OR IMPROPERLYFORMATTED DATA. THE FINDINGS STATED THAT SPECIFICALLY, NEWORDER REPORTS WERE INACCURATELY ENTERED INTO OATS AS LONGSALES BUT WERE TRADE REPORTED WITH A SHORT SALE MODIFIER. THEVIOLATIONS WERE DUE TO TWO SEPARATE SYSTEM ISSUES WHICH HAVEBEEN REMEDIATED. THE FINDINGS ALSO STATED THAT THE FIRMTRANSMITTED TO THE FINRA TRADE REPORTING FACILITY (FNTRF)TRANSACTIONS WITH AN INCORRECT SYMBOL INDICATING WHETHER THETRANSACTION WAS A BUY, SELL, OR SELL SHORT. SPECIFICALLY,TRANSACTIONS WERE REPORTED TO THE FNTRF WITHOUT THE SHORTSALE MODIFIER CODE. THE VIOLATIONS WERE DUE TO A SYSTEM ISSUEWHICH HAS BEEN REMEDIATED.


Resolution:


Sanction Details: THE FIRM WAS CENSURED AND FINED $50,000. FINES PAID IN FULL ONJULY 10, 2017.


No










Initiated By: FINRA








Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT ITTRANSMITTED TO THE ORDER AUDIT TRAIL SYSTEM (OATS) NEW ORDERREPORTS THAT CONTAINED INACCURATE, INCOMPLETE OR IMPROPERLYFORMATTED DATA. THE FINDINGS STATED THAT SPECIFICALLY, NEWORDER REPORTS WERE INACCURATELY ENTERED INTO OATS AS LONGSALES BUT WERE TRADE REPORTED WITH A SHORT SALE MODIFIER. THEVIOLATIONS WERE DUE TO TWO SEPARATE SYSTEM ISSUES WHICH HAVEBEEN REMEDIATED. THE FINDINGS ALSO STATED THAT THE FIRMTRANSMITTED TO THE FINRA TRADE REPORTING FACILITY (FNTRF)TRANSACTIONS WITH AN INCORRECT SYMBOL INDICATING WHETHER THETRANSACTION WAS A BUY, SELL, OR SELL SHORT. SPECIFICALLY,TRANSACTIONS WERE REPORTED TO THE FNTRF WITHOUT THE SHORTSALE MODIFIER CODE. THE VIOLATIONS WERE DUE TO A SYSTEM ISSUEWHICH HAS BEEN REMEDIATED.



Resolution:






i


Allegations: SEC ADMIN RELEASE 34-80373; IA RELEASE 40-4678, APRIL 4, 2017: THESEC DEEMS IT APPROPRIATE AND IN THE PUBLIC INTEREST THAT PUBLICADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BE, ANDHEREBY ARE, INSTITUTED PURSUANT TO SECTION 15(B) OF THESECURITIES EXCHANGE ACT OF 1934 AND SECTIONS 203(E) AND 203(K) OFTHE INVESTMENT ADVISERS ACT OF 1940 AGAINST CREDIT SUISSESECURITIES (USA) LLC. IN ANTICIPATION OF THE INSTITUTION OF THESEPROCEEDINGS, RESPONDENT HAS SUBMITTED AN OFFER OFSETTLEMENT WHICH THE COMMISSION HAS DETERMINED TO ACCEPT.SOLELY FOR THE PURPOSE OF THESE PROCEEDINGS AND ANY OTHERPROCEEDINGS BROUGHT BY OR ON BEHALF OF THE COMMISSION, OR TOWHICH THE COMMISSION IS A PARTY, AND WITHOUT ADMITTING ORDENYING THE FINDINGS HEREIN, EXCEPT AS TO THE COMMISSION'SJURISDICTION OVER IT AND THE SUBJECT MATTER OF THESEPROCEEDINGS, WHICH ARE ADMITTED, THE FIRM CONSENTS TO THEENTRY OF THIS ORDER INSTITUTING ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS, MAKING FINDINGS, AND IMPOSING REMEDIALSANCTIONS AND A CEASE-AND-DESIST ORDER. ON THE BASIS OF THISORDER AND RESPONDENT'S OFFER, THE COMMISSION FINDS THATTHESE PROCEEDINGS ARISE OUT OF BREACHES OF FIDUCIARY DUTY,INADEQUATE DISCLOSURES, AND DEFICIENCIES IN COMPLIANCEPOLICIES AND PROCEDURES BY THE FIRM. THE FIRM'S IAREPRESENTATIVES, ALSO REFERRED TO AS RELATIONSHIP MANAGERS("RMS"), PURCHASED OR HELD CLASS A MUTUAL FUND SHARES FORADVISORY CLIENTS WHO WERE ELIGIBLE TO PURCHASE OR HOLD LESSEXPENSIVE INSTITUTIONAL SHARE CLASSES ("ISCS") OF THE SAMEMUTUAL FUNDS. A SIGNIFICANT DIFFERENCE BETWEEN CLASS A SHARESAND ISCS IS THE EXISTENCE OF MARKETING AND DISTRIBUTION FEESIMPOSED ON CLASS A SHAREHOLDERS PURSUANT TO SECTION 12(B) OFTHE INVESTMENT COMPANY ACT AND RULE 12B-1 THEREUNDER ("12B-1FEES"). THE 12B-1 FEES ARE PAID OUT OF THE ASSETS OF THE FUND AS APORTION OF ITS EXPENSE RATIO. IN THIS CASE, THE 12B-1 FEES WEREPASSED THROUGH TO THE FIRM, WHICH IN TURN PAID A PORTION OFTHAT AMOUNT TO ITS RMS. THUS, 12B-1 FEES DECREASED THE VALUE OFADVISORY CLIENTS' INVESTMENTS IN MUTUAL FUNDS AND INCREASEDTHE COMPENSATION PAID TO THE FIRM AND ITS RMS. THE FIRM'SDISCLOSURES DID NOT ADEQUATELY INFORM ITS ADVISORY CLIENTS OFTHE CONFLICT OF INTEREST PRESENTED BY ITS RMS' SHARE CLASSSELECTION PRACTICES. THE FIRM DISCLOSED IN ITS FORMS ADV ANDCLIENT AGREEMENTS THAT IT "MAY" RECEIVE 12B-1 FEES AS THE RESULTOF INVESTMENTS IN CERTAIN MUTUAL FUNDS AND THAT SUCH FEESCREATED A CONFLICT OF INTEREST DUE TO A FINANCIAL INCENTIVE FORRMS TO SELECT OR RECOMMEND INVESTMENTS THAT MAXIMIZED THISCOMPENSATION. THE FIRM DID NOT DISCLOSE, HOWEVER, THAT MANYMUTUAL FUNDS OFFERED A VARIETY OF SHARE CLASSES, INCLUDINGSOME THAT DID NOT PAY 12B-1 FEES AND WERE ACCORDINGLY LESSEXPENSIVE FOR ELIGIBLE INVESTORS. THUS, THE FIRM'S GENERALDISCLOSURES REGARDING ITS POTENTIAL RECEIPT OF 12B-1 FEES WEREINADEQUATE TO ADVISE ADVISORY CLIENTS THAT AN RM COULD SELECTOR RECOMMEND - AND IN MANY INSTANCES DID SELECT OR RECOMMEND- MUTUAL FUND INVESTMENTS IN SHARE CLASSES THAT PAID 12B-1 FEESTO THE FIRM WHEN THOSE CLIENTS WERE ELIGIBLE TO PURCHASESHARE CLASSES OF THE SAME MUTUAL FUNDS THAT DID NOT PAY SUCHFEES AND WERE LESS EXPENSIVE. IN ADDITION, THE FIRM DID NOTDISCLOSE THAT THOSE RMS RECEIVED 12B-1 FEES FROM THE SALE OFMUTUAL FUNDS, WHICH CREATED AN INCENTIVE FOR THOSE INDIVIDUALRMS TO RECOMMEND CLASS A SHARES. OVER TIME, AS ISCS BECAMEMORE AVAILABLE TO NON-INSTITUTIONAL PURCHASERS, THE FIRM DIDNOT UPDATE ITS POLICIES AND PROCEDURES TO REQUIRE PERSONNELSPECIFICALLY TO IDENTIFY OR EVALUATE AVAILABLE INSTITUTIONALSHARE CLASSES. MOREOVER, THE FIRM DID NOT UPDATE OR ENHANCEITS POLICIES OR PROCEDURES TO ADDRESS INSTANCES IN WHICH RMSWERE PURCHASING AND HOLDING CLASS A SHARES WHEN LESS COSTLYISCS WERE AVAILABLE. AS A RESULT OF THIS CONDUCT, THE FIRMWILLFULLY VIOLATED SECTION 206(2) OF THE ADVISERS ACT, SECTION 207OF THE ADVISERS ACT, AND SECTION 206(4) OF THE ADVISERS ACT ANDRULE 206(4)-7 THEREUNDER.








Allegations: SEC ADMIN RELEASE 34-80373; IA RELEASE 40-4678, APRIL 4, 2017: THESEC DEEMS IT APPROPRIATE AND IN THE PUBLIC INTEREST THAT PUBLICADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BE, ANDHEREBY ARE, INSTITUTED PURSUANT TO SECTION 15(B) OF THESECURITIES EXCHANGE ACT OF 1934 AND SECTIONS 203(E) AND 203(K) OFTHE INVESTMENT ADVISERS ACT OF 1940 AGAINST CREDIT SUISSESECURITIES (USA) LLC. IN ANTICIPATION OF THE INSTITUTION OF THESEPROCEEDINGS, RESPONDENT HAS SUBMITTED AN OFFER OFSETTLEMENT WHICH THE COMMISSION HAS DETERMINED TO ACCEPT.SOLELY FOR THE PURPOSE OF THESE PROCEEDINGS AND ANY OTHERPROCEEDINGS BROUGHT BY OR ON BEHALF OF THE COMMISSION, OR TOWHICH THE COMMISSION IS A PARTY, AND WITHOUT ADMITTING ORDENYING THE FINDINGS HEREIN, EXCEPT AS TO THE COMMISSION'SJURISDICTION OVER IT AND THE SUBJECT MATTER OF THESEPROCEEDINGS, WHICH ARE ADMITTED, THE FIRM CONSENTS TO THEENTRY OF THIS ORDER INSTITUTING ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS, MAKING FINDINGS, AND IMPOSING REMEDIALSANCTIONS AND A CEASE-AND-DESIST ORDER. ON THE BASIS OF THISORDER AND RESPONDENT'S OFFER, THE COMMISSION FINDS THATTHESE PROCEEDINGS ARISE OUT OF BREACHES OF FIDUCIARY DUTY,INADEQUATE DISCLOSURES, AND DEFICIENCIES IN COMPLIANCEPOLICIES AND PROCEDURES BY THE FIRM. THE FIRM'S IAREPRESENTATIVES, ALSO REFERRED TO AS RELATIONSHIP MANAGERS("RMS"), PURCHASED OR HELD CLASS A MUTUAL FUND SHARES FORADVISORY CLIENTS WHO WERE ELIGIBLE TO PURCHASE OR HOLD LESSEXPENSIVE INSTITUTIONAL SHARE CLASSES ("ISCS") OF THE SAMEMUTUAL FUNDS. A SIGNIFICANT DIFFERENCE BETWEEN CLASS A SHARESAND ISCS IS THE EXISTENCE OF MARKETING AND DISTRIBUTION FEESIMPOSED ON CLASS A SHAREHOLDERS PURSUANT TO SECTION 12(B) OFTHE INVESTMENT COMPANY ACT AND RULE 12B-1 THEREUNDER ("12B-1FEES"). THE 12B-1 FEES ARE PAID OUT OF THE ASSETS OF THE FUND AS APORTION OF ITS EXPENSE RATIO. IN THIS CASE, THE 12B-1 FEES WEREPASSED THROUGH TO THE FIRM, WHICH IN TURN PAID A PORTION OFTHAT AMOUNT TO ITS RMS. THUS, 12B-1 FEES DECREASED THE VALUE OFADVISORY CLIENTS' INVESTMENTS IN MUTUAL FUNDS AND INCREASEDTHE COMPENSATION PAID TO THE FIRM AND ITS RMS. THE FIRM'SDISCLOSURES DID NOT ADEQUATELY INFORM ITS ADVISORY CLIENTS OFTHE CONFLICT OF INTEREST PRESENTED BY ITS RMS' SHARE CLASSSELECTION PRACTICES. THE FIRM DISCLOSED IN ITS FORMS ADV ANDCLIENT AGREEMENTS THAT IT "MAY" RECEIVE 12B-1 FEES AS THE RESULTOF INVESTMENTS IN CERTAIN MUTUAL FUNDS AND THAT SUCH FEESCREATED A CONFLICT OF INTEREST DUE TO A FINANCIAL INCENTIVE FORRMS TO SELECT OR RECOMMEND INVESTMENTS THAT MAXIMIZED THISCOMPENSATION. THE FIRM DID NOT DISCLOSE, HOWEVER, THAT MANYMUTUAL FUNDS OFFERED A VARIETY OF SHARE CLASSES, INCLUDINGSOME THAT DID NOT PAY 12B-1 FEES AND WERE ACCORDINGLY LESSEXPENSIVE FOR ELIGIBLE INVESTORS. THUS, THE FIRM'S GENERALDISCLOSURES REGARDING ITS POTENTIAL RECEIPT OF 12B-1 FEES WEREINADEQUATE TO ADVISE ADVISORY CLIENTS THAT AN RM COULD SELECTOR RECOMMEND - AND IN MANY INSTANCES DID SELECT OR RECOMMEND- MUTUAL FUND INVESTMENTS IN SHARE CLASSES THAT PAID 12B-1 FEESTO THE FIRM WHEN THOSE CLIENTS WERE ELIGIBLE TO PURCHASESHARE CLASSES OF THE SAME MUTUAL FUNDS THAT DID NOT PAY SUCHFEES AND WERE LESS EXPENSIVE. IN ADDITION, THE FIRM DID NOTDISCLOSE THAT THOSE RMS RECEIVED 12B-1 FEES FROM THE SALE OFMUTUAL FUNDS, WHICH CREATED AN INCENTIVE FOR THOSE INDIVIDUALRMS TO RECOMMEND CLASS A SHARES. OVER TIME, AS ISCS BECAMEMORE AVAILABLE TO NON-INSTITUTIONAL PURCHASERS, THE FIRM DIDNOT UPDATE ITS POLICIES AND PROCEDURES TO REQUIRE PERSONNELSPECIFICALLY TO IDENTIFY OR EVALUATE AVAILABLE INSTITUTIONALSHARE CLASSES. MOREOVER, THE FIRM DID NOT UPDATE OR ENHANCEITS POLICIES OR PROCEDURES TO ADDRESS INSTANCES IN WHICH RMSWERE PURCHASING AND HOLDING CLASS A SHARES WHEN LESS COSTLYISCS WERE AVAILABLE. AS A RESULT OF THIS CONDUCT, THE FIRMWILLFULLY VIOLATED SECTION 206(2) OF THE ADVISERS ACT, SECTION 207OF THE ADVISERS ACT, AND SECTION 206(4) OF THE ADVISERS ACT ANDRULE 206(4)-7 THEREUNDER.








Cease and Desist




Principal Product Type: Mutual Fund(s)


SEC ADMIN RELEASE 34-80373; IA RELEASE 40-4678, APRIL 4, 2017: THESEC DEEMS IT APPROPRIATE AND IN THE PUBLIC INTEREST THAT PUBLICADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BE, ANDHEREBY ARE, INSTITUTED PURSUANT TO SECTION 15(B) OF THESECURITIES EXCHANGE ACT OF 1934 AND SECTIONS 203(E) AND 203(K) OFTHE INVESTMENT ADVISERS ACT OF 1940 AGAINST CREDIT SUISSESECURITIES (USA) LLC. IN ANTICIPATION OF THE INSTITUTION OF THESEPROCEEDINGS, RESPONDENT HAS SUBMITTED AN OFFER OFSETTLEMENT WHICH THE COMMISSION HAS DETERMINED TO ACCEPT.SOLELY FOR THE PURPOSE OF THESE PROCEEDINGS AND ANY OTHERPROCEEDINGS BROUGHT BY OR ON BEHALF OF THE COMMISSION, OR TOWHICH THE COMMISSION IS A PARTY, AND WITHOUT ADMITTING ORDENYING THE FINDINGS HEREIN, EXCEPT AS TO THE COMMISSION'SJURISDICTION OVER IT AND THE SUBJECT MATTER OF THESEPROCEEDINGS, WHICH ARE ADMITTED, THE FIRM CONSENTS TO THEENTRY OF THIS ORDER INSTITUTING ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS, MAKING FINDINGS, AND IMPOSING REMEDIALSANCTIONS AND A CEASE-AND-DESIST ORDER. ON THE BASIS OF THISORDER AND RESPONDENT'S OFFER, THE COMMISSION FINDS THATTHESE PROCEEDINGS ARISE OUT OF BREACHES OF FIDUCIARY DUTY,INADEQUATE DISCLOSURES, AND DEFICIENCIES IN COMPLIANCEPOLICIES AND PROCEDURES BY THE FIRM. THE FIRM'S IAREPRESENTATIVES, ALSO REFERRED TO AS RELATIONSHIP MANAGERS("RMS"), PURCHASED OR HELD CLASS A MUTUAL FUND SHARES FORADVISORY CLIENTS WHO WERE ELIGIBLE TO PURCHASE OR HOLD LESSEXPENSIVE INSTITUTIONAL SHARE CLASSES ("ISCS") OF THE SAMEMUTUAL FUNDS. A SIGNIFICANT DIFFERENCE BETWEEN CLASS A SHARESAND ISCS IS THE EXISTENCE OF MARKETING AND DISTRIBUTION FEESIMPOSED ON CLASS A SHAREHOLDERS PURSUANT TO SECTION 12(B) OFTHE INVESTMENT COMPANY ACT AND RULE 12B-1 THEREUNDER ("12B-1FEES"). THE 12B-1 FEES ARE PAID OUT OF THE ASSETS OF THE FUND AS APORTION OF ITS EXPENSE RATIO. IN THIS CASE, THE 12B-1 FEES WEREPASSED THROUGH TO THE FIRM, WHICH IN TURN PAID A PORTION OFTHAT AMOUNT TO ITS RMS. THUS, 12B-1 FEES DECREASED THE VALUE OFADVISORY CLIENTS' INVESTMENTS IN MUTUAL FUNDS AND INCREASEDTHE COMPENSATION PAID TO THE FIRM AND ITS RMS. THE FIRM'SDISCLOSURES DID NOT ADEQUATELY INFORM ITS ADVISORY CLIENTS OFTHE CONFLICT OF INTEREST PRESENTED BY ITS RMS' SHARE CLASSSELECTION PRACTICES. THE FIRM DISCLOSED IN ITS FORMS ADV ANDCLIENT AGREEMENTS THAT IT "MAY" RECEIVE 12B-1 FEES AS THE RESULTOF INVESTMENTS IN CERTAIN MUTUAL FUNDS AND THAT SUCH FEESCREATED A CONFLICT OF INTEREST DUE TO A FINANCIAL INCENTIVE FORRMS TO SELECT OR RECOMMEND INVESTMENTS THAT MAXIMIZED THISCOMPENSATION. THE FIRM DID NOT DISCLOSE, HOWEVER, THAT MANYMUTUAL FUNDS OFFERED A VARIETY OF SHARE CLASSES, INCLUDINGSOME THAT DID NOT PAY 12B-1 FEES AND WERE ACCORDINGLY LESSEXPENSIVE FOR ELIGIBLE INVESTORS. THUS, THE FIRM'S GENERALDISCLOSURES REGARDING ITS POTENTIAL RECEIPT OF 12B-1 FEES WEREINADEQUATE TO ADVISE ADVISORY CLIENTS THAT AN RM COULD SELECTOR RECOMMEND - AND IN MANY INSTANCES DID SELECT OR RECOMMEND- MUTUAL FUND INVESTMENTS IN SHARE CLASSES THAT PAID 12B-1 FEESTO THE FIRM WHEN THOSE CLIENTS WERE ELIGIBLE TO PURCHASESHARE CLASSES OF THE SAME MUTUAL FUNDS THAT DID NOT PAY SUCHFEES AND WERE LESS EXPENSIVE. IN ADDITION, THE FIRM DID NOTDISCLOSE THAT THOSE RMS RECEIVED 12B-1 FEES FROM THE SALE OFMUTUAL FUNDS, WHICH CREATED AN INCENTIVE FOR THOSE INDIVIDUALRMS TO RECOMMEND CLASS A SHARES. OVER TIME, AS ISCS BECAMEMORE AVAILABLE TO NON-INSTITUTIONAL PURCHASERS, THE FIRM DIDNOT UPDATE ITS POLICIES AND PROCEDURES TO REQUIRE PERSONNELSPECIFICALLY TO IDENTIFY OR EVALUATE AVAILABLE INSTITUTIONALSHARE CLASSES. MOREOVER, THE FIRM DID NOT UPDATE OR ENHANCEITS POLICIES OR PROCEDURES TO ADDRESS INSTANCES IN WHICH RMSWERE PURCHASING AND HOLDING CLASS A SHARES WHEN LESS COSTLYISCS WERE AVAILABLE. AS A RESULT OF THIS CONDUCT, THE FIRMWILLFULLY VIOLATED SECTION 206(2) OF THE ADVISERS ACT, SECTION 207OF THE ADVISERS ACT, AND SECTION 206(4) OF THE ADVISERS ACT ANDRULE 206(4)-7 THEREUNDER.


Resolution:


No

Sanctions Ordered: CensureMonetary/Fine $3,275,000.00Disgorgement/RestitutionCease and Desist/Injunction

Order






Other Sanctions Ordered: PREJUDGMENT INTEREST

Sanction Details: THE FIRM SHALL CEASE AND DESIST; IS CENSURED; AND SHALL PAYDISGORGEMENT OF $2,099,624.12, PREJUDGMENT INTEREST OF$380,090.37, AND A CIVIL MONEY PENALTY OF $3,275,000.

Regulator Statement IN VIEW OF THE FOREGOING, THE COMMISSION DEEMS IT APPROPRIATEAND IN THE PUBLIC INTEREST TO IMPOSE THE SANCTIONS AGREED TO INRESPONDENT'S OFFER. ACCORDINGLY, PURSUANT TO SECTION 15(B) OFTHE EXCHANGE ACT AND SECTIONS 203(E) AND 203(K) OF THE ADVISERSACT, IT IS HEREBY ORDERED THAT RESPONDENT CEASE AND DESISTFROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTUREVIOLATIONS OF SECTIONS 206(2), 206(4), AND 207 OF THE ADVISERS ACTAND RULE 206(4)-7 PROMULGATED THEREUNDER; IS CENSURED; ANDSHALL, WITHIN 10 DAYS OF THE ENTRY OF THIS ORDER, PAYDISGORGEMENT OF $2,099,624.12, PREJUDGMENT INTEREST OF$380,090.37, AND A CIVIL MONEY PENALTY IN THE AMOUNT OF $3,275,000TO THE SEC.




Allegations: CREDIT SUISSE SECURITIES (USA) LLC ("CSSU") CONSENTED, WITHOUTADMITTING OR DENYING THE FINDINGS (EXCEPT AS TO JURISDICTION),TO THE ISSUANCE OF A SECURITIES AND EXCHANGE COMMISSION ("SEC")ORDER FINDING THAT CSSU WILLFULLY VIOLATED SECTIONS 206(2),206(4), AND 207 OF THE INVESTMENT ADVISERS ACT OF 1940 AND RULE206(4)-7. THE SEC'S FINDINGS INCLUDED, AMONG OTHER THINGS, THATTHERE WERE BREACHES OF FIDUCIARY DUTY, INADEQUATEDISCLOSURES, AND DEFICIENCIES IN COMPLIANCE POLICIES ANDPROCEDURES BY CSSU RELATED TO THE PURCHASE OR HOLDING,BETWEEN JANUARY 1, 2009 AND JANUARY 21, 2014, OF CLASS A MUTUALFUND SHARES (WHICH INCURRED EXPENSES FOR RULE 12B-1 FEES) FORADVISORY CLIENTS WHO WERE ELIGIBLE TO PURCHASE OR HOLD LESSEXPENSIVE SHARE CLASSES OF THE SAME MUTUAL FUNDS. AS PART OFTHE SETTLEMENT, THE SEC CENSURED CSSU, ISSUED A CEASE-AND-DESIST ORDER, AND DIRECTED CSSU TO PAY TO THE SEC $2,099,624.12 INDISGORGEMENT, $380,090.37 IN PREJUDGMENT INTEREST, AND $3,275,000AS A CIVIL PENALTY.








Cease and Desist




Principal Product Type: Mutual Fund(s)



Resolution:


Sanction Details: THE FIRM SHALL CEASE AND DESIST; IS CENSURED; AND SHALL PAYDISGORGEMENT OF $2,099,624.12, PREJUDGMENT INTEREST OF$380,090.37, AND A CIVIL MONEY PENALTY OF $3,275,000.


Order


i


Initiated By: FINRA


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT ITTRANSMITTED REPORTS TO THE ORDER AUDIT TRAIL SYSTEM (OATS)THAT CONTAINED INACCURATE, INCOMPLETE OR IMPROPERLYFORMATTED DATA. THE FINDINGS STATED THAT THE FIRM FAILED TOREPORT THE CORRECT SYMBOL INDICATING WHETHER THETRANSACTION WAS A BUY, SELL, OR SELL SHORT, FOR 5,632TRANSACTIONS TO THE FINRA/NASDAQ TRADE REPORTING FACILITY. THEFINDINGS ALSO INCLUDED THAT THE FIRM'S SUPERVISORY SYSTEM DIDNOT PROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH RESPECT TO CERTAIN APPLICABLE SECURITIES LAWSAND REGULATIONS, AND FINRA RULES, CONCERNING OATS REPORTING.













Resolution:

Other Sanctions Ordered: UNDERTAKING: REVISE THE FIRM'S SUPERVISORY SYSTEM, INCLUDING,BUT NOT LIMITED TO, ITS WRITTEN SUPERVISORY PROCEDURES

Sanction Details: THE FIRM WAS CENSURED, FINED $487,500, AND UNDERTAKES TO REVISETHE FIRM'S SUPERVISORY SYSTEM, INCLUDING, BUT NOT LIMITED TO, ITSWRITTEN SUPERVISORY PROCEDURES. FINES PAID IN FULL ON JANUARY27, 2017.


No




Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT ITTRANSMITTED REPORTS TO THE ORDER AUDIT TRAIL SYSTEM (OATS)THAT CONTAINED INACCURATE, INCOMPLETE OR IMPROPERLYFORMATTED DATA. THE FINDINGS STATED THAT THE FIRM FAILED TOREPORT THE CORRECT SYMBOL INDICATING WHETHER THETRANSACTION WAS A BUY, SELL, OR SELL SHORT, FOR TRANSACTIONSREPORTED TO THE FINRA/NASDAQ TRADE REPORTING FACILITY. THEFINDINGS ALSO INCLUDED THAT THE FIRM'S SUPERVISORY SYSTEM DIDNOT PROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH RESPECT TO CERTAIN APPLICABLE SECURITIES LAWSAND REGULATIONS, AND FINRA RULES, CONCERNING OATS REPORTING.








Initiated By: FINRA







WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT ITTRANSMITTED REPORTS TO THE ORDER AUDIT TRAIL SYSTEM (OATS)THAT CONTAINED INACCURATE, INCOMPLETE OR IMPROPERLYFORMATTED DATA. THE FINDINGS STATED THAT THE FIRM FAILED TOREPORT THE CORRECT SYMBOL INDICATING WHETHER THETRANSACTION WAS A BUY, SELL, OR SELL SHORT, FOR TRANSACTIONSREPORTED TO THE FINRA/NASDAQ TRADE REPORTING FACILITY. THEFINDINGS ALSO INCLUDED THAT THE FIRM'S SUPERVISORY SYSTEM DIDNOT PROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH RESPECT TO CERTAIN APPLICABLE SECURITIES LAWSAND REGULATIONS, AND FINRA RULES, CONCERNING OATS REPORTING.


Resolution:

Other Sanctions Ordered: UNDERTAKING: REVISE THE FIRM'S SUPERVISORY SYSTEM, INCLUDING,BUT NOT LIMITED TO, ITS WRITTEN SUPERVISORYPROCEDURES

Sanction Details: THE FIRM WAS CENSURED, FINED $487,500, AND UNDERTAKES TO REVISETHE FIRM'S SUPERVISORY SYSTEM, INCLUDING, BUT NOT LIMITED TO, ITSWRITTEN SUPERVISORY PROCEDURES.




i


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM("RESPONDENT OR CSSU") CONSENTED TO THE SANCTIONS AND TO THEENTRY OF FINDINGS THAT FOR ALMOST FIVE YEARS, IT HAD SIGNIFICANTDEFICIENCIES IN ITS ANTI-MONEY LAUNDERING (AML) PROGRAM,PRINCIPALLY RELATED TO ITS ABILITY TO ADEQUATELY SURVEILPOTENTIALLY SUSPICIOUS TRADING AND MONEY MOVEMENTS.THE FINDINGS STATED THAT CSSU FAILED TO ESTABLISH AND IMPLEMENTAML POLICIES AND PROCEDURES THAT WERE REASONABLY DESIGNEDTO DETECT AND CAUSE THE REPORTING/FILING OF SUSPICIOUS ACTIVITYREPORTS (SARS). THE FIRM DID NOT HAVE AN EFFECTIVE SYSTEM INPLACE TO REVIEW TRADING FOR SUSPICIOUS ACTIVITY. THE SYSTEMSAND PROCEDURES USED BY THE FIRM TO MONITOR TRADING FOR OTHERPURPOSES WERE NOT DESIGNED TO DETECT POTENTIALLY SUSPICIOUSACTIVITY FROM AN AML PERSPECTIVE. AS IT RELATES TO THE FIRM'SPRIVATE BANKING BUSINESS (PB), THE TRADING ACTIVITY OF ACUSTOMER, A NEW YORK-BASED HEDGE FUND, ILLUSTRATES THEDEFICIENCIES IN THE FIRM'S SYSTEMS WHEN THAT CUSTOMER'STRADING FOLLOWED PATTERNS COMMONLY ASSOCIATED WITHMICROCAP FRAUD. HOWEVER, NO ONE AT CSSU REVIEWED ACTIVITY INTHE CUSTOMER'S ACCOUNT FOR AML PURPOSES, AND CSSU DID NOTEMPLOY AN AUTOMATED SCENARIO DESIGNED TO DETECT THE TYPE OFPOTENTIALLY SUSPICIOUS ACTIVITY ENGAGED IN BY THE CUSTOMER. ASIT RELATES TO THE FIRM'S INVESTING BANKING BUSINESS (IB), THE FIRMFAILED TO CONDUCT AN ADEQUATE AML REVIEW OF SALES OF MICROCAPSECURITIES BY IB CUSTOMERS, PARTICULARLY MICROCAP SALES ONBEHALF OF CUSTOMERS OF A CSSU AFFILIATE LOCATED IN A BANKSECRECY JURISDICTION THAT MAINTAINED AN OMNIBUS ACCOUNT WITHTHE IB. THE TRADING AT ISSUE INCLUDED SUSPICIOUS MICROCAP STOCKTRANSACTIONS AND SALES OF UNREGISTERED SECURITIES. AFTERSEPTEMBER 30, 2013, CSSU IMPLEMENTED ADDITIONAL PROCEDURESAND CONTROLS LIMITING THE TRADING OF MICROCAP SECURITIES.THE FINDINGS ALSO STATED THAT CSSU RELIED ON AN AUTOMATEDSURVEILLANCE SYSTEM TO MONITOR CLIENT ACTIVITY FOR POTENTIALLYSUSPICIOUS MONEY AND SECURITIES TRANSFERS, USING "SCENARIOS"THAT THE FIRM CHOSE TO IMPLEMENT. BUT CSSU FAILED TOEFFECTIVELY IMPLEMENT THE SCENARIOS THAT IT CHOSE TO USE, AND ITFAILED TO IMPLEMENT OTHER AVAILABLE SCENARIOS DESIGNED TOIDENTIFY SEVERAL OTHER COMMON SUSPICIOUS PATTERNS ORACTIVITIES. FURTHER, WHEN ITS SCENARIOS TRIGGERED AN ALERT,CSSU DID NOT ALWAYS ADEQUATELY REVIEW AND INVESTIGATE THEACTIVITY. ALTHOUGH CSSU ENGAGED A CONSULTING FIRM IN 2012 TOEVALUATE ITS AUTOMATED SURVEILLANCE SYSTEM AND THENUNDERTOOK EFFORTS TO IMPLEMENT THE CONSULTING FIRM'SRECOMMENDATIONS, SOME OF THE INADEQUACIES IN CSSU'SIMPLEMENTATION OF THE AUTOMATED SURVEILLANCE SYSTEM REMAINOUTSTANDING.THE FINDINGS ALSO INCLUDED THAT THE FIRM FAILED TO ESTABLISH,MAINTAIN, AND ENFORCE AN ADEQUATE SUPERVISORY SYSTEM,INCLUDING WSPS, REASONABLY DESIGNED TO ENSURE COMPLIANCEWITH SECTION 5 OF THE SECURITIES ACT OF 1933 AND THE APPLICABLERULES AND REGULATIONS. AS A RESULT, CSSU PARTICIPATED IN CERTAININSTANCES IN THE DISTRIBUTION OF UNREGISTERED MICROCAPSECURITIES THROUGH BOTH ITS IB AND ITS PB.ALSO, CSSU FAILED TO CONDUCT ADEQUATE DUE DILIGENCE ONCORRESPONDENT ACCOUNTS OF CERTAIN FOREIGN FINANCIALINSTITUTIONS (FFIS) THAT WERE ITS AFFILIATES, AND IT FAILED TOCONDUCT ENHANCED DUE DILIGENCE OF CORRESPONDENT ACCOUNTSOF CERTAIN FOREIGN BANKS THAT WERE ALSO ITS AFFILIATES, ASREQUIRED BY THE BANK SECRECY ACT AND IMPLEMENTINGREGULATIONS. ALTHOUGH CSSU WAS AWARE OF THE NATURE OF ITSAFFILIATES' BUSINESS AND ACTIVITY, IT FAILED TO APPLY ITS DUEDILIGENCE PROGRAM TO THESE CORRESPONDENT ACCOUNTS, ASREQUIRED.








WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM("RESPONDENT OR CSSU") CONSENTED TO THE SANCTIONS AND TO THEENTRY OF FINDINGS THAT FOR ALMOST FIVE YEARS, IT HAD SIGNIFICANTDEFICIENCIES IN ITS ANTI-MONEY LAUNDERING (AML) PROGRAM,PRINCIPALLY RELATED TO ITS ABILITY TO ADEQUATELY SURVEILPOTENTIALLY SUSPICIOUS TRADING AND MONEY MOVEMENTS.THE FINDINGS STATED THAT CSSU FAILED TO ESTABLISH AND IMPLEMENTAML POLICIES AND PROCEDURES THAT WERE REASONABLY DESIGNEDTO DETECT AND CAUSE THE REPORTING/FILING OF SUSPICIOUS ACTIVITYREPORTS (SARS). THE FIRM DID NOT HAVE AN EFFECTIVE SYSTEM INPLACE TO REVIEW TRADING FOR SUSPICIOUS ACTIVITY. THE SYSTEMSAND PROCEDURES USED BY THE FIRM TO MONITOR TRADING FOR OTHERPURPOSES WERE NOT DESIGNED TO DETECT POTENTIALLY SUSPICIOUSACTIVITY FROM AN AML PERSPECTIVE. AS IT RELATES TO THE FIRM'SPRIVATE BANKING BUSINESS (PB), THE TRADING ACTIVITY OF ACUSTOMER, A NEW YORK-BASED HEDGE FUND, ILLUSTRATES THEDEFICIENCIES IN THE FIRM'S SYSTEMS WHEN THAT CUSTOMER'STRADING FOLLOWED PATTERNS COMMONLY ASSOCIATED WITHMICROCAP FRAUD. HOWEVER, NO ONE AT CSSU REVIEWED ACTIVITY INTHE CUSTOMER'S ACCOUNT FOR AML PURPOSES, AND CSSU DID NOTEMPLOY AN AUTOMATED SCENARIO DESIGNED TO DETECT THE TYPE OFPOTENTIALLY SUSPICIOUS ACTIVITY ENGAGED IN BY THE CUSTOMER. ASIT RELATES TO THE FIRM'S INVESTING BANKING BUSINESS (IB), THE FIRMFAILED TO CONDUCT AN ADEQUATE AML REVIEW OF SALES OF MICROCAPSECURITIES BY IB CUSTOMERS, PARTICULARLY MICROCAP SALES ONBEHALF OF CUSTOMERS OF A CSSU AFFILIATE LOCATED IN A BANKSECRECY JURISDICTION THAT MAINTAINED AN OMNIBUS ACCOUNT WITHTHE IB. THE TRADING AT ISSUE INCLUDED SUSPICIOUS MICROCAP STOCKTRANSACTIONS AND SALES OF UNREGISTERED SECURITIES. AFTERSEPTEMBER 30, 2013, CSSU IMPLEMENTED ADDITIONAL PROCEDURESAND CONTROLS LIMITING THE TRADING OF MICROCAP SECURITIES.THE FINDINGS ALSO STATED THAT CSSU RELIED ON AN AUTOMATEDSURVEILLANCE SYSTEM TO MONITOR CLIENT ACTIVITY FOR POTENTIALLYSUSPICIOUS MONEY AND SECURITIES TRANSFERS, USING "SCENARIOS"THAT THE FIRM CHOSE TO IMPLEMENT. BUT CSSU FAILED TOEFFECTIVELY IMPLEMENT THE SCENARIOS THAT IT CHOSE TO USE, AND ITFAILED TO IMPLEMENT OTHER AVAILABLE SCENARIOS DESIGNED TOIDENTIFY SEVERAL OTHER COMMON SUSPICIOUS PATTERNS ORACTIVITIES. FURTHER, WHEN ITS SCENARIOS TRIGGERED AN ALERT,CSSU DID NOT ALWAYS ADEQUATELY REVIEW AND INVESTIGATE THEACTIVITY. ALTHOUGH CSSU ENGAGED A CONSULTING FIRM IN 2012 TOEVALUATE ITS AUTOMATED SURVEILLANCE SYSTEM AND THENUNDERTOOK EFFORTS TO IMPLEMENT THE CONSULTING FIRM'SRECOMMENDATIONS, SOME OF THE INADEQUACIES IN CSSU'SIMPLEMENTATION OF THE AUTOMATED SURVEILLANCE SYSTEM REMAINOUTSTANDING.THE FINDINGS ALSO INCLUDED THAT THE FIRM FAILED TO ESTABLISH,MAINTAIN, AND ENFORCE AN ADEQUATE SUPERVISORY SYSTEM,INCLUDING WSPS, REASONABLY DESIGNED TO ENSURE COMPLIANCEWITH SECTION 5 OF THE SECURITIES ACT OF 1933 AND THE APPLICABLERULES AND REGULATIONS. AS A RESULT, CSSU PARTICIPATED IN CERTAININSTANCES IN THE DISTRIBUTION OF UNREGISTERED MICROCAPSECURITIES THROUGH BOTH ITS IB AND ITS PB.ALSO, CSSU FAILED TO CONDUCT ADEQUATE DUE DILIGENCE ONCORRESPONDENT ACCOUNTS OF CERTAIN FOREIGN FINANCIALINSTITUTIONS (FFIS) THAT WERE ITS AFFILIATES, AND IT FAILED TOCONDUCT ENHANCED DUE DILIGENCE OF CORRESPONDENT ACCOUNTSOF CERTAIN FOREIGN BANKS THAT WERE ALSO ITS AFFILIATES, ASREQUIRED BY THE BANK SECRECY ACT AND IMPLEMENTINGREGULATIONS. ALTHOUGH CSSU WAS AWARE OF THE NATURE OF ITSAFFILIATES' BUSINESS AND ACTIVITY, IT FAILED TO APPLY ITS DUEDILIGENCE PROGRAM TO THESE CORRESPONDENT ACCOUNTS, ASREQUIRED.






Initiated By: FINRA






Other Product Type(s): MICROCAP STOCK AND SALES OF UNREGISTERED SECURITIES

WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM("RESPONDENT OR CSSU") CONSENTED TO THE SANCTIONS AND TO THEENTRY OF FINDINGS THAT FOR ALMOST FIVE YEARS, IT HAD SIGNIFICANTDEFICIENCIES IN ITS ANTI-MONEY LAUNDERING (AML) PROGRAM,PRINCIPALLY RELATED TO ITS ABILITY TO ADEQUATELY SURVEILPOTENTIALLY SUSPICIOUS TRADING AND MONEY MOVEMENTS.THE FINDINGS STATED THAT CSSU FAILED TO ESTABLISH AND IMPLEMENTAML POLICIES AND PROCEDURES THAT WERE REASONABLY DESIGNEDTO DETECT AND CAUSE THE REPORTING/FILING OF SUSPICIOUS ACTIVITYREPORTS (SARS). THE FIRM DID NOT HAVE AN EFFECTIVE SYSTEM INPLACE TO REVIEW TRADING FOR SUSPICIOUS ACTIVITY. THE SYSTEMSAND PROCEDURES USED BY THE FIRM TO MONITOR TRADING FOR OTHERPURPOSES WERE NOT DESIGNED TO DETECT POTENTIALLY SUSPICIOUSACTIVITY FROM AN AML PERSPECTIVE. AS IT RELATES TO THE FIRM'SPRIVATE BANKING BUSINESS (PB), THE TRADING ACTIVITY OF ACUSTOMER, A NEW YORK-BASED HEDGE FUND, ILLUSTRATES THEDEFICIENCIES IN THE FIRM'S SYSTEMS WHEN THAT CUSTOMER'STRADING FOLLOWED PATTERNS COMMONLY ASSOCIATED WITHMICROCAP FRAUD. HOWEVER, NO ONE AT CSSU REVIEWED ACTIVITY INTHE CUSTOMER'S ACCOUNT FOR AML PURPOSES, AND CSSU DID NOTEMPLOY AN AUTOMATED SCENARIO DESIGNED TO DETECT THE TYPE OFPOTENTIALLY SUSPICIOUS ACTIVITY ENGAGED IN BY THE CUSTOMER. ASIT RELATES TO THE FIRM'S INVESTING BANKING BUSINESS (IB), THE FIRMFAILED TO CONDUCT AN ADEQUATE AML REVIEW OF SALES OF MICROCAPSECURITIES BY IB CUSTOMERS, PARTICULARLY MICROCAP SALES ONBEHALF OF CUSTOMERS OF A CSSU AFFILIATE LOCATED IN A BANKSECRECY JURISDICTION THAT MAINTAINED AN OMNIBUS ACCOUNT WITHTHE IB. THE TRADING AT ISSUE INCLUDED SUSPICIOUS MICROCAP STOCKTRANSACTIONS AND SALES OF UNREGISTERED SECURITIES. AFTERSEPTEMBER 30, 2013, CSSU IMPLEMENTED ADDITIONAL PROCEDURESAND CONTROLS LIMITING THE TRADING OF MICROCAP SECURITIES.THE FINDINGS ALSO STATED THAT CSSU RELIED ON AN AUTOMATEDSURVEILLANCE SYSTEM TO MONITOR CLIENT ACTIVITY FOR POTENTIALLYSUSPICIOUS MONEY AND SECURITIES TRANSFERS, USING "SCENARIOS"THAT THE FIRM CHOSE TO IMPLEMENT. BUT CSSU FAILED TOEFFECTIVELY IMPLEMENT THE SCENARIOS THAT IT CHOSE TO USE, AND ITFAILED TO IMPLEMENT OTHER AVAILABLE SCENARIOS DESIGNED TOIDENTIFY SEVERAL OTHER COMMON SUSPICIOUS PATTERNS ORACTIVITIES. FURTHER, WHEN ITS SCENARIOS TRIGGERED AN ALERT,CSSU DID NOT ALWAYS ADEQUATELY REVIEW AND INVESTIGATE THEACTIVITY. ALTHOUGH CSSU ENGAGED A CONSULTING FIRM IN 2012 TOEVALUATE ITS AUTOMATED SURVEILLANCE SYSTEM AND THENUNDERTOOK EFFORTS TO IMPLEMENT THE CONSULTING FIRM'SRECOMMENDATIONS, SOME OF THE INADEQUACIES IN CSSU'SIMPLEMENTATION OF THE AUTOMATED SURVEILLANCE SYSTEM REMAINOUTSTANDING.THE FINDINGS ALSO INCLUDED THAT THE FIRM FAILED TO ESTABLISH,MAINTAIN, AND ENFORCE AN ADEQUATE SUPERVISORY SYSTEM,INCLUDING WSPS, REASONABLY DESIGNED TO ENSURE COMPLIANCEWITH SECTION 5 OF THE SECURITIES ACT OF 1933 AND THE APPLICABLERULES AND REGULATIONS. AS A RESULT, CSSU PARTICIPATED IN CERTAININSTANCES IN THE DISTRIBUTION OF UNREGISTERED MICROCAPSECURITIES THROUGH BOTH ITS IB AND ITS PB.ALSO, CSSU FAILED TO CONDUCT ADEQUATE DUE DILIGENCE ONCORRESPONDENT ACCOUNTS OF CERTAIN FOREIGN FINANCIALINSTITUTIONS (FFIS) THAT WERE ITS AFFILIATES, AND IT FAILED TOCONDUCT ENHANCED DUE DILIGENCE OF CORRESPONDENT ACCOUNTSOF CERTAIN FOREIGN BANKS THAT WERE ALSO ITS AFFILIATES, ASREQUIRED BY THE BANK SECRECY ACT AND IMPLEMENTINGREGULATIONS. ALTHOUGH CSSU WAS AWARE OF THE NATURE OF ITSAFFILIATES' BUSINESS AND ACTIVITY, IT FAILED TO APPLY ITS DUEDILIGENCE PROGRAM TO THESE CORRESPONDENT ACCOUNTS, ASREQUIRED.


Resolution:


Sanction Details: THE FIRM WAS CENSURED, FINED $16,500,000, AND REQUIRED TOCERTIFY TO FINRA, WITHIN 90 DAYS OF THE ISSUANCE OF THE AWC, THAT:IT HAS ADOPTED AND IMPLEMENTED WRITTEN SUPERVISORY POLICIESAND PROCEDURES REASONABLY DESIGNED TO ADDRESS EACH OF THEISSUES IDENTIFIED IN THE AWC; IT HAS IMPLEMENTED A DETAILED PLANAND FULLY ALLOCATED FUNDING AND RESOURCES TO FULLY REMEDIATE,BY NO LATER THAN SEPTEMBER 1, 2017, EACH OF THE ISSUES IDENTIFIEDIN THE REPORT PREPARED BY THE CONSULTING FIRM; AND AFTER ALLREQUIRED ITEMS ARE REMEDIATED, AND BY NO LATER THAN DECEMBER31, 2017, IT WILL COMPLETE A RISK-BASED LOOK-BACK OF PAST MONEYAND SECURITIES MOVEMENTS REASONABLY DESIGNED TO DETECT ANDCAUSE THE REPORTING OF SUSPICIOUS TRANSACTIONS. FINES PAID INFULL ON 12/13/16.


No

Sanctions Ordered: CensureMonetary/Fine $16,500,000.00








THE FIRM WAS CENSURED, FINED $16,500,000, AND REQUIRED TOCERTIFY TO FINRA, WITHIN 90 DAYS OF THE ISSUANCE OF THE AWC, THAT:IT HAS ADOPTED AND IMPLEMENTED WRITTEN SUPERVISORY POLICIESAND PROCEDURES REASONABLY DESIGNED TO ADDRESS EACH OF THEISSUES IDENTIFIED IN THE AWC; IT HAS IMPLEMENTED A DETAILED PLANAND FULLY ALLOCATED FUNDING AND RESOURCES TO FULLY REMEDIATE,BY NO LATER THAN SEPTEMBER 1, 2017, EACH OF THE ISSUES IDENTIFIEDIN THE REPORT PREPARED BY THE CONSULTING FIRM; AND AFTER ALLREQUIRED ITEMS ARE REMEDIATED, AND BY NO LATER THAN DECEMBER31, 2017, IT WILL COMPLETE A RISK-BASED LOOK-BACK OF PAST MONEYAND SECURITIES MOVEMENTS REASONABLY DESIGNED TO DETECT ANDCAUSE THE REPORTING OF SUSPICIOUS TRANSACTIONS. FINES PAID INFULL ON 12/13/16.


Initiated By: FINRA





Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, CSSU (THE "FIRM")CONSENTED TO FINRA'S FINDINGS THAT IT FAILED TO ESTABLISH ANDIMPLEMENT AML POLICIES AND PROCEDURES REASONABLY DESIGNEDTO CAUSE THE REPORTING OF POTENTIALLY SUSPICIOUS CUSTOMERTRADING ACTIVITY. FINRA FOUND THAT THE SYSTEMS AND PROCEDURESUSED BY THE FIRM TO MONITOR CUSTOMER TRADING FOR OTHERPURPOSES DID NOT DETECT POTENTIALLY SUSPICIOUS TRADING FROMAN AML PERSPECTIVE. SPECIFICALLY, FINRA POINTED TO TRADING BYONE PARTICULAR PRIVATE BANKING ("PB") CUSTOMER FOLLOWINGPATTERNS COMMONLY ASSOCIATED WITH MICROCAP FRAUD AND FOUNDTHAT THE PB BUSINESS DID NOT REVIEW THE ACTIVITY, NOR DID AMLCOMPLIANCE EMPLOY AN AUTOMATED SCENARIO TO DETECT THIS TYPEOF SUSPICIOUS ACTIVITY. FINRA ALSO OBSERVED THAT THE FIRM FAILEDTO CONDUCT AN ADEQUATE AML REVIEW OF MICROCAP SALES ONBEHALF OF A FIRM AFFILIATE THAT MAINTAINED AN OMNIBUS ACCOUNTWITH THE FIRM'S INVESTMENT BANKING ("IB") BUSINESS. THE FINDINGSALSO STATE THAT THAT THE FIRM FAILED TO EFFECTIVELY IMPLEMENT ANAUTOMATED AML SURVEILLANCE SYSTEM TO MONITOR CLIENT ACTIVITY;FAILED TO IMPLEMENT CERTAIN AVAILABLE SCENARIOS FOR THE SYSTEMTO IDENTIFY COMMON SUSPICIOUS ACTIVITY; AND DID NOT ALWAYSADEQUATELY INVESTIGATE THE ACTIVITY IN THE ALERTS GENERATED BYTHE SYSTEM. FINRA ALSO FOUND THAT ALTHOUGH THE FIRM ENGAGED ACONSULTING FIRM TO REVIEW THIS SYSTEM IN 2012-2013, CERTAIN OFTHE CONSULTANT'S FINDINGS REMAIN OUTSTANDING. IN ADDITION,FINRA FOUND THAT THE FIRM FAILED TO MAINTAIN AN ADEQUATESUPERVISORY SYSTEM TO ENSURE COMPLIANCE WITH SECTION 5 OFTHE SECURITIES ACT OF 1933, RESULTING IN CSSU PARTICIPATING INCERTAIN CUSTOMERS' DISTRIBUTIONS OF UNREGISTERED MICROCAPSHARES IN THE PB AND THE IB. FINALLY, FINRA FOUND THAT THE FIRMFAILED TO CONDUCT ADEQUATE DUE DILIGENCE AND ENHANCED DUEDILIGENCE ON CERTAIN FOREIGN FINANCIAL INSTITUTIONS THAT WEREITS AFFILIATES.












Resolution:


Sanction Details: THE FIRM WAS CENSURED, FINED $16,500,000, AND REQUIRED TOCERTIFY TO FINRA, WITHIN 90 DAYS OF THE ISSUANCE OF THE AWC, THAT:IT HAS ADOPTED AND IMPLEMENTED WRITTEN SUPERVISORY POLICIESAND PROCEDURES REASONABLY DESIGNED TO ADDRESS EACH OF THEISSUES IDENTIFIED IN THE AWC; IT HAS IMPLEMENTED A DETAILED PLANAND FULLY ALLOCATED FUNDING AND RESOURCES TO FULLY REMEDIATE,BY NO LATER THAN SEPTEMBER 1, 2017, EACH OF THE ISSUES IDENTIFIEDIN THE REPORT PREPARED BY THE CONSULTING FIRM; AND AFTER ALLREQUIRED ITEMS ARE REMEDIATED, AND BY NO LATER THAN DECEMBER31, 2017, IT WILL COMPLETE A RISK-BASED LOOK-BACK OF PAST MONEYAND SECURITIES MOVEMENTS REASONABLY DESIGNED TO DETECT ANDCAUSE THE REPORTING OF SUSPICIOUS TRANSACTIONS.




i


Initiated By: FINRA

Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOREPORT TO THE FINRA/NASDAQ TRADE REPORTING FACILITY (FNTRF)THE CORRECT RELATED MARKET CENTER CODE FOR APPROXIMATELY11.5 MILLION TRANSACTIONS. THE FINDINGS STATED THAT THE FIRM'SSUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISIONREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THEAPPLICABLE SECURITIES LAWS AND REGULATIONS, AND THE RULES OFFINRA, CONCERNING THE TRADE REPORTING OF RELATED MARKETCENTER CODES. SPECIFICALLY, THE FIRM'S SUPERVISORY SYSTEM DIDNOT INCLUDE ADEQUATE WRITTEN SUPERVISORY PROCEDURESPROVIDING FOR: A STATEMENT OF THE SUPERVISORY STEP(S) TO BETAKEN BY THE IDENTIFIED PERSON(S).







Initiated By: FINRA








Resolution:


Sanction Details: THE FIRM WAS CENSURED AND FINED $37,500.00FINE PAID IN FULL ON OCTOBER 6, 2016.


No




Allegations: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRMCONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THATIT FAILED TO REPORT TO THE FINRA/NASDAQ TRADE REPORTINGFACILITY (FNTRF) THE CORRECT RELATED MARKET CENTER CODE FORAPPROXIMATELY 11.5 MILLION TRANSACTIONS. THE FINDINGS STATEDTHAT THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FORSUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHTHE APPLICABLE SECURITIES LAWS AND REGULATIONS, AND THE RULESOF FINRA, CONCERNING THE TRADE REPORTING OF RELATED MARKETCENTER CODES. SPECIFICALLY, THE FIRM'S SUPERVISORY SYSTEM DIDNOT INCLUDE ADEQUATE WRITTEN SUPERVISORY PROCEDURESPROVIDING FOR: A STATEMENT OF THE SUPERVISORY STEP(S) TO BETAKEN BY THE IDENTIFIED PERSON(S).








Initiated By: FINRA







WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRMCONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THATIT FAILED TO REPORT TO THE FINRA/NASDAQ TRADE REPORTINGFACILITY (FNTRF) THE CORRECT RELATED MARKET CENTER CODE FORAPPROXIMATELY 11.5 MILLION TRANSACTIONS. THE FINDINGS STATEDTHAT THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FORSUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHTHE APPLICABLE SECURITIES LAWS AND REGULATIONS, AND THE RULESOF FINRA, CONCERNING THE TRADE REPORTING OF RELATED MARKETCENTER CODES. SPECIFICALLY, THE FIRM'S SUPERVISORY SYSTEM DIDNOT INCLUDE ADEQUATE WRITTEN SUPERVISORY PROCEDURESPROVIDING FOR: A STATEMENT OF THE SUPERVISORY STEP(S) TO BETAKEN BY THE IDENTIFIED PERSON(S).


Resolution:


Sanction Details: THE FIRM WAS CENSURED AND FINED $37,500.00




i


Initiated By: FINRA


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT EFFECTEDTRANSACTIONS IN SECURITIES WHILE A TRADING HALT WAS IN EFFECTWITH RESPECT TO EACH OF THE SECURITIES. THE FINDINGS STATEDTHAT THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FORSUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHRESPECT TO THE APPLICABLE SECURITIES LAWS AND REGULATIONS ANDTHE RULES OF FINRA. SPECIFICALLY, THE FIRM'S SUPERVISORY SYSTEMDID NOT INCLUDE WRITTEN SUPERVISORY PROCEDURES PROVIDING FORADEQUATE SUPERVISORY STEPS TO BE TAKEN BY THE PERSON(S)RESPONSIBLE FOR SUPERVISION WITH RESPECT TO THE APPLICABLERULE.














Resolution:


Sanction Details: THE FIRM WAS CENSURED, FINED $42,500, AND UNDERTAKES TO REVISEITS WRITTEN SUPERVISORY PROCEDURES.FINE PAID IN FULL ON OCTOBER 6, 2016.


No




Initiated By: FINRA

Allegations: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRMCONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THATIT EFFECTED TRANSACTIONS IN SECURITIES WHILE A TRADING HALT WASIN EFFECT WITH RESPECT TO EACH OF THE SECURITIES. THE FINDINGSSTATED THAT THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FORSUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHRESPECT TO THE APPLICABLE SECURITIES LAWS AND REGULATIONS ANDTHE RULES OF FINRA. SPECIFICALLY, THE FIRM'S SUPERVISORY SYSTEMDID NOT INCLUDE WRITTEN SUPERVISORY PROCEDURES PROVIDING FORADEQUATE SUPERVISORY STEPS TO BE TAKEN BY THE PERSON(S)RESPONSIBLE FOR SUPERVISION WITH RESPECT TO THE APPLICABLERULE.















Resolution:


Sanction Details: THE FIRM WAS CENSURED, FINED $42,500, AND UNDERTAKES TO REVISEITS WRITTEN SUPERVISORY PROCEDURES.




i


Initiated By: FINRA







Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOREPORT TO THE FINRA/NASDAQ TRADE REPORTING FACILITY THECORRECT CAPACITY CODE OF THE CONTRA BROKER-DEALER FOR2,197,510 TRANSACTIONS.










Resolution:


Sanction Details: THE FIRM WAS CENSURED AND FINED $25,000.FINE PAID IN FULL ON OCTOBER 27, 2016.


No




Initiated By: FINRA







Allegations: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRMCONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THATIT FAILED TO REPORT TO THE FINRA/NASDAQ TRADE REPORTINGFACILITY THE CORRECT CAPACITY CODE OF THE CONTRA BROKER-DEALER FOR 2,197,510 TRANSACTIONS.



Resolution:













i










Allegations: CME GROUP MARKET REGULATION CONDUCTED A REVIEW CONCERNINGORDERS SUBMITTED UNDER GLOBEX OPERATOR ID ("TAG 50 ID") "SYSWARE" BY CREDIT SUISSE SECURITIES (USA) LLC ("CREDIT SUISSE")BETWEEN JANUARY 1 AND MARCH 31, 2016. DURING THE COURSE OF THEREVIEW, IT WAS DISCOVERED THAT TAG 50 ID "SYSWARE" WAS NON-UNIQUE AND USED BY MULTIPLE INDIVIDUALS, IN VIOLATION OF CMERULE 576.



Resolution:


Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC ("CSSU") CONSENTED, WITHOUTADMITTING OR DENYING THE FINDINGS, TO A SUMMARY FINE OF $2,000FOR A VIOLATION OF CME RULE 576. THIS AMOUNT WAS TIMELY PAID ONJUNE 28, 2016.


Decision


i







Initiated By: ICE FUTURES US








Allegations: CREDIT SUISSE SECURITIES (USA) LLC MAY HAVE VIOLATED ICE FUTURESUS RULE 6.10 BY FAILING TO ENSURE THAT THE PROPER CUSTOMERTYPE INDICATOR ("CTI") CODE WAS AFFIXED TO ORDERS BETWEENOCTOBER AND DECEMBER 2015.



Resolution:


Sanction Details: THE FIRM WAS FINED $1000.


Decision


i


Allegations: CFTC RELEASE: PR7345-16/MARCH 22, 2016: THE U.S. COMMODITYFUTURES TRADING COMMISSION (CFTC) ISSUED AN ORDER WHICHFOUND THAT CREDIT SUISSE SECURITIES (USA) LLC SUBMITTED TO THECFTC'S DIVISION OF ENFORCEMENT (ENFORCEMENT) IN ITSINVESTIGATION OF THIS MATTER MATERIALLY FALSE OR MISLEADINGINFORMATION REFLECTING CERTAIN INFLATED SWAP POSITIONS ANDTHUS INFLATED HEDGE EXEMPTIONS FOR CHICAGO BOARD OF TRADE(CBOT) WHEAT FUTURES CONTRACTS FOR THE FIRM AND OTHERAFFILIATES FOR SEVERAL DAYS IN APRIL AND JUNE 2009. THE ORDERFINDS THAT IN MARCH 2013, THE FIRM SUBMITTED TO ENFORCEMENT,THROUGH COUNSEL, DOCUMENTS PURPORTING TO REFLECT, AMONGOTHER INFORMATION, THE FIRM AND ITS AFFILIATE'S FUTURES POSITIONRELATED TO ITS CREDIT MIGRATORY EXEMPTION FOR THE RELEVANTDAYS IN APRIL AND JUNE 2009. WHILE THE MARCH 2013 SUBMISSIONPURPORTEDLY REFLECTED THAT THE FIRM AND ITS AFFILIATE'S HADLARGER CREDIT MIGRATORY SWAP POSITIONS AND THUS LARGERHEDGE EXEMPTIONS IN APRIL AND JUNE 2009 THAN HAD BEENPREVIOUSLY REPORTED TO THE CFTC, THE SUBMISSION IN FACTREFLECTED INFLATED CREDIT MIGRATORY SWAP POSITIONS AND THUSINFLATED HEDGE EXEMPTIONS, MAKING THEM MATERIALLY FALSE ORMISLEADING. THE ORDER FOUND THAT THE FIRM VIOLATED SECTION6(C)(2) OF THE COMMODITY EXCHANGE ACT.







Initiated By: COMMODITY FUTURES TRADING COMMISSION


Other


N/A




Other Product Type(s): WHEAT FUTURES

CFTC RELEASE: PR7345-16/MARCH 22, 2016: THE U.S. COMMODITYFUTURES TRADING COMMISSION (CFTC) ISSUED AN ORDER WHICHFOUND THAT CREDIT SUISSE SECURITIES (USA) LLC SUBMITTED TO THECFTC'S DIVISION OF ENFORCEMENT (ENFORCEMENT) IN ITSINVESTIGATION OF THIS MATTER MATERIALLY FALSE OR MISLEADINGINFORMATION REFLECTING CERTAIN INFLATED SWAP POSITIONS ANDTHUS INFLATED HEDGE EXEMPTIONS FOR CHICAGO BOARD OF TRADE(CBOT) WHEAT FUTURES CONTRACTS FOR THE FIRM AND OTHERAFFILIATES FOR SEVERAL DAYS IN APRIL AND JUNE 2009. THE ORDERFINDS THAT IN MARCH 2013, THE FIRM SUBMITTED TO ENFORCEMENT,THROUGH COUNSEL, DOCUMENTS PURPORTING TO REFLECT, AMONGOTHER INFORMATION, THE FIRM AND ITS AFFILIATE'S FUTURES POSITIONRELATED TO ITS CREDIT MIGRATORY EXEMPTION FOR THE RELEVANTDAYS IN APRIL AND JUNE 2009. WHILE THE MARCH 2013 SUBMISSIONPURPORTEDLY REFLECTED THAT THE FIRM AND ITS AFFILIATE'S HADLARGER CREDIT MIGRATORY SWAP POSITIONS AND THUS LARGERHEDGE EXEMPTIONS IN APRIL AND JUNE 2009 THAN HAD BEENPREVIOUSLY REPORTED TO THE CFTC, THE SUBMISSION IN FACTREFLECTED INFLATED CREDIT MIGRATORY SWAP POSITIONS AND THUSINFLATED HEDGE EXEMPTIONS, MAKING THEM MATERIALLY FALSE ORMISLEADING. THE ORDER FOUND THAT THE FIRM VIOLATED SECTION6(C)(2) OF THE COMMODITY EXCHANGE ACT.


Resolution:

Other Sanctions Ordered: POST-JUDGMENT INTEREST; UNDERTAKINGS

Sanction Details: IN ANTICIPATION OF THE INSTITUTION OF AN ADMINISTRATIVEPROCEEDING, THE FIRM HAS SUBMITTED AN OFFER OF SETTLEMENT,WHICH THE COMMISSION HAS DETERMINED TO ACCEPT. WITHOUTADMITTING OR DENYING ANY OF THE FINDINGS OR CONCLUSIONSHEREIN, THE FIRM CONSENTS TO THE ENTRY OF THIS ORDERINSTITUTING PROCEEDINGS PURSUANT TO SECTIONS 6(C) AND 6(D) (2012)OF THE ACT, MAKING FINDINGS AND IMPOSING REMEDIAL SANCTIONSAND ACKNOWLEDGE SERVICE OF THIS ORDER. ACCORDINGLY, IT ISHEREBY ORDERED THAT: THE FIRM, AND ITS SUCCESSORS AND ASSIGNS,SHALL CEASE AND DESIST FROM VIOLATING SECTION 6(C)(2) OF THE ACT;SHALL PAY A CIVIL MONETARY PENALTY IN THE AMOUNT OF $140,000 PLUSPOST-JUDGMENT INTEREST. IN ADDITION, THE FIRM, AND ITS SUCCESSAND ASSIGNS, SHALL COMPLY WITH THE CONDITIONS ANDUNDERTAKINGS SET FORTH IN THE OFFER.


Yes

Sanctions Ordered: Monetary/Fine $140,000.00Cease and Desist/Injunction

Order






IN ANTICIPATION OF THE INSTITUTION OF AN ADMINISTRATIVEPROCEEDING, THE FIRM HAS SUBMITTED AN OFFER OF SETTLEMENT,WHICH THE COMMISSION HAS DETERMINED TO ACCEPT. WITHOUTADMITTING OR DENYING ANY OF THE FINDINGS OR CONCLUSIONSHEREIN, THE FIRM CONSENTS TO THE ENTRY OF THIS ORDERINSTITUTING PROCEEDINGS PURSUANT TO SECTIONS 6(C) AND 6(D) (2012)OF THE ACT, MAKING FINDINGS AND IMPOSING REMEDIAL SANCTIONSAND ACKNOWLEDGE SERVICE OF THIS ORDER. ACCORDINGLY, IT ISHEREBY ORDERED THAT: THE FIRM, AND ITS SUCCESSORS AND ASSIGNS,SHALL CEASE AND DESIST FROM VIOLATING SECTION 6(C)(2) OF THE ACT;SHALL PAY A CIVIL MONETARY PENALTY IN THE AMOUNT OF $140,000 PLUSPOST-JUDGMENT INTEREST. IN ADDITION, THE FIRM, AND ITS SUCCESSAND ASSIGNS, SHALL COMPLY WITH THE CONDITIONS ANDUNDERTAKINGS SET FORTH IN THE OFFER.


Initiated By: COMMODITY FUTURES TRADING COMMISSION (CFTC)


Cease and Desist



Docket/Case Number: CFTC DOCKET NO. 16-10



Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, CREDIT SUISSESECURITIES (USA) LLC ("CCSU") CONSENTED TO THE ENTRY OF ORDERTHAT CSSU VIOLATED SECTION 6(C)(2) OF THE COMMODITY EXCHANGEACT. IN MARCH 2013, CREDIT SUISSE SECURITIES (USA) LLC ("CSSU")SUBMITTED TO THE CFTC'S DIVISION OF ENFORCEMENT MATERIALLYFALSE OR MISLEADING INFORMATION REFLECTING CERTAIN INFLATEDSWAP POSITIONS AND THUS INFLATED HEDGE EXEMPTIONS FOR CBOTWHEAT FUTURES CONTRACTS FOR SEVERAL DAYS IN APRIL AND JUNE2009.



Resolution:


Sanction Details: ON MARCH 28, 2016, CSSU PAID A CIVIL MONETARY PENALTY OF $140,000AS A RESULT OF THE ALLEGATIONS DESCRIBED IN PARAGRAPH 7, ABOVE.NO PORTION OF THE PENALTY WAS WAIVED.









i









Allegations: CME GROUP MARKET REGULATION CONDUCTED A REVIEW CONCERNINGORDERS SUBMITTED UNDER GLOBEX OPERATOR ID ("TAG 50 ID") "250" BYCREDIT SUISSE SECURITIES (USA) LLC ("CREDIT SUISSE") BETWEENOCTOBER 2015 AND DECEMBER 2015. DURING THE COURSE OF THEREVIEW, IT WAS DISCOVERED THAT CANCELLATION MESSAGESSUBMITTED BY CREDIT SUISSE HAD BEEN AUTO-POPULATED WITH THETAG 50 ID "250" RATHER THAN THE TAG 50 ID OF THE SPECIFIC INDIVIDUALENTERING THE ORDER CANCELLATION MESSAGE IN VIOLATION OF RULE576 ("IDENTIFICATION OF GLOBEX TERMINAL OPERATORS").



Resolution:



Firm Statement CREDIT SUISSE SECURITIES (USA) LLC ("CSSU") CONSENTED, WITHOUTADMITTING OR DENYING THE FINDINGS, TO A SUMMARY FINE OF $2,000FOR A VIOLATION OF CME RULE 576 ("IDENTIFICATION OF GLOBEXTERMINAL OPERATORS"). THIS AMOUNT WAS TIMELY PAID ON MARCH 11,2016.


Decision


i







Initiated By: FINRA





Principal Product Type: Equity - OTC


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOESTABLISH, MAINTAIN, AND ENFORCE WRITTEN POLICIES ANDPROCEDURES THAT WERE REASONABLY DESIGNED TO PREVENT TRADE-THROUGHS OF PROTECTED QUOTATIONS IN NMS STOCKS THAT DO NOTFALL WITHIN ANY APPLICABLE EXCEPTION, AND IF RELYING ON ANEXCEPTION, WERE REASONABLY DESIGNED TO ASSURE COMPLIANCEWITH THE TERMS OF THE EXCEPTION. THE FINDINGS STATED THAT THEFIRM FAILED TO TAKE REASONABLE STEPS TO ESTABLISH THATAPPROXIMATELY 7,091 INTERMARKET SWEEP ORDERS IT ROUTED METTHE DEFINITIONAL REQUIREMENTS SET FORTH IN RULE 600(B)(30) OFREGULATION NMS.



Resolution:

Other Sanctions Ordered: UNDERTAKING: REVISE THE FIRM'S WRITTEN SUPERVISORYPROCEDURES

Sanction Details: THE FIRM WAS CENSURED, FINED $75,000 AND UNDERTAKES TO REVISEITS WRITTEN SUPERVISORY PROCEDURES.FINE PAID IN FULL ON MARCH 2, 2016.


No









THE FIRM WAS CENSURED, FINED $75,000 AND UNDERTAKES TO REVISEITS WRITTEN SUPERVISORY PROCEDURES.FINE PAID IN FULL ON MARCH 2, 2016.


Initiated By: FINRA







Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOESTABLISH, MAINTAIN, AND ENFORCE WRITTEN POLICIES ANDPROCEDURES THAT WERE REASONABLY DESIGNED TO PREVENT TRADE-THROUGHS OF PROTECTED QUOTATIONS IN NMS STOCKS THAT DO NOTFALL WITHIN ANY APPLICABLE EXCEPTION, AND IF RELYING ON ANEXCEPTION, WERE REASONABLY DESIGNED TO ASSURE COMPLIANCEWITH THE TERMS OF THE EXCEPTION. THE FINDINGS STATED THAT THEFIRM FAILED TO TAKE REASONABLE STEPS TO ESTABLISH THATAPPROXIMATELY 7,091 INTERMARKET SWEEP ORDERS IT ROUTED METTHE DEFINITIONAL REQUIREMENTS SET FORTH IN RULE 600(B)(30) OFREGULATION NMS. THE CONDUCT DESCRIBED ABOVE CONSTITUTES AVIOLATION OF RULES 611(A) AND (C) OF REGULATION NMS, NASD RULE3010, AND FINRA RULE 2010.



Resolution:

Other Sanctions Ordered: UNDERTAKING: REVISE THE FIRM'S WRITTEN SUPERVISORYPROCEDURES

Sanction Details: THE FIRM WAS CENSURED, FINED $75,000 AND UNDERTAKES TO REVISEITS WRITTEN SUPERVISORY PROCEDURES.



i130©2020 FINRA. All rights reserved. Report about CREDIT SUISSE SECURITIES (USA) LLC







i


Initiated By: ATTORNEY GENERAL FOR THE STATE OF NEW YORK




CENSURE


Docket/Case Number: IN THE MATTER OF CREDIT SUISSE SECURITIES (USA) LLC, NO. 15-183



Allegations: ON FEBRUARY 1, 2016, THE OFFICE OF THE ATTORNEY GENERAL FOR THESTATE OF NEW YORK ("NYAG") ANNOUNCED THAT IT HAD ENTERED INTO ASETTLEMENT AGREEMENT WITH CREDIT SUISSE SECURITIES (USA) LLC("CSSU") RELATING TO DISCLOSURES CONCERNING CERTAINOPERATIONS OF CSSU'S ADVANCED EXECUTION SERVICES BUSINESS.THE SETTLEMENT AGREEMENT, WHICH CSSU ENTERED INTO ON AWITHOUT-ADMITTING-OR-DENYING BASIS, (A) INCLUDES FINDINGS THATCSSU, BEGINNING IN APRIL 2008, VIOLATED NEW YORK'S MARTIN ACT ANDEXECUTIVE LAW § 63(12) BY MAKING MATERIAL MISREPRESENTATIONSAND OMISSIONS RELATED TO ITS SEC-REGISTERED ALTERNATIVETRADING SYSTEMS CROSSFINDER AND LIGHT POOL AND THE MANNER INWHICH CSSU ROUTED CLIENT ORDERS AND HANDLED CONFIDENTIALCLIENT ORDER INFORMATION; (B) INCLUDES A CENSURE; AND (C)REFLECTS CSSU'S AGREEMENT TO PAY A $30 MILLION PENALTY. THESETTLEMENT AGREEMENT EXPRESSLY STATES THAT "THIS AGREEMENTIS NOT A FINAL ORDER OF ANY COURT OR GOVERNMENTAL AUTHORITY,WHICH IN NO WAY IMPAIRS THE BINDING NATURE OF THIS AGREEMENT."



Resolution:


Sanction Details: ON FEBRUARY 1, 2016, THE OFFICE OF THE ATTORNEY GENERAL FOR THESTATE OF NEW YORK ("NYAG") ANNOUNCED THAT IT HAD ENTERED INTO ASETTLEMENT AGREEMENT WITH CREDIT SUISSE SECURITIES (USA) LLC("CSSU"). THAT SETTLEMENT AGREEMENT, WHICH CSSU ENTERED INTOON A WITHOUT-ADMITTING-OR-DENYING BASIS, INCLUDES A CENSUREAND REFLECTS CSSU'S AGREEMENT TO PAY A $30 MILLION PENALTY.

Sanctions Ordered:

Settled





www.finra.org/brokercheck User GuidanceON FEBRUARY 1, 2016, THE OFFICE OF THE ATTORNEY GENERAL FOR THESTATE OF NEW YORK ("NYAG") ANNOUNCED THAT IT HAD ENTERED INTO ASETTLEMENT AGREEMENT WITH CREDIT SUISSE SECURITIES (USA) LLC("CSSU"). THAT SETTLEMENT AGREEMENT, WHICH CSSU ENTERED INTOON A WITHOUT-ADMITTING-OR-DENYING BASIS, INCLUDES A CENSUREAND REFLECTS CSSU'S AGREEMENT TO PAY A $30 MILLION PENALTY.

Firm Statement ON FEBRUARY 1, 2016, THE OFFICE OF THE ATTORNEY GENERAL FOR THESTATE OF NEW YORK ("NYAG") ANNOUNCED THAT IT HAD ENTERED INTO ASETTLEMENT AGREEMENT WITH CREDIT SUISSE SECURITIES (USA) LLC("CSSU"). THAT SETTLEMENT AGREEMENT, WHICH CSSU ENTERED INTOON A WITHOUT-ADMITTING-OR-DENYING BASIS, INCLUDES A CENSUREAND REFLECTS CSSU'S AGREEMENT TO PAY A $30 MILLION PENALTY.


i


Allegations: SEC ADMIN RELEASES 33-10013, 34-77002 / JANUARY 31, 2016: THESECURITIES AND EXCHANGE COMMISSION DEEMS IT APPROPRIATE ANDIN THE PUBLIC INTEREST THAT PUBLIC ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BE, AND HEREBY ARE, INSTITUTED AGAINSTCREDIT SUISSE SECURITIES (USA) LLC ("CSSU" OR "RESPONDENT"). ONTHE BASIS OF THIS ORDER AND RESPONDENT'S OFFER, THECOMMISSION FINDS THAT CSSU IS THE OWNER AND OPERATOR OFCROSSFINDER, AN ALTERNATIVE TRADING SYSTEM ("ATS") COMMONLYREFERRED TO AS A "DARK POOL." CSSU TRANSMITTED CONFIDENTIALSUBSCRIBER TRADING INFORMATION FROM CROSSFINDER TO TWOINTERNAL AES APPLICATIONS THAT WERE OUTSIDE OF CROSSFINDER. INTHE FIRST APPLICATION, DURING THIS PERIOD, CSSU TRANSMITTEDCROSSFINDER ORDER INFORMATION, AGGREGATED BY PRICE LEVEL, TOITS ADVANCED EXECUTION SERVICES SMART ORDER ROUTER (THE "AESSOR"), AN APPLICATION WHOSE FUNCTION WAS TO DETERMINE WHERETO ROUTE ORDERS TRANSMITTED BY CSSU CLIENTS TO CSSU FOREXECUTION. IN THE SECOND APPLICATION, CROSSFINDER TRANSMITTEDCONFIDENTIAL SUBSCRIBER TRADING INFORMATION FROMCROSSFINDER TO A CSSU APPLICATION THAT SENT INDICATIONS OFINTEREST ("IOIS") TO THE OUTBOUND ROUTERS OF TWO REGISTEREDNATIONAL SECURITIES EXCHANGES. THIS APPLICATION (THE "IOISERVER") RECEIVED CROSSFINDER CONFIDENTIAL SUBSCRIBERTRADING INFORMATION AND, IN CERTAIN CIRCUMSTANCES, THE IOISERVER SENT TO THE OUTBOUND ROUTERS OF THOSE EXCHANGES IOISDERIVED FROM CROSSFINDER ORDER INFORMATION CONCERNING "SELLSIDE" SUBSCRIBERS. BY DEFAULT, IOIS WERE NOT SENT FOR "BUY SIDE"SUBSCRIBERS. CSSU DID NOT FULLY AND COMPLETELY DISCLOSE TO ALLCROSSFINDER SUBSCRIBERS THE FACT THAT CONFIDENTIAL ORDERINFORMATION WAS BEING TRANSMITTED TO THE AES SOR OR TO THE IOISERVER. NOR DID CSSU FULLY AND COMPLETELY DISCLOSE TO ALLCROSSFINDER SUBSCRIBERS THAT CSSU PROGRAMMED THE IOI SERVERTO SEND IOIS OUTSIDE OF CSSU FOR SELL SIDE CLIENTS. CSSU ALSOMADE MISREPRESENTATIONS RELATING TO THE MANNER IN WHICHSUBSCRIBERS WERE CATEGORIZED WITHIN CROSSFINDER. CSSUSOUGHT TO DIFFERENTIATE CROSSFINDER FROM COMPETING ATSS BYDEVELOPING AND MARKETING A PROPRIETARY METHODOLOGY CALLED "ALPHA SCORING" THAT PLACED ORDER FLOW FROM SUBSCRIBERS INTOVARIOUS CATEGORIES ACCORDING TO CERTAIN CHARACTERISTICS OFTHAT TRADING FLOW. FROM DECEMBER 2010 THROUGH MARCH 2014,ALPHA SCORING WAS NOT PERFORMED AS CSSU HAD REPRESENTED.ALPHA SCORING IN CROSSFINDER INCLUDED SIGNIFICANT SUBJECTIVEELEMENTS. FURTHER, ALPHA SCORING WAS NEITHER TRANSPARENT NORWERE ALL CROSSFINDER SUBSCRIBERS CATEGORIZED ON A MONTHLYBASIS. CSSU MADE MISREPRESENTATIONS REGARDING THE MANNER INWHICH IT ROUTED CLIENT ORDERS. CSSU TOLD CLIENTS THAT THE AESSOR DID NOT PREFERENCE CROSSFINDER OR ANY OTHER VENUE WHENROUTING ORDERS WHEN, IN FACT, THE AES SOR SYSTEMATICALLYPRIORITIZED CROSSFINDER OVER OTHER VENUES IN CERTAIN STAGESOF THE DARK-ONLY ROUTING PROCESS. CSSU DID NOT DISCLOSE IN ITSFORM ATS FILING THE FACT THAT CROSSFINDER TRANSMITTED ORDERINFORMATION TO THE AES SOR, AND DID NOT FILE, AT LEAST 20 DAYSBEFORE IT IMPLEMENTED THE IOI FUNCTIONALITY, AN AMENDMENT ONFORM ATS THAT DISCLOSED THE MATERIAL FACTS. CSSU UNREASONABLYLIMITED ACCESS TO SEVERAL CROSSFINDER FUNCTIONALITIES IN ANUNFAIR OR DISCRIMINATORY MANNER TO CERTAIN SUBSCRIBERS. CSSUALSO DID NOT DISCLOSE AN ARRANGEMENT IT HAD WITH TWO HIGHFREQUENCY TRADING (HFT) FIRMS THAT, THROUGH A CROSSLINKTECHNOLOGY, THE AES SOR ROUTED CHILD ORDERS FOR EXECUTIONWITH ORDERS FROM THE HFT FIRMS. THE AES SOR ROUTED CERTAINCHILD ORDERS TO CROSSLINK AFTER ENGAGING IN AN EXCHANGE OFMESSAGES WITH ONE OR THE OTHER HFT FIRM. AS A RESULT OF THECONDUCT, CSSU WILLFULLY VIOLATED SECTION 17(A)(2) OF THESECURITIES ACT, RULE 301(B)(2) OF REGULATION ATS, RULE 301(B)(5)(II)(B)OF REGULATION ATS, RULE 301(B)(5)(II)(D) OF REGULATION ATS, RULE301(B)(10) OF REGULATION ATS, AND RULE 612 OF REGULATION NMS.









Cease and Desist






SEC ADMIN RELEASES 33-10013, 34-77002 / JANUARY 31, 2016: THESECURITIES AND EXCHANGE COMMISSION DEEMS IT APPROPRIATE ANDIN THE PUBLIC INTEREST THAT PUBLIC ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BE, AND HEREBY ARE, INSTITUTED AGAINSTCREDIT SUISSE SECURITIES (USA) LLC ("CSSU" OR "RESPONDENT"). ONTHE BASIS OF THIS ORDER AND RESPONDENT'S OFFER, THECOMMISSION FINDS THAT CSSU IS THE OWNER AND OPERATOR OFCROSSFINDER, AN ALTERNATIVE TRADING SYSTEM ("ATS") COMMONLYREFERRED TO AS A "DARK POOL." CSSU TRANSMITTED CONFIDENTIALSUBSCRIBER TRADING INFORMATION FROM CROSSFINDER TO TWOINTERNAL AES APPLICATIONS THAT WERE OUTSIDE OF CROSSFINDER. INTHE FIRST APPLICATION, DURING THIS PERIOD, CSSU TRANSMITTEDCROSSFINDER ORDER INFORMATION, AGGREGATED BY PRICE LEVEL, TOITS ADVANCED EXECUTION SERVICES SMART ORDER ROUTER (THE "AESSOR"), AN APPLICATION WHOSE FUNCTION WAS TO DETERMINE WHERETO ROUTE ORDERS TRANSMITTED BY CSSU CLIENTS TO CSSU FOREXECUTION. IN THE SECOND APPLICATION, CROSSFINDER TRANSMITTEDCONFIDENTIAL SUBSCRIBER TRADING INFORMATION FROMCROSSFINDER TO A CSSU APPLICATION THAT SENT INDICATIONS OFINTEREST ("IOIS") TO THE OUTBOUND ROUTERS OF TWO REGISTEREDNATIONAL SECURITIES EXCHANGES. THIS APPLICATION (THE "IOISERVER") RECEIVED CROSSFINDER CONFIDENTIAL SUBSCRIBERTRADING INFORMATION AND, IN CERTAIN CIRCUMSTANCES, THE IOISERVER SENT TO THE OUTBOUND ROUTERS OF THOSE EXCHANGES IOISDERIVED FROM CROSSFINDER ORDER INFORMATION CONCERNING "SELLSIDE" SUBSCRIBERS. BY DEFAULT, IOIS WERE NOT SENT FOR "BUY SIDE"SUBSCRIBERS. CSSU DID NOT FULLY AND COMPLETELY DISCLOSE TO ALLCROSSFINDER SUBSCRIBERS THE FACT THAT CONFIDENTIAL ORDERINFORMATION WAS BEING TRANSMITTED TO THE AES SOR OR TO THE IOISERVER. NOR DID CSSU FULLY AND COMPLETELY DISCLOSE TO ALLCROSSFINDER SUBSCRIBERS THAT CSSU PROGRAMMED THE IOI SERVERTO SEND IOIS OUTSIDE OF CSSU FOR SELL SIDE CLIENTS. CSSU ALSOMADE MISREPRESENTATIONS RELATING TO THE MANNER IN WHICHSUBSCRIBERS WERE CATEGORIZED WITHIN CROSSFINDER. CSSUSOUGHT TO DIFFERENTIATE CROSSFINDER FROM COMPETING ATSS BYDEVELOPING AND MARKETING A PROPRIETARY METHODOLOGY CALLED "ALPHA SCORING" THAT PLACED ORDER FLOW FROM SUBSCRIBERS INTOVARIOUS CATEGORIES ACCORDING TO CERTAIN CHARACTERISTICS OFTHAT TRADING FLOW. FROM DECEMBER 2010 THROUGH MARCH 2014,ALPHA SCORING WAS NOT PERFORMED AS CSSU HAD REPRESENTED.ALPHA SCORING IN CROSSFINDER INCLUDED SIGNIFICANT SUBJECTIVEELEMENTS. FURTHER, ALPHA SCORING WAS NEITHER TRANSPARENT NORWERE ALL CROSSFINDER SUBSCRIBERS CATEGORIZED ON A MONTHLYBASIS. CSSU MADE MISREPRESENTATIONS REGARDING THE MANNER INWHICH IT ROUTED CLIENT ORDERS. CSSU TOLD CLIENTS THAT THE AESSOR DID NOT PREFERENCE CROSSFINDER OR ANY OTHER VENUE WHENROUTING ORDERS WHEN, IN FACT, THE AES SOR SYSTEMATICALLYPRIORITIZED CROSSFINDER OVER OTHER VENUES IN CERTAIN STAGESOF THE DARK-ONLY ROUTING PROCESS. CSSU DID NOT DISCLOSE IN ITSFORM ATS FILING THE FACT THAT CROSSFINDER TRANSMITTED ORDERINFORMATION TO THE AES SOR, AND DID NOT FILE, AT LEAST 20 DAYSBEFORE IT IMPLEMENTED THE IOI FUNCTIONALITY, AN AMENDMENT ONFORM ATS THAT DISCLOSED THE MATERIAL FACTS. CSSU UNREASONABLYLIMITED ACCESS TO SEVERAL CROSSFINDER FUNCTIONALITIES IN ANUNFAIR OR DISCRIMINATORY MANNER TO CERTAIN SUBSCRIBERS. CSSUALSO DID NOT DISCLOSE AN ARRANGEMENT IT HAD WITH TWO HIGHFREQUENCY TRADING (HFT) FIRMS THAT, THROUGH A CROSSLINKTECHNOLOGY, THE AES SOR ROUTED CHILD ORDERS FOR EXECUTIONWITH ORDERS FROM THE HFT FIRMS. THE AES SOR ROUTED CERTAINCHILD ORDERS TO CROSSLINK AFTER ENGAGING IN AN EXCHANGE OFMESSAGES WITH ONE OR THE OTHER HFT FIRM. AS A RESULT OF THECONDUCT, CSSU WILLFULLY VIOLATED SECTION 17(A)(2) OF THESECURITIES ACT, RULE 301(B)(2) OF REGULATION ATS, RULE 301(B)(5)(II)(B)OF REGULATION ATS, RULE 301(B)(5)(II)(D) OF REGULATION ATS, RULE301(B)(10) OF REGULATION ATS, AND RULE 612 OF REGULATION NMS.








Resolution:


Sanction Details: CSSU CEASE AND DESIST FROM COMMITTING OR CAUSING ANYVIOLATIONS AND ANY FUTURE VIOLATIONS OF SECTION 17(A)(2) OF THESECURITIES ACT, RULES 301(B)(2), 301(B)(5) AND 301(B)(10) OFREGULATION ATS PROMULGATED UNDER THE EXCHANGE ACT AND RULE612 OF REGULATION NMS PROMULGATED UNDER THE EXCHANGE ACT; ISCENSURED; SHALL PAY DISGORGEMENT OF $20,675,510.52 ANDPREJUDGMENT INTEREST OF $3,639,643.39; AND A CIVIL MONEY PENALTYIN THE AMOUNT OF $20,000,000.

Regulator Statement IN ANTICIPATION OF THE INSTITUTION OF THESE PROCEEDINGS, CSSUHAS SUBMITTED AN OFFER OF SETTLEMENT ("OFFER") WHICH THECOMMISSION HAS DETERMINED TO ACCEPT. SOLELY FOR THE PURPOSEOF THESE PROCEEDINGS AND ANY OTHER PROCEEDINGS BROUGHT BYOR ON BEHALF OF THE COMMISSION, OR TO WHICH THE COMMISSION ISA PARTY, AND WITHOUT ADMITTING OR DENYING THE FINDINGS HEREIN,EXCEPT AS TO THE COMMISSION'S JURISDICTION OVER IT AND THESUBJECT MATTER OF THESE PROCEEDINGS, WHICH ARE ADMITTED, CSSUCONSENTS TO THE ENTRY OF THIS ORDER INSTITUTING ADMINISTRATIVEAND CEASE-AND-DESIST PROCEEDINGS PURSUANT TO SECTION 8A OFTHE SECURITIES ACT OF 1933 AND SECTIONS 15(B) AND 21C OF THESECURITIES EXCHANGE ACT OF 1934, MAKING FINDINGS, AND IMPOSINGREMEDIAL SANCTIONS AND A CEASE-AND-DESIST ORDER. ACCORDINGLY,IT IS HEREBY ORDERED THAT CSSU CEASE AND DESIST FROMCOMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONSOF SECTION 17(A)(2) OF THE SECURITIES ACT, RULES 301(B)(2), 301(B)(5)AND 301(B)(10) OF REGULATION ATS PROMULGATED UNDER THEEXCHANGE ACT AND RULE 612 OF REGULATION NMS PROMULGATEDUNDER THE EXCHANGE ACT.CSSU IS CENSURED. CSSU SHALL, WITHIN 14 DAYS OF THE ENTRY OFTHIS ORDER, PAY DISGORGEMENT OF $20,675,510.52 AND PREJUDGMENTINTEREST OF $3,639,643.39, FOR A TOTAL OF $24,315,153.91, AND A CIVILMONEY PENALTY IN THE AMOUNT OF $20,000,000 TO THE SECURITIES ANDEXCHANGE COMMISSION FOR TRANSFER TO THE GENERAL FUND OF THEUNITED STATES TREASURY.

IN DETERMINING TO ACCEPT THE OFFER, THE COMMISSION CONSIDEREDREMEDIAL MEASURES UNDERTAKEN BY RESPONDENT. IN APRIL 2011,CSSU DISCONTINUED THE USE OF THE ORDER TAGS THAT RESULTED INTHE ACCEPTANCE AND RANKING OF SUB-PENNY ORDERS. CSSU HASENHANCED ITS SAFEGUARDS AND PROCEDURES TO PROTECTCROSSFINDER SUBSCRIBER CONFIDENTIAL TRADING INFORMATION.CSSU DISCONTINUED CROSSLINK IN DECEMBER 2012. CSSU HASPROVIDED ADDITIONAL DISCLOSURES TO SUBSCRIBERS REGARDINGALPHA SCORING METHODOLOGY AND, SINCE MARCH 2014, CROSSFINDERSUBSCRIBERS HAVE BEEN SCORED AND CATEGORIZED MONTHLY. CSSUALSO HAS MADE DISCLOSURES REGARDING HOW ITS ROUTING LOGICPRIORITIZES CROSSFINDER, HAS PROVIDED SUBSCRIBERS WITHINFORMATION REGARDING ORDER HANDLING, AND HAS ENHANCEDPOLICIES AND PROCEDURES RELATED TO DISCLOSURES TOSUBSCRIBERS.


Yes


Order






IN ANTICIPATION OF THE INSTITUTION OF THESE PROCEEDINGS, CSSUHAS SUBMITTED AN OFFER OF SETTLEMENT ("OFFER") WHICH THECOMMISSION HAS DETERMINED TO ACCEPT. SOLELY FOR THE PURPOSEOF THESE PROCEEDINGS AND ANY OTHER PROCEEDINGS BROUGHT BYOR ON BEHALF OF THE COMMISSION, OR TO WHICH THE COMMISSION ISA PARTY, AND WITHOUT ADMITTING OR DENYING THE FINDINGS HEREIN,EXCEPT AS TO THE COMMISSION'S JURISDICTION OVER IT AND THESUBJECT MATTER OF THESE PROCEEDINGS, WHICH ARE ADMITTED, CSSUCONSENTS TO THE ENTRY OF THIS ORDER INSTITUTING ADMINISTRATIVEAND CEASE-AND-DESIST PROCEEDINGS PURSUANT TO SECTION 8A OFTHE SECURITIES ACT OF 1933 AND SECTIONS 15(B) AND 21C OF THESECURITIES EXCHANGE ACT OF 1934, MAKING FINDINGS, AND IMPOSINGREMEDIAL SANCTIONS AND A CEASE-AND-DESIST ORDER. ACCORDINGLY,IT IS HEREBY ORDERED THAT CSSU CEASE AND DESIST FROMCOMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONSOF SECTION 17(A)(2) OF THE SECURITIES ACT, RULES 301(B)(2), 301(B)(5)AND 301(B)(10) OF REGULATION ATS PROMULGATED UNDER THEEXCHANGE ACT AND RULE 612 OF REGULATION NMS PROMULGATEDUNDER THE EXCHANGE ACT.CSSU IS CENSURED. CSSU SHALL, WITHIN 14 DAYS OF THE ENTRY OFTHIS ORDER, PAY DISGORGEMENT OF $20,675,510.52 AND PREJUDGMENTINTEREST OF $3,639,643.39, FOR A TOTAL OF $24,315,153.91, AND A CIVILMONEY PENALTY IN THE AMOUNT OF $20,000,000 TO THE SECURITIES ANDEXCHANGE COMMISSION FOR TRANSFER TO THE GENERAL FUND OF THEUNITED STATES TREASURY.

IN DETERMINING TO ACCEPT THE OFFER, THE COMMISSION CONSIDEREDREMEDIAL MEASURES UNDERTAKEN BY RESPONDENT. IN APRIL 2011,CSSU DISCONTINUED THE USE OF THE ORDER TAGS THAT RESULTED INTHE ACCEPTANCE AND RANKING OF SUB-PENNY ORDERS. CSSU HASENHANCED ITS SAFEGUARDS AND PROCEDURES TO PROTECTCROSSFINDER SUBSCRIBER CONFIDENTIAL TRADING INFORMATION.CSSU DISCONTINUED CROSSLINK IN DECEMBER 2012. CSSU HASPROVIDED ADDITIONAL DISCLOSURES TO SUBSCRIBERS REGARDINGALPHA SCORING METHODOLOGY AND, SINCE MARCH 2014, CROSSFINDERSUBSCRIBERS HAVE BEEN SCORED AND CATEGORIZED MONTHLY. CSSUALSO HAS MADE DISCLOSURES REGARDING HOW ITS ROUTING LOGICPRIORITIZES CROSSFINDER, HAS PROVIDED SUBSCRIBERS WITHINFORMATION REGARDING ORDER HANDLING, AND HAS ENHANCEDPOLICIES AND PROCEDURES RELATED TO DISCLOSURES TOSUBSCRIBERS.


Allegations: CREDIT SUISSE SECURITIES (USA) LLC ("CSSU") CONSENTED, WITHOUTADMITTING OR DENYING THE FINDINGS, TO THE ENTRY OF A SECURITIESAND EXCHANGE COMMISSION ("SEC") ORDER FINDING THAT CSSUWILLFULLY VIOLATED SECTION 17(A)(2) OF THE SECURITIES ACT; RULES301(B)(2), 301(B)(5)(II)(B), 301(B)(5)(II)(D), AND 301(B)(10) OF REGULATIONATS; AND RULE 612 OF REGULATION NMS. AS PART OF THE SETTLEMENT,THE SEC CENSURED CSSU, ISSUED A CEASE-AND-DESIST ORDER, ANDDIRECTED CSSU TO PAY DISGORGEMENT OF $20,675,510.52,PREJUDGMENT INTEREST OF $3,639,643.39, AND A CIVIL PENALTY OF $20MILLION. THE SEC FOUND THAT BEGINNING IN AT LEAST APRIL 2008,CSSU'S OPERATION OF AND DISCLOSURES REGARDING CROSSFINDER,AN SEC-REGISTERED ALTERNATIVE TRADING SYSTEM, VIOLATED THEPROVISIONS CITED ABOVE. THE SEC'S FINDINGS INCLUDED, AMONGOTHER THINGS, THAT: (A) BETWEEN AT LEAST APRIL 2009 AND APRIL 2011,CROSSFINDER ACCEPTED AND RANKED ORDERS PRICED IN INCREMENTSSMALLER THAN ONE-CENT; (B) BETWEEN AT LEAST APRIL 2008 ANDAUGUST 2013, CSSU TRANSMITTED CONFIDENTIAL CROSSFINDERSUBSCRIBER TRADING INFORMATION TO TWO INTERNAL APPLICATIONSTHAT WERE OUTSIDE OF CROSSFINDER; (C) FROM DECEMBER 2010THROUGH MARCH 2014, CSSU MADE MISREPRESENTATIONS RELATING TOTHE MANNER IN WHICH SUBSCRIBERS WERE CATEGORIZED WITHINCROSSFINDER; (D) FROM AUGUST 2010 THROUGH AT LEAST FEBRUARY2014, CSSU UNREASONABLY LIMITED ACCESS TO SEVERAL CROSSFINDERFUNCTIONALITIES IN AN UNFAIR OR DISCRIMINATORY MANNER; AND (E)CSSU DID NOT DISCLOSE THAT IT OPERATED, FROM MAY 2009 TODECEMBER 2012, A TECHNOLOGY CALLED CROSSLINK THAT EXECUTEDTRADES BETWEEN CERTAIN CLIENT ORDERS HANDLED BY THE SMARTORDER ROUTER AND ORDERS SUBMITTED BY TWO OTHER CSSUCLIENTS.









Disgorgement


PRE-JUDGMENT INTEREST, CIVIL AND ADMINISTRATIVE PENALTIES/FINE,CENSURE, CEASE AND DESIST


Docket/Case Number: IN THE MATTER OF CREDIT SUISSE SECURITIES (USA) LLC,ADMINISTRATIVE PROCEEDING FILE NO. 3-17078



CREDIT SUISSE SECURITIES (USA) LLC ("CSSU") CONSENTED, WITHOUTADMITTING OR DENYING THE FINDINGS, TO THE ENTRY OF A SECURITIESAND EXCHANGE COMMISSION ("SEC") ORDER FINDING THAT CSSUWILLFULLY VIOLATED SECTION 17(A)(2) OF THE SECURITIES ACT; RULES301(B)(2), 301(B)(5)(II)(B), 301(B)(5)(II)(D), AND 301(B)(10) OF REGULATIONATS; AND RULE 612 OF REGULATION NMS. AS PART OF THE SETTLEMENT,THE SEC CENSURED CSSU, ISSUED A CEASE-AND-DESIST ORDER, ANDDIRECTED CSSU TO PAY DISGORGEMENT OF $20,675,510.52,PREJUDGMENT INTEREST OF $3,639,643.39, AND A CIVIL PENALTY OF $20MILLION. THE SEC FOUND THAT BEGINNING IN AT LEAST APRIL 2008,CSSU'S OPERATION OF AND DISCLOSURES REGARDING CROSSFINDER,AN SEC-REGISTERED ALTERNATIVE TRADING SYSTEM, VIOLATED THEPROVISIONS CITED ABOVE. THE SEC'S FINDINGS INCLUDED, AMONGOTHER THINGS, THAT: (A) BETWEEN AT LEAST APRIL 2009 AND APRIL 2011,CROSSFINDER ACCEPTED AND RANKED ORDERS PRICED IN INCREMENTSSMALLER THAN ONE-CENT; (B) BETWEEN AT LEAST APRIL 2008 ANDAUGUST 2013, CSSU TRANSMITTED CONFIDENTIAL CROSSFINDERSUBSCRIBER TRADING INFORMATION TO TWO INTERNAL APPLICATIONSTHAT WERE OUTSIDE OF CROSSFINDER; (C) FROM DECEMBER 2010THROUGH MARCH 2014, CSSU MADE MISREPRESENTATIONS RELATING TOTHE MANNER IN WHICH SUBSCRIBERS WERE CATEGORIZED WITHINCROSSFINDER; (D) FROM AUGUST 2010 THROUGH AT LEAST FEBRUARY2014, CSSU UNREASONABLY LIMITED ACCESS TO SEVERAL CROSSFINDERFUNCTIONALITIES IN AN UNFAIR OR DISCRIMINATORY MANNER; AND (E)CSSU DID NOT DISCLOSE THAT IT OPERATED, FROM MAY 2009 TODECEMBER 2012, A TECHNOLOGY CALLED CROSSLINK THAT EXECUTEDTRADES BETWEEN CERTAIN CLIENT ORDERS HANDLED BY THE SMARTORDER ROUTER AND ORDERS SUBMITTED BY TWO OTHER CSSUCLIENTS.


Resolution:


Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC ("CSSU") CONSENTED, WITHOUTADMITTING OR DENYING THE FINDINGS, TO THE ENTRY OF A SECURITIESAND EXCHANGE COMMISSION ("SEC") ORDER FINDING THAT CSSUWILLFULLY VIOLATED SECTION 17(A)(2) OF THE SECURITIES ACT; RULES301(B)(2), 301(B)(5)(II)(B), 301(B)(5)(II)(D), AND 301(B)(10) OF REGULATIONATS; AND RULE 612 OF REGULATION NMS. AS PART OF THE SETTLEMENT,THE SEC CENSURED CSSU, ISSUED A CEASE-AND-DESIST ORDER, ANDDIRECTED CSSU TO PAY DISGORGEMENT OF $20,675,510.52,PREJUDGMENT INTEREST OF $3,639,643.39, AND A CIVIL PENALTY OF $20MILLION.


Order






CREDIT SUISSE SECURITIES (USA) LLC ("CSSU") CONSENTED, WITHOUTADMITTING OR DENYING THE FINDINGS, TO THE ENTRY OF A SECURITIESAND EXCHANGE COMMISSION ("SEC") ORDER FINDING THAT CSSUWILLFULLY VIOLATED SECTION 17(A)(2) OF THE SECURITIES ACT; RULES301(B)(2), 301(B)(5)(II)(B), 301(B)(5)(II)(D), AND 301(B)(10) OF REGULATIONATS; AND RULE 612 OF REGULATION NMS. AS PART OF THE SETTLEMENT,THE SEC CENSURED CSSU, ISSUED A CEASE-AND-DESIST ORDER, ANDDIRECTED CSSU TO PAY DISGORGEMENT OF $20,675,510.52,PREJUDGMENT INTEREST OF $3,639,643.39, AND A CIVIL PENALTY OF $20MILLION.

Firm Statement CREDIT SUISSE SECURITIES (USA) LLC ("CSSU") CONSENTED, WITHOUTADMITTING OR DENYING THE FINDINGS, TO THE ENTRY OF A SECURITIESAND EXCHANGE COMMISSION ("SEC") ORDER FINDING THAT CSSUWILLFULLY VIOLATED SECTION 17(A)(2) OF THE SECURITIES ACT; RULES301(B)(2), 301(B)(5)(II)(B), 301(B)(5)(II)(D), AND 301(B)(10) OF REGULATIONATS; AND RULE 612 OF REGULATION NMS. AS PART OF THE SETTLEMENT,THE SEC CENSURED CSSU, ISSUED A CEASE-AND-DESIST ORDER, ANDDIRECTED CSSU TO PAY DISGORGEMENT OF $20,675,510.52,PREJUDGMENT INTEREST OF $3,639,643.39, AND A CIVIL PENALTY OF $20MILLION.


i


Allegations: SEC ADMIN RELEASES 33-10014, 34-77003 / JANUARY 31, 2016: THESECURITIES AND EXCHANGE COMMISSION DEEMS IT APPROPRIATE ANDIN THE PUBLIC INTEREST THAT PUBLIC ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BE, AND HEREBY ARE, INSTITUTED AGAINSTCREDIT SUISSE SECURITIES (USA) LLC, ("RESPONDENT" OR "CSSU"). ONTHE BASIS OF THIS ORDER AND RESPONDENT'S OFFER, THECOMMISSION FINDS THAT CSSU IS THE OWNER AND OPERATOR OF LIGHTPOOL, AN ALTERNATIVE TRADING SYSTEM ("ATS") AND ELECTRONICCOMMUNICATIONS NETWORK ("ECN"). CSSU MADE MISREPRESENTATIONSREGARDING CSSU'S USE AND APPLICATION OF AN "ALPHAFORMULA/SCORECARD" ("ALPHA FORMULA"), WHICH CSSU USED TOMEASURE TRADING BY SUBSCRIBERS THAT EXECUTED TRADES IN LIGHTPOOL AND TO DENY DIRECT ACCESS TO SUBSCRIBERS WHOSE TRADINGWAS DETERMINED TO BE "OPPORTUNISTIC." CSSU REPRESENTED TOEXISTING AND PROSPECTIVE CLIENTS THAT THE ALPHA FORMULA WOULDBE IN USE WHEN LIGHT POOL BECAME OPERATIONAL. ALTHOUGH LIGHTPOOL WAS FULLY OPERATIONAL FOR TRADING AND WAS TRADING IN NMSSTOCKS BY AT LEAST JUNE 2011, CSSU DID NOT BEGIN APPLYING THEALPHA FORMULA UNTIL JUNE 2012. DURING THIS 12-MONTH PERIOD,CSSU DID NOT CORRECT ITS PREVIOUS STATEMENTS AND DID NOTINFORM MOST SUBSCRIBERS THAT THE ALPHA FORMULA HAD NOT BEENFINALIZED AND WAS NOT IN USE. CSSU ALSO REPRESENTED TO CLIENTSAND PROSPECTIVE SUBSCRIBERS THAT ALL LIGHT POOL "PARTICIPANTS," "TRADERS," OR "CLIENTS," INCLUDING HIGHFREQUENCY TRADING FIRMS ("HFTS"), WHO WERE CLASSIFIED ASOPPORTUNISTIC WOULD BE "KICKED OUT" OF OR "LOSE ACCESS TO"LIGHT POOL OTHER THAN ACCESSING IT THROUGH THE NATIONAL STOCKEXCHANGE ("NSX"). CSSU'S REPRESENTATIONS WERE NOT ACCURATEBECAUSE CSSU DID NOT APPLY THE ALPHA FORMULA TO A SUBSCRIBER'STRADING AS A WHOLE, BUT INSTEAD APPLIED IT SEPARATELY TO THEORDER FLOW SUBMITTED UNDER EACH SYSTEM ID OF A SUBSCRIBER.ALTHOUGH CSSU SUSPENDED FROM LIGHT POOL THE FEW DIRECTSUBSCRIBERS WHO WERE CATEGORIZED AS "OPPORTUNISTIC," THEYWERE NOT "KICKED OUT" BECAUSE CSSU ALLOWED THEM TO RESUMEDIRECT TRADING IN LIGHT POOL IF THEY REPRESENTED THAT THEYWOULD IMPROVE THE QUALITY OF THEIR LIGHT POOL TRADING, ANDTHEY COULD ALSO TRADE DIRECTLY IN LIGHT POOL THROUGH OTHERSYSTEM IDS. DIRECT SUBSCRIBERS WERE ALSO GIVEN THEOPPORTUNITY TO ADJUST THEIR TRADING TO AVOID BEING LABELED AS "OPPORTUNISTIC." IN CONTRAST, CSSU DID KICK OUT SEVERAL INDIRECTSUBSCRIBERS, WHO ACCESSED LIGHT POOL VIA CSSU ALGORITHMS ANDCSSU'S ADVANCED EXECUTION SERVICES (AES) SMART ORDER ROUTER(AES SOR). INDIRECT SUBSCRIBERS ALSO WERE NOT GIVEN THEOPPORTUNITY TO IMPROVE THE QUALITY OF THEIR LIGHT POOL TRADINGTO AVOID BEING LABELED AS "OPPORTUNISTIC." CSSU DID NOT DISCLOSEIN ITS FORMS ATS AND ATS-R THAT THE ALPHA FORMULA WAS NOTAPPLIED FROM JULY 2011 THROUGH JUNE 2012. CSSU ALSOINACCURATELY REPRESENTED IN ITS FORMS ATS THAT SUBSCRIBERSWHOSE ORDER FLOW WAS IDENTIFIED AS OPPORTUNISTIC WOULD BESUSPENDED BUT COULD REGAIN DIRECT ACCESS TO LIGHT POOL AFTERMAKING CHANGES TO THE QUALITY OF THEIR ORDER FLOW. CSSU ALSODID NOT UPDATE ITS FORMS ATS TO DISCLOSE THE DIFFERENCES INHOW THE ALPHA FORMULA WAS APPLIED TO DIRECT AND INDIRECTSUBSCRIBERS, INCLUDING IN THEIR ABILITY TO REGAIN ACCESS TO LIGHTPOOL. CSSU ALSO DID NOT TIMELY UPDATE ITS FORM ATS TO REFLECTCERTAIN CHANGES TO THE APPLICATION OF THE ALPHA FORMULA THATWERE FIRST IMPLEMENTED IN THE FALL OF 2012. FINALLY, FROMJANUARY 2011 THROUGH APRIL 1, 2013, CSSU "BACKED AWAY" FROMLIGHT POOL QUOTES THAT IT DISPLAYED ON THE NSX USING THE ORDERDELIVERY FUNCTIONALITY OFFERED BY NSX. CSSU DID NOT EXECUTETHOSE AFTER THEY WERE MATCHED ON NSX BASED ON NATIONAL BESTBID AND OFFER ("NBBO") CHECKS THAT CSSU CONDUCTED EVEN THOUGHNSX ALREADY HAD PERFORMED SUCH CHECKS. AS A RESULT OF THECONDUCT DESCRIBED ABOVE, CSSU WILLFULLY VIOLATED: SECTION17(A)(2) OF THE SECURITIES ACT; RULE 301(B)(2) OF REGULATIONS ATS;AND RULE 602(B) OF REGULATION NMS.












SEC ADMIN RELEASES 33-10014, 34-77003 / JANUARY 31, 2016: THESECURITIES AND EXCHANGE COMMISSION DEEMS IT APPROPRIATE ANDIN THE PUBLIC INTEREST THAT PUBLIC ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BE, AND HEREBY ARE, INSTITUTED AGAINSTCREDIT SUISSE SECURITIES (USA) LLC, ("RESPONDENT" OR "CSSU"). ONTHE BASIS OF THIS ORDER AND RESPONDENT'S OFFER, THECOMMISSION FINDS THAT CSSU IS THE OWNER AND OPERATOR OF LIGHTPOOL, AN ALTERNATIVE TRADING SYSTEM ("ATS") AND ELECTRONICCOMMUNICATIONS NETWORK ("ECN"). CSSU MADE MISREPRESENTATIONSREGARDING CSSU'S USE AND APPLICATION OF AN "ALPHAFORMULA/SCORECARD" ("ALPHA FORMULA"), WHICH CSSU USED TOMEASURE TRADING BY SUBSCRIBERS THAT EXECUTED TRADES IN LIGHTPOOL AND TO DENY DIRECT ACCESS TO SUBSCRIBERS WHOSE TRADINGWAS DETERMINED TO BE "OPPORTUNISTIC." CSSU REPRESENTED TOEXISTING AND PROSPECTIVE CLIENTS THAT THE ALPHA FORMULA WOULDBE IN USE WHEN LIGHT POOL BECAME OPERATIONAL. ALTHOUGH LIGHTPOOL WAS FULLY OPERATIONAL FOR TRADING AND WAS TRADING IN NMSSTOCKS BY AT LEAST JUNE 2011, CSSU DID NOT BEGIN APPLYING THEALPHA FORMULA UNTIL JUNE 2012. DURING THIS 12-MONTH PERIOD,CSSU DID NOT CORRECT ITS PREVIOUS STATEMENTS AND DID NOTINFORM MOST SUBSCRIBERS THAT THE ALPHA FORMULA HAD NOT BEENFINALIZED AND WAS NOT IN USE. CSSU ALSO REPRESENTED TO CLIENTSAND PROSPECTIVE SUBSCRIBERS THAT ALL LIGHT POOL "PARTICIPANTS," "TRADERS," OR "CLIENTS," INCLUDING HIGHFREQUENCY TRADING FIRMS ("HFTS"), WHO WERE CLASSIFIED ASOPPORTUNISTIC WOULD BE "KICKED OUT" OF OR "LOSE ACCESS TO"LIGHT POOL OTHER THAN ACCESSING IT THROUGH THE NATIONAL STOCKEXCHANGE ("NSX"). CSSU'S REPRESENTATIONS WERE NOT ACCURATEBECAUSE CSSU DID NOT APPLY THE ALPHA FORMULA TO A SUBSCRIBER'STRADING AS A WHOLE, BUT INSTEAD APPLIED IT SEPARATELY TO THEORDER FLOW SUBMITTED UNDER EACH SYSTEM ID OF A SUBSCRIBER.ALTHOUGH CSSU SUSPENDED FROM LIGHT POOL THE FEW DIRECTSUBSCRIBERS WHO WERE CATEGORIZED AS "OPPORTUNISTIC," THEYWERE NOT "KICKED OUT" BECAUSE CSSU ALLOWED THEM TO RESUMEDIRECT TRADING IN LIGHT POOL IF THEY REPRESENTED THAT THEYWOULD IMPROVE THE QUALITY OF THEIR LIGHT POOL TRADING, ANDTHEY COULD ALSO TRADE DIRECTLY IN LIGHT POOL THROUGH OTHERSYSTEM IDS. DIRECT SUBSCRIBERS WERE ALSO GIVEN THEOPPORTUNITY TO ADJUST THEIR TRADING TO AVOID BEING LABELED AS "OPPORTUNISTIC." IN CONTRAST, CSSU DID KICK OUT SEVERAL INDIRECTSUBSCRIBERS, WHO ACCESSED LIGHT POOL VIA CSSU ALGORITHMS ANDCSSU'S ADVANCED EXECUTION SERVICES (AES) SMART ORDER ROUTER(AES SOR). INDIRECT SUBSCRIBERS ALSO WERE NOT GIVEN THEOPPORTUNITY TO IMPROVE THE QUALITY OF THEIR LIGHT POOL TRADINGTO AVOID BEING LABELED AS "OPPORTUNISTIC." CSSU DID NOT DISCLOSEIN ITS FORMS ATS AND ATS-R THAT THE ALPHA FORMULA WAS NOTAPPLIED FROM JULY 2011 THROUGH JUNE 2012. CSSU ALSOINACCURATELY REPRESENTED IN ITS FORMS ATS THAT SUBSCRIBERSWHOSE ORDER FLOW WAS IDENTIFIED AS OPPORTUNISTIC WOULD BESUSPENDED BUT COULD REGAIN DIRECT ACCESS TO LIGHT POOL AFTERMAKING CHANGES TO THE QUALITY OF THEIR ORDER FLOW. CSSU ALSODID NOT UPDATE ITS FORMS ATS TO DISCLOSE THE DIFFERENCES INHOW THE ALPHA FORMULA WAS APPLIED TO DIRECT AND INDIRECTSUBSCRIBERS, INCLUDING IN THEIR ABILITY TO REGAIN ACCESS TO LIGHTPOOL. CSSU ALSO DID NOT TIMELY UPDATE ITS FORM ATS TO REFLECTCERTAIN CHANGES TO THE APPLICATION OF THE ALPHA FORMULA THATWERE FIRST IMPLEMENTED IN THE FALL OF 2012. FINALLY, FROMJANUARY 2011 THROUGH APRIL 1, 2013, CSSU "BACKED AWAY" FROMLIGHT POOL QUOTES THAT IT DISPLAYED ON THE NSX USING THE ORDERDELIVERY FUNCTIONALITY OFFERED BY NSX. CSSU DID NOT EXECUTETHOSE AFTER THEY WERE MATCHED ON NSX BASED ON NATIONAL BESTBID AND OFFER ("NBBO") CHECKS THAT CSSU CONDUCTED EVEN THOUGHNSX ALREADY HAD PERFORMED SUCH CHECKS. AS A RESULT OF THECONDUCT DESCRIBED ABOVE, CSSU WILLFULLY VIOLATED: SECTION17(A)(2) OF THE SECURITIES ACT; RULE 301(B)(2) OF REGULATIONS ATS;AND RULE 602(B) OF REGULATION NMS.







Cease and Desist




Resolution:


Sanction Details: THE FIRM SHALL CEASE AND DESIST FROM COMMITTING OR CAUSINGANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF SECTION 17(A)(2) OFTHE SECURITIES ACT; RULE 301(B)(2) OF REGULATIONS ATS; AND RULE602(B) OF REGULATION NMS; IS CENSURED; SHALL PAY A CIVIL MONEYPENALTY IN THE AMOUNT OF $10,000,000.

Regulator Statement IN ANTICIPATION OF THE INSTITUTION OF THESE PROCEEDINGS,RESPONDENT HAS SUBMITTED AN OFFER OF SETTLEMENT (THE "OFFER")WHICH THE COMMISSION HAS DETERMINED TO ACCEPT. SOLELY FOR THEPURPOSE OF THESE PROCEEDINGS AND ANY OTHER PROCEEDINGSBROUGHT BY OR ON BEHALF OF THE COMMISSION, OR TO WHICH THECOMMISSION IS A PARTY, AND WITHOUT ADMITTING OR DENYING THEFINDINGS HEREIN, EXCEPT AS TO THE COMMISSION'S JURISDICTIONOVER IT AND THE SUBJECT MATTER OF THESE PROCEEDINGS, WHICHARE ADMITTED, RESPONDENT CONSENTS TO THE ENTRY OF THIS ORDERINSTITUTING ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS,PURSUANT TO SECTION 8A OF THE SECURITIES ACT OF 1933 ANDSECTIONS 15(B) AND 21C OF THE SECURITIES EXCHANGE ACT OF 1934MAKING FINDINGS, AND IMPOSING REMEDIAL SANCTIONS AND A CEASE-AND-DESIST ORDER.ACCORDINGLY, IT IS HEREBY ORDERED THAT CSSU SHALL CEASE ANDDESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANYFUTURE VIOLATIONS OF SECTION 17(A)(2) OF THE SECURITIES ACT; RULE301(B)(2) OF REGULATIONS ATS; AND RULE 602(B) OF REGULATION NMS.CSSU IS CENSURED; AND CSSU SHALL, WITHIN 14 DAYS OF THE ENTRY OFTHIS ORDER, PAY A CIVIL MONEY PENALTY IN THE AMOUNT OF $10,000,000TO THE SECURITIES AND EXCHANGE COMMISSION FOR TRANSFER TOTHE GENERAL FUND OF THE UNITED STATES TREASURY.


Yes


Order






IN ANTICIPATION OF THE INSTITUTION OF THESE PROCEEDINGS,RESPONDENT HAS SUBMITTED AN OFFER OF SETTLEMENT (THE "OFFER")WHICH THE COMMISSION HAS DETERMINED TO ACCEPT. SOLELY FOR THEPURPOSE OF THESE PROCEEDINGS AND ANY OTHER PROCEEDINGSBROUGHT BY OR ON BEHALF OF THE COMMISSION, OR TO WHICH THECOMMISSION IS A PARTY, AND WITHOUT ADMITTING OR DENYING THEFINDINGS HEREIN, EXCEPT AS TO THE COMMISSION'S JURISDICTIONOVER IT AND THE SUBJECT MATTER OF THESE PROCEEDINGS, WHICHARE ADMITTED, RESPONDENT CONSENTS TO THE ENTRY OF THIS ORDERINSTITUTING ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS,PURSUANT TO SECTION 8A OF THE SECURITIES ACT OF 1933 ANDSECTIONS 15(B) AND 21C OF THE SECURITIES EXCHANGE ACT OF 1934MAKING FINDINGS, AND IMPOSING REMEDIAL SANCTIONS AND A CEASE-AND-DESIST ORDER.ACCORDINGLY, IT IS HEREBY ORDERED THAT CSSU SHALL CEASE ANDDESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANYFUTURE VIOLATIONS OF SECTION 17(A)(2) OF THE SECURITIES ACT; RULE301(B)(2) OF REGULATIONS ATS; AND RULE 602(B) OF REGULATION NMS.CSSU IS CENSURED; AND CSSU SHALL, WITHIN 14 DAYS OF THE ENTRY OFTHIS ORDER, PAY A CIVIL MONEY PENALTY IN THE AMOUNT OF $10,000,000TO THE SECURITIES AND EXCHANGE COMMISSION FOR TRANSFER TOTHE GENERAL FUND OF THE UNITED STATES TREASURY.






CENSURE, CEASE AND DESIST


Docket/Case Number: IN THE MATTER OF CREDIT SUISSE SECURITIES (USA) LLC,ADMINISTRATIVE PROCEEDING FILE NO. 3-17079



Allegations: CREDIT SUISSE SECURITIES (USA) LLC ("CSSU") CONSENTED, WITHOUTADMITTING OR DENYING THE FINDINGS, TO THE ENTRY OF A SECURITIESAND EXCHANGE COMMISSION ("SEC") ORDER FINDING THAT CSSUWILLFULLY VIOLATED SECTION 17(A)(2) OF THE SECURITIES ACT; RULE301(B)(2) OF REGULATION ATS; AND RULE 602(B) OF REGULATION NMS. ASPART OF THE SETTLEMENT, THE SEC CENSURED CSSU, ISSUED A CEASE-AND-DESIST ORDER, AND DIRECTED CSSU TO PAY A CIVIL PENALTY OF $10MILLION. THE SEC FOUND THAT SINCE JANUARY 2011, CSSU'S OPERATIONOF AND DISCLOSURES REGARDING LIGHT POOL, AN SEC-REGISTEREDALTERNATIVE TRADING SYSTEM, VIOLATED THE PROVISIONS CITEDABOVE. THE SEC'S FINDINGS INCLUDED, AMONG OTHER THINGS, THAT: (A)FROM AT LEAST JUNE 2011 UNTIL JUNE 2012, CSSU DID NOT APPLY ITSLIGHT POOL ALPHA FORMULA AS IT HAD REPRESENTED; (B) CSSU MADEINACCURATE REPRESENTATIONS ABOUT THE MANNER IN WHICH ITAPPLIED THE ALPHA FORMULA TO LIGHT POOL ORDER FLOW; (C) CSSUDID NOT TIMELY UPDATE ITS FORM ATS AND DID NOT MAKE CERTAINDISCLOSURES IN ITS FORMS ATS AND ATS-R; AND (D) FROM JANUARY 2011THROUGH APRIL 1, 2013, CSSU DID NOT EXECUTE CERTAIN ORDERDELIVERY ORDERS THAT THE NATIONAL STOCK EXCHANGE SENT TOLIGHT POOL.



Resolution: Order







Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC ("CSSU") CONSENTED, WITHOUTADMITTING OR DENYING THE FINDINGS, TO THE ENTRY OF A SECURITIESAND EXCHANGE COMMISSION ("SEC") ORDER FINDING THAT CSSUWILLFULLY VIOLATED SECTION 17(A)(2) OF THE SECURITIES ACT; RULE301(B)(2) OF REGULATION ATS; AND RULE 602(B) OF REGULATION NMS. ASPART OF THE SETTLEMENT, THE SEC CENSURED CSSU, ISSUED A CEASE-AND-DESIST ORDER, AND DIRECTED CSSU TO PAY A CIVIL PENALTY OF $10MILLION.

Firm Statement CREDIT SUISSE SECURITIES (USA) LLC ("CSSU") CONSENTED, WITHOUTADMITTING OR DENYING THE FINDINGS, TO THE ENTRY OF A SECURITIESAND EXCHANGE COMMISSION ("SEC") ORDER FINDING THAT CSSUWILLFULLY VIOLATED SECTION 17(A)(2) OF THE SECURITIES ACT; RULE301(B)(2) OF REGULATION ATS; AND RULE 602(B) OF REGULATION NMS. ASPART OF THE SETTLEMENT, THE SEC CENSURED CSSU, ISSUED A CEASE-AND-DESIST ORDER, AND DIRECTED CSSU TO PAY A CIVIL PENALTY OF $10MILLION.



i


Initiated By: ICE FUTURES U.S., INC






Other Product Type(s): FUTURES

Allegations: CSSU MAY HAVE VIOLATED RULE 4.02(K)(2)(D) IN TWO INSTANCES ONJANUARY 2, 2015 BY FAILING TO UTILIZE THE EXCHANGE'S CROSSINGORDER (CO) FUNCTIONALITY WHEN ENTERING OPPOSING RESERVEQUANTITY ORDERS.








Resolution:




Decision


i


Initiated By: ICE FUTURES U.S., INC






Other Product Type(s): FUTURES

Allegations: CSSU MAY HAVE VIOLATED ICE CLEAR U.S. RULE 4.03(A) BY REPORTINGINACCURATE OPEN INTEREST IN THE MAY 2014 COCOA FUTURESCONTRACT ON APRIL 14, AND 15, 2014 WHICH RESULTED IN ANOVERSTATEMENT OF OPEN INTEREST IN THE CONTRACT FOR TRADEDATE APRIL 11 AND 14, 2014



Resolution:


Sanction Details: THE FIRM WAS FINED $30,000.


Settled


i








Initiated By: NASDAQ OPTIONS MARKET






Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOADOPT AND MAINTAIN, ON A PRE-ORDER BASIS OR OTHERWISE, ANADEQUATE SYSTEM OF RISK MANAGEMENT CONTROLS ANDSUPERVISORY PROCEDURES, INCLUDING A SYSTEM OF FOLLOW-UP ANDREVIEW, REASONABLY DESIGNED TO: (I) PREVENT THE ENTRY OF A HIGHVOLUME OF ORDERS AND/OR QUOTATIONS; (II) EXPLICITLY ADDRESSRULE 15C3-5 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF1934; (III) ENSURE COMPLIANCE WITH THE RELEVANT PROVISIONS OFRULE 15C3-5; AND (IV) PREVENT THE TRANSMISSION OF, AND TOSUPERVISE THE ALGORITHM TO ENSURE THAT IT DID NOT TRANSMIT, ANEXCESSIVE NUMBER OF ORDERS OR QUOTATIONS TO THE NASDAQOPTIONS MARKET (NOM). THE FINDINGS STATED THAT IN APPROXIMATELY8,100 INSTANCES DURING THE REVIEW PERIOD, THE MAJORITY OF WHICHSTEMMED FROM INADVERTENTLY OPERATING THROUGHOUT A SINGLETRADING DAY IN THE OPENING ROTATION MODE, THE FIRM'SPROPRIETARY ALGORITHM TRANSMITTED THOUSANDS OF ORDERSAND/OR QUOTATIONS PER SECOND IN VARIOUS OPTIONS SERIES TONOM, RESULTING IN MINIMAL OR NO EXECUTIONS IN THOSE OPTIONSSERIES. THE FIRM DID NOT DETECT, AND AT THE TIME HAD NO CONTROLIN PLACE TO DETECT, THE ALGORITHM'S HIGH VOLUME TRANSMISSIONOF ORDERS AND/OR QUOTATIONS IN THE OPENING ROTATION MODE.DESPITE THE FIRM'S PRE-DEPLOYMENT TESTING OF THE ALGORITHM,THE FIRM FAILED TO PRESERVE, OR COULD NOT PROVIDE, EVIDENCETHAT IT HAD TESTED THE ALGORITHM OR ANY MODIFICATIONS TO THEALGORITHM PRIOR TO ITS DEPLOYMENT, OR THAT ANY SUCH TESTINGWAS REASONABLY DESIGNED TO PREVENT OR DETECT THE ALGORITHM'SHIGH VOLUME TRANSMISSION OF ORDERS AND/OR QUOTATIONS WHILEOPERATING IN THE OPENING ROTATION MODE OR OTHERWISE. THE FIRMVIOLATED RULES 15C3-5(B) AND (C)(2) PROMULGATED UNDER THESECURITIES EXCHANGE ACT OF 1934, AND CHAPTER III, SECTION 2(A) OFTHE NOM RULES. THE FINDINGS ALSO STATED THAT DURING THE REVIEWPERIOD, THE FIRM FAILED TO REASONABLY SUPERVISE ITS PROPRIETARYALGORITHM TO ENSURE THAT IT DID NOT TRANSMIT EXCESSIVE ORDERSAND/OR QUOTATIONS TO NOM. THE FIRM VIOLATED CHAPTER III, SECTION2(A) OF THE NOM RULES.










Resolution:


Sanction Details: THE FIRM WAS CENSURED AND FINED $250,000, OF WHICH $25,000 SHALLBE PAID TO NOM. ACCEPTANCE OF THIS AWC IS CONDITIONED UPONACCEPTANCE OF PARALLEL SETTLEMENT AGREEMENTS IN RELATEDMATTERS BETWEEN THE FIRM AND THE FOLLOWING SELF-REGULATORYORGANIZATIONS: (I) NYSE ARCA, INC.; (II) NYSE MKT LLC; AND (III) NASDAQOMX PHLX LLC.


No




Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOADOPT AND MAINTAIN, ON A PRE-ORDER BASIS OR OTHERWISE, ANADEQUATE SYSTEM OF RISK MANAGEMENT CONTROLS ANDSUPERVISORY PROCEDURES, INCLUDING A SYSTEM OF FOLLOW-UP ANDREVIEW, REASONABLY DESIGNED TO: (I) PREVENT THE ENTRY OF A HIGHVOLUME OF ORDERS AND/OR QUOTATIONS; (II) EXPLICITLY ADDRESSRULE 15C3-5 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF1934; (III) ENSURE COMPLIANCE WITH THE RELEVANT PROVISIONS OFRULE 15C3-5; AND (IV) PREVENT THE TRANSMISSION OF, AND TOSUPERVISE THE ALGORITHM TO ENSURE THAT IT DID NOT TRANSMIT, ANEXCESSIVE NUMBER OF ORDERS OR QUOTATIONS TO THE NASDAQOPTIONS MARKET (NOM). THE FINDINGS STATED THAT IN APPROXIMATELY8,100 INSTANCES DURING THE REVIEW PERIOD, THE MAJORITY OF WHICHSTEMMED FROM INADVERTENTLY OPERATING THROUGHOUT A SINGLETRADING DAY IN THE OPENING ROTATION MODE, THE FIRM'SPROPRIETARY ALGORITHM TRANSMITTED THOUSANDS OF ORDERSAND/OR QUOTATIONS PER SECOND IN VARIOUS OPTIONS SERIES TONOM, RESULTING IN MINIMAL OR NO EXECUTIONS IN THOSE OPTIONSSERIES. THE FIRM DID NOT DETECT, AND AT THE TIME HAD NO CONTROLIN PLACE TO DETECT, THE ALGORITHM'S HIGH VOLUME TRANSMISSIONOF ORDERS AND/OR QUOTATIONS IN THE OPENING ROTATION MODE.DESPITE THE FIRM'S PRE-DEPLOYMENT TESTING OF THE ALGORITHM,THE FIRM FAILED TO PRESERVE, OR COULD NOT PROVIDE, EVIDENCETHAT IT HAD TESTED THE ALGORITHM OR ANY MODIFICATIONS TO THEALGORITHM PRIOR TO ITS DEPLOYMENT, OR THAT ANY SUCH TESTINGWAS REASONABLY DESIGNED TO PREVENT OR DETECT THE ALGORITHM'SHIGH VOLUME TRANSMISSION OF ORDERS AND/OR QUOTATIONS WHILEOPERATING IN THE OPENING ROTATION MODE OR OTHERWISE. THE FIRMVIOLATED RULES 15C3-5(B) AND (C)(2) PROMULGATED UNDER THESECURITIES EXCHANGE ACT OF 1934, AND CHAPTER III, SECTION 2(A) OFTHE NOM RULES. THE FINDINGS ALSO STATED THAT DURING THE REVIEWPERIOD, THE FIRM FAILED TO REASONABLY SUPERVISE ITS PROPRIETARYALGORITHM TO ENSURE THAT IT DID NOT TRANSMIT EXCESSIVE ORDERSAND/OR QUOTATIONS TO NOM. THE FIRM VIOLATED CHAPTER III, SECTION2(A) OF THE NOM RULES.







Initiated By: NASDAQ OPTIONS MARKET







WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOADOPT AND MAINTAIN, ON A PRE-ORDER BASIS OR OTHERWISE, ANADEQUATE SYSTEM OF RISK MANAGEMENT CONTROLS ANDSUPERVISORY PROCEDURES, INCLUDING A SYSTEM OF FOLLOW-UP ANDREVIEW, REASONABLY DESIGNED TO: (I) PREVENT THE ENTRY OF A HIGHVOLUME OF ORDERS AND/OR QUOTATIONS; (II) EXPLICITLY ADDRESSRULE 15C3-5 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF1934; (III) ENSURE COMPLIANCE WITH THE RELEVANT PROVISIONS OFRULE 15C3-5; AND (IV) PREVENT THE TRANSMISSION OF, AND TOSUPERVISE THE ALGORITHM TO ENSURE THAT IT DID NOT TRANSMIT, ANEXCESSIVE NUMBER OF ORDERS OR QUOTATIONS TO THE NASDAQOPTIONS MARKET (NOM). THE FINDINGS STATED THAT IN APPROXIMATELY8,100 INSTANCES DURING THE REVIEW PERIOD, THE MAJORITY OF WHICHSTEMMED FROM INADVERTENTLY OPERATING THROUGHOUT A SINGLETRADING DAY IN THE OPENING ROTATION MODE, THE FIRM'SPROPRIETARY ALGORITHM TRANSMITTED THOUSANDS OF ORDERSAND/OR QUOTATIONS PER SECOND IN VARIOUS OPTIONS SERIES TONOM, RESULTING IN MINIMAL OR NO EXECUTIONS IN THOSE OPTIONSSERIES. THE FIRM DID NOT DETECT, AND AT THE TIME HAD NO CONTROLIN PLACE TO DETECT, THE ALGORITHM'S HIGH VOLUME TRANSMISSIONOF ORDERS AND/OR QUOTATIONS IN THE OPENING ROTATION MODE.DESPITE THE FIRM'S PRE-DEPLOYMENT TESTING OF THE ALGORITHM,THE FIRM FAILED TO PRESERVE, OR COULD NOT PROVIDE, EVIDENCETHAT IT HAD TESTED THE ALGORITHM OR ANY MODIFICATIONS TO THEALGORITHM PRIOR TO ITS DEPLOYMENT, OR THAT ANY SUCH TESTINGWAS REASONABLY DESIGNED TO PREVENT OR DETECT THE ALGORITHM'SHIGH VOLUME TRANSMISSION OF ORDERS AND/OR QUOTATIONS WHILEOPERATING IN THE OPENING ROTATION MODE OR OTHERWISE. THE FIRMVIOLATED RULES 15C3-5(B) AND (C)(2) PROMULGATED UNDER THESECURITIES EXCHANGE ACT OF 1934, AND CHAPTER III, SECTION 2(A) OFTHE NOM RULES. THE FINDINGS ALSO STATED THAT DURING THE REVIEWPERIOD, THE FIRM FAILED TO REASONABLY SUPERVISE ITS PROPRIETARYALGORITHM TO ENSURE THAT IT DID NOT TRANSMIT EXCESSIVE ORDERSAND/OR QUOTATIONS TO NOM. THE FIRM VIOLATED CHAPTER III, SECTION2(A) OF THE NOM RULES.


Resolution:


Sanction Details: THE FIRM WAS CENSURED AND FINED $250,000, OF WHICH $25,000 SHALLBE PAID TO NOM. ACCEPTANCE OF THIS AWC IS CONDITIONED UPONACCEPTANCE OF PARALLEL SETTLEMENT AGREEMENTS IN RELATEDMATTERS BETWEEN THE FIRM AND THE FOLLOWING SELF-REGULATORYORGANIZATIONS: (I) NYSE ARCA, INC.; (II) NYSE MKT LLC; AND (III) NASDAQOMX PHLX LLC.








THE FIRM WAS CENSURED AND FINED $250,000, OF WHICH $25,000 SHALLBE PAID TO NOM. ACCEPTANCE OF THIS AWC IS CONDITIONED UPONACCEPTANCE OF PARALLEL SETTLEMENT AGREEMENTS IN RELATEDMATTERS BETWEEN THE FIRM AND THE FOLLOWING SELF-REGULATORYORGANIZATIONS: (I) NYSE ARCA, INC.; (II) NYSE MKT LLC; AND (III) NASDAQOMX PHLX LLC.


i


Initiated By: NASDAQ OMX PHLX, INC.





Allegations: THE FIRM FAILED TO: (I) ADOPT AND IMPLEMENT ADEQUATESUPERVISORY SYSTEMS, CONTROLS AND PROCEDURES TO PREVENTTHE ENTRY OF EXCESSIVE ORDERS AND/OR QUOTATIONS BY ITSPROPRIETARY ALGORITHM; (II) COMPLY OR ENFORCE COMPLIANCE WITHITS WRITTEN SUPERVISORY PROCEDURES (WSPS) REQUIRING IT TO TESTITS ALGORITHM AND MODIFICATIONS THERETO, AND (III) ENSURE THATTHE RESULTS OF SUCH TESTING WERE DOCUMENTED AND PRESERVEDIN ACCORDANCE WITH THE FIRM'S WSPS. DESPITE THE FIRM'S PRE-DEPLOYMENT TESTING OF THE ALGORITHM, IT FAILED TO PRESERVE, ORCOULD NOT PROVIDE EVIDENCE THAT IT HAD TESTED THE ALGORITHMOR ANY MODIFICATIONS TO THE ALGORITHM PRIOR TO ITS DEPLOYMENT,OR THAT ANY SUCH TESTING WAS REASONABLY DESIGNED TO PREVENTOR DETECT THE HIGH VOLUME OF ORDERS. AS A RESULT, THE FIRMVIOLATED NASDAQ OMX PHLX LLC (EXCHANGE OR PHLX) RULES 748(B),(D) AND (G) AND 707. AFTER THE COMPLIANCE DATE ADOPTION OF THERELEVANT PROVISIONS OF SECURITIES EXCHANGE ACT OF 1934(EXCHANGE ACT) RULE 15C3-5, THE FIRM FAILED TO ADOPT ANDMAINTAIN, ON A PRE-ORDER BASIS OR OTHERWISE, AN ADEQUATESYSTEM OF RISK MANAGEMENT CONTROLS AND SUPERVISORYPROCEDURES, INCLUDING A SYSTEM OF FOLLOW-UP AND REVIEW,REASONABLY DESIGNED TO: (I) PREVENT THE ENTRY OF A HIGH VOLUMEOF ORDERS AND/OR QUOTATIONS; (II) EXPLICITLY ADDRESS RULE 15C3-5PROMULGATED UNDER THE EXCHANGE ACT; (III) ENSURE COMPLIANCEWITH THE RELEVANT PROVISIONS OF RULE 15C3-5; AND (IV) PREVENT THETRANSMISSION OF AND TO SUPERVISE THE ALGORITHM TO ENSURE THATIT DID NOT TRANSMIT, AN EXCESSIVE NUMBER OF ORDERS ORQUOTATIONS TO THE PHLX. AS A RESULT, THE FIRM VIOLATED RULES15C3-5(B), (C)(1 )(II) AND (C)(2)(1) PROMULGATED UNDER THE EXCHANGEACT, AND EXCHANGE RULES 707 AND 748(B), (D) AND (G).








Other


N/A



Resolution:


Sanction Details: THE FIRM MADE AND ENTERED INTO AN OFFER OFSETTLEMENT, STIPULATION OF FACTS AND CONSENT TO SANCTIONS,PURSUANT TO EXCHANGE RULE 960.7, SOLELY FOR THE PURPOSES OFTHESE PROCEEDINGS AND TO SETTLE AND CONCLUDE ALL DISCIPLINARYACTIONS BY THE EXCHANGE BASED ON OR ARISING OUT OF THE FACTSHEREINAFTER STIPULATED. THE FIRM STIPULATES TO THE FACTS,CONSENTS TO THE CONCLUSION OF VIOLATIONS OF CERTAINPROVISIONS OF THE EXCHANGE ACT, AS AMENDED AND EXCHANGERULES, AND CONSENTS TO THE IMPOSITION OF SANCTIONSSPECIFICALLY INCLUDING, BUT NOT LIMITED TO, CONSENTING TO PAYTHE FINE IMPOSED BY THE COMMITTEE CONSISTENT WITH THE OFFER,AND TO COMPLY WITH ALL OTHER SANCTIONS, ALL AS HEREINAFTER SETFORTH, WITHOUT ADMITTING OR DENYING THE ALLEGATIONS ORCONCLUSIONS IN THE STATEMENT OF CHARGES. THE COMMITTEEBELIEVES THAT THE SANCTIONS PROPOSED BY THE FIRM IN ITS OFFERSERVE THE PUBLIC INTEREST, ARE SUFFICIENTLY REMEDIAL UNDER THECIRCUMSTANCES, AND REPRESENT A PROPER DISCHARGE OF THEEXCHANGE'S REGULATORY RESPONSIBILITIES UNDER THE EXCHANGEACT. THE COMMITTEE CONCURS IN THE SANCTIONS CONSENTED TO BYTHE FIRM, AND ORDERS THE IMPOSITION OF THE FOLLOWINGSANCTIONS: A CENSURE AND A TOTAL FINE IN THE AMOUNT OF $250,000,OF WHICH $175,000 SHALL BE PAID TO THE EXCHANGE.


No


Decision







Initiated By: NASDAQ OMX PHLX, INC.







Allegations: THE FIRM FAILED TO: (I) ADOPT AND IMPLEMENT ADEQUATESUPERVISORY SYSTEMS, CONTROLS AND PROCEDURES TO PREVENTTHE ENTRY OF EXCESSIVE ORDERS AND/OR QUOTATIONS BY ITSPROPRIETARY ALGORITHM; (II) COMPLY OR ENFORCE COMPLIANCE WITHITS WRITTEN SUPERVISORY PROCEDURES (WSPS) REQUIRING IT TO TESTITS ALGORITHM AND MODIFICATIONS THERETO, AND (III) ENSURE THATTHE RESULTS OF SUCH TESTING WERE DOCUMENTED AND PRESERVEDIN ACCORDANCE WITH THE FIRM'S WSPS. DESPITE THE FIRM'S PRE-DEPLOYMENT TESTING OF THE ALGORITHM, IT FAILED TO PRESERVE, ORCOULD NOT PROVIDE EVIDENCE THAT IT HAD TESTED THE ALGORITHMOR ANY MODIFICATIONS TO THE ALGORITHM PRIOR TO ITS DEPLOYMENT,OR THAT ANY SUCH TESTING WAS REASONABLY DESIGNED TO PREVENTOR DETECT THE HIGH VOLUME OF ORDERS. AS A RESULT, THE FIRMVIOLATED NASDAQ OMX PHLX LLC (EXCHANGE OR PHLX) RULES 748(B),(D) AND (G) AND 707. AFTER THE COMPLIANCE DATE ADOPTION OF THERELEVANT PROVISIONS OF SECURITIES EXCHANGE ACT OF 1934(EXCHANGE ACT) RULE 15C3-5, THE FIRM FAILED TO ADOPT ANDMAINTAIN, ON A PRE-ORDER BASIS OR OTHERWISE, AN ADEQUATESYSTEM OF RISK MANAGEMENT CONTROLS AND SUPERVISORYPROCEDURES, INCLUDING A SYSTEM OF FOLLOW-UP AND REVIEW,REASONABLY DESIGNED TO: (I) PREVENT THE ENTRY OF A HIGH VOLUMEOF ORDERS AND/OR QUOTATIONS; (II) EXPLICITLY ADDRESS RULE 15C3-5PROMULGATED UNDER THE EXCHANGE ACT; (III) ENSURE COMPLIANCEWITH THE RELEVANT PROVISIONS OF RULE 15C3-5; AND (IV) PREVENT THETRANSMISSION OF AND TO SUPERVISE THE ALGORITHM TO ENSURE THATIT DID NOT TRANSMIT, AN EXCESSIVE NUMBER OF ORDERS ORQUOTATIONS TO THE PHLX. AS A RESULT, THE FIRM VIOLATED RULES15C3-5(B), (C)(1 )(II) AND (C)(2)(1) PROMULGATED UNDER THE EXCHANGEACT, AND EXCHANGE RULES 707 AND 748(B), (D) AND (G).


Resolution: Decision








Sanction Details: THE FIRM MADE AND ENTERED INTO AN OFFER OF SETTLEMENT,STIPULATION OF FACTS AND CONSENT TO SANCTIONS, PURSUANT TOEXCHANGE RULE 960.7, SOLELY FOR THE PURPOSES OF THESEPROCEEDINGS AND TO SETTLE AND CONCLUDE ALL DISCIPLINARYACTIONS BY THE EXCHANGE BASED ON OR ARISING OUT OF THE FACTSHEREINAFTER STIPULATED. THE FIRM STIPULATES TO THE FACTS,CONSENTS TO THE CONCLUSION OF VIOLATIONS OF CERTAINPROVISIONS OF THE EXCHANGE ACT, AS AMENDED AND EXCHANGERULES, AND CONSENTS TO THE IMPOSITION OF SANCTIONSSPECIFICALLY INCLUDING, BUT NOT LIMITED TO, CONSENTING TO PAYTHE FINE IMPOSED BY THE COMMITTEE CONSISTENT WITH THE OFFER,AND TO COMPLY WITH ALL OTHER SANCTIONS, ALL AS HEREINAFTER SETFORTH, WITHOUT ADMITTING OR DENYING THE ALLEGATIONS ORCONCLUSIONS IN THE STATEMENT OF CHARGES. THE COMMITTEEBELIEVES THAT THE SANCTIONS PROPOSED BY THE FIRM IN ITS OFFERSERVE THE PUBLIC INTEREST, ARE SUFFICIENTLY REMEDIAL UNDER THECIRCUMSTANCES, AND REPRESENT A PROPER DISCHARGE OF THEEXCHANGE'S REGULATORY RESPONSIBILITIES UNDER THE EXCHANGEACT. THE COMMITTEE CONCURS IN THE SANCTIONS CONSENTED TO BYTHE FIRM, AND ORDERS THE IMPOSITION OF THE FOLLOWINGSANCTIONS: A CENSURE AND A TOTAL FINE IN THE AMOUNT OF $250,000,OF WHICH $175,000 SHALL BE PAID TO THE EXCHANGE.



i





Allegations: CME GROUP MARKET REGULATION CONDUCTED A REVIEW OF THEMANUAL ORDER IDENTIFIER ("TAG1028") FOR MESSAGING SUBMITTED BYCREDIT SUISSE SECURITIES (USA) LLC ("CREDIT SUISSE") FOR TRADEDATES JANUARY 1, 2015 THROUGH MARCH 31, 2015. DURING THE COURSEOF THE REVIEW, IT WAS DISCOVERED THAT CREDIT SUISSE HAD 7 TAG 50IDS THAT SUBMITTED MESSAGES TO GLOBEX WITH THE INCORRECT TAG1028 AND WAS THEREFORE IN VIOLATION OF RULE 536.B.1 ("GLOBEXORDER ENTRY").













Resolution:


Sanction Details: THE FIRM IS FINED $2,000


Decision


i


Allegations: SEC ADMIN RELEASE 34-75992/SEPTEMBER 28, 2015: THE SECURITIES ANDEXCHANGE COMMISSION (COMMISSION) DEEMS IT APPROPRIATE AND INTHE PUBLIC INTEREST THAT PUBLIC ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BE, AND HEREBY ARE, INSTITUTED PURSUANT TOSECTIONS 15(B) AND 21C OF THE SECURITIES EXCHANGE ACT OF 1934(EXCHANGE ACT), AGAINST CREDIT SUISSE SECURITIES (USA) LLC. THISACTION RESULTS FROM CREDIT SUISSE'S VIOLATION OF THERECORDKEEPING AND REPORTING REQUIREMENTS OF SECTION 17(A) OFTHE EXCHANGE ACT AND RULES 17A-4(J) AND 17A-25 THEREUNDER. FROMJANUARY 2012 TO JANUARY 2014, CREDIT SUISSE FAILED TO PROVIDEREQUIRED ACCURATE AND COMPLETE BLUE SHEET SUBMISSIONS TO THECOMMISSION, RESULTING IN AT LEAST 593 DEFICIENT BLUE SHEETSUBMISSIONS TO THE COMMISSION BY THE FIRM, THEREBY OMITTINGMORE THAN 553,400 REPORTABLE TRADES REPRESENTING 1.3 BILLIONSHARES. THE TECHNOLOGICAL AND HUMAN ERRORS THAT CAUSEDCREDIT SUISSE'S BLUE SHEET REPORTING FAILURES PERSISTED FOR ANEXTENDED PERIOD DUE IN PART TO CREDIT SUISSE'S SYSTEM FORVALIDATING THE ACCURACY OF ITS BLUE SHEET SUBMISSIONS, WHICHSPREAD THE RESPONSIBILITY FOR OVERSEEING THE ACCURACY ANDCOMPLETENESS OF BLUE SHEET REPORTING ACROSS MULTIPLEDEPARTMENTS IN DIFFERENT GEOGRAPHIC LOCATIONS. FURTHER, THESELECTION OF TESTING CRITERIA TO VALIDATE THE ACCURACY OF BLUESHEET SUBMISSIONS, SUCH AS SAMPLE SIZE, WAS NOT UNIFORM BUT,RATHER, LEFT TO THE DISCRETION OF A FRONT LINE MANAGER. INFEBRUARY 2015, CREDIT SUISSE NOTIFIED THE COMMISSION STAFF THATIT HAD IMPLEMENTED SEVERAL CHANGES TO ENSURE THE ACCURACY OFITS BLUE SHEETS INCLUDING MEASURES DESIGNED TO PREVENT,DETECT, AND CORRECT ANY POSSIBLE BLUE SHEET DATA ERRORS.THESE CHANGES INCLUDED, AMONG OTHER THINGS, INSTALLATION OFCONTROLS DESIGNED TO DETECT INCOMPLETE DATA TRANSFERS ANDTHE IMPLEMENTATION OF ENHANCEMENTS TO ITS VALIDATIONPROCEDURES. ON JUNE 25, 2015, CREDIT SUISSE NOTIFIED THE STAFFTHAT IT HAD DISCOVERED FOUR ADDITIONAL ISSUES THAT IMPACTED 502BLUE SHEET SUBMISSIONS TO THE COMMISSION AND 260 BLUE SHEETSUBMISSIONS TO FINRA. ALL FOUR OF THE ISSUES WERE DISCOVEREDAS A RESULT OF CREDIT SUISSE'S RECENT MODIFICATIONS TO ITS BLUESHEETS REPORTING SYSTEM ARCHITECTURE, CONTROLS, ANDOVERSIGHT. CREDIT SUISSE FAILED TO FURNISH COMPLETE RECORDSTO THE COMMISSION STAFF THAT WERE REQUESTED BY THECOMMISSION STAFF IN ITS BLUE SHEET REQUESTS. CREDIT SUISSEWILLFULLY VIOLATED SECTION 17(A) OF THE EXCHANGE ACT ANDEXCHANGE ACT RULES 17A-4(J) AND 17A-25.














SEC ADMIN RELEASE 34-75992/SEPTEMBER 28, 2015: THE SECURITIES ANDEXCHANGE COMMISSION (COMMISSION) DEEMS IT APPROPRIATE AND INTHE PUBLIC INTEREST THAT PUBLIC ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BE, AND HEREBY ARE, INSTITUTED PURSUANT TOSECTIONS 15(B) AND 21C OF THE SECURITIES EXCHANGE ACT OF 1934(EXCHANGE ACT), AGAINST CREDIT SUISSE SECURITIES (USA) LLC. THISACTION RESULTS FROM CREDIT SUISSE'S VIOLATION OF THERECORDKEEPING AND REPORTING REQUIREMENTS OF SECTION 17(A) OFTHE EXCHANGE ACT AND RULES 17A-4(J) AND 17A-25 THEREUNDER. FROMJANUARY 2012 TO JANUARY 2014, CREDIT SUISSE FAILED TO PROVIDEREQUIRED ACCURATE AND COMPLETE BLUE SHEET SUBMISSIONS TO THECOMMISSION, RESULTING IN AT LEAST 593 DEFICIENT BLUE SHEETSUBMISSIONS TO THE COMMISSION BY THE FIRM, THEREBY OMITTINGMORE THAN 553,400 REPORTABLE TRADES REPRESENTING 1.3 BILLIONSHARES. THE TECHNOLOGICAL AND HUMAN ERRORS THAT CAUSEDCREDIT SUISSE'S BLUE SHEET REPORTING FAILURES PERSISTED FOR ANEXTENDED PERIOD DUE IN PART TO CREDIT SUISSE'S SYSTEM FORVALIDATING THE ACCURACY OF ITS BLUE SHEET SUBMISSIONS, WHICHSPREAD THE RESPONSIBILITY FOR OVERSEEING THE ACCURACY ANDCOMPLETENESS OF BLUE SHEET REPORTING ACROSS MULTIPLEDEPARTMENTS IN DIFFERENT GEOGRAPHIC LOCATIONS. FURTHER, THESELECTION OF TESTING CRITERIA TO VALIDATE THE ACCURACY OF BLUESHEET SUBMISSIONS, SUCH AS SAMPLE SIZE, WAS NOT UNIFORM BUT,RATHER, LEFT TO THE DISCRETION OF A FRONT LINE MANAGER. INFEBRUARY 2015, CREDIT SUISSE NOTIFIED THE COMMISSION STAFF THATIT HAD IMPLEMENTED SEVERAL CHANGES TO ENSURE THE ACCURACY OFITS BLUE SHEETS INCLUDING MEASURES DESIGNED TO PREVENT,DETECT, AND CORRECT ANY POSSIBLE BLUE SHEET DATA ERRORS.THESE CHANGES INCLUDED, AMONG OTHER THINGS, INSTALLATION OFCONTROLS DESIGNED TO DETECT INCOMPLETE DATA TRANSFERS ANDTHE IMPLEMENTATION OF ENHANCEMENTS TO ITS VALIDATIONPROCEDURES. ON JUNE 25, 2015, CREDIT SUISSE NOTIFIED THE STAFFTHAT IT HAD DISCOVERED FOUR ADDITIONAL ISSUES THAT IMPACTED 502BLUE SHEET SUBMISSIONS TO THE COMMISSION AND 260 BLUE SHEETSUBMISSIONS TO FINRA. ALL FOUR OF THE ISSUES WERE DISCOVEREDAS A RESULT OF CREDIT SUISSE'S RECENT MODIFICATIONS TO ITS BLUESHEETS REPORTING SYSTEM ARCHITECTURE, CONTROLS, ANDOVERSIGHT. CREDIT SUISSE FAILED TO FURNISH COMPLETE RECORDSTO THE COMMISSION STAFF THAT WERE REQUESTED BY THECOMMISSION STAFF IN ITS BLUE SHEET REQUESTS. CREDIT SUISSEWILLFULLY VIOLATED SECTION 17(A) OF THE EXCHANGE ACT ANDEXCHANGE ACT RULES 17A-4(J) AND 17A-25.


Resolution:


No


Order







Sanction Details: IN ANTICIPATION OF THE INSTITUTION OF THESE PROCEEDINGS, CREDITSUISSE HAS SUBMITTED AN OFFER OF SETTLEMENT THAT THECOMMISSION HAS DETERMINED TO ACCEPT. CREDIT SUISSE ADMITS THEFACTS SET FORTH, ACKNOWLEDGES THAT ITS CONDUCT VIOLATED THEFEDERAL SECURITIES LAWS, ADMITS THE COMMISSION'S JURISDICTIONOVER IT AND THE SUBJECT MATTER OF THESE PROCEEDINGS, ANDCONSENTS TO THE ENTRY OF THIS ORDER INSTITUTING ADMINISTRATIVEAND CEASE-AND-DESIST PROCEEDINGS PURSUANT TO SECTIONS 15(B)AND 21C OF THE SECURITIES EXCHANGE ACT OF 1934, MAKING FINDINGS,AND IMPOSING REMEDIAL SANCTIONS AND A CEASE-AND-DESIST ORDER.IN DETERMINING TO ACCEPT THE OFFER, THE COMMISSION CONSIDEREDREMEDIAL ACTS UNDERTAKEN BY CREDIT SUISSE AND COOPERATIONAFFORDED THE COMMISSION STAFF. IN VIEW OF THE FOREGOING, THECOMMISSION DEEMS IT APPROPRIATE AND IN THE PUBLIC INTEREST TOIMPOSE THE SANCTIONS AGREED TO IN CREDIT SUISSE'S OFFER.ACCORDINGLY, PURSUANT TO SECTIONS 15(B)(4) AND 21C OF THEEXCHANGE ACT, IT IS HEREBY ORDERED THAT: CREDIT SUISSE SHALLCEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONSAND ANY FUTURE VIOLATIONS OF SECTION 17(A) OF THE EXCHANGE ACTAND RULES 17A-4(J) AND 17A-25 THEREUNDER. CREDIT SUISSE ISCENSURED AND SHALL, WITHIN 10 DAYS OF THE ENTRY OF THIS ORDER,PAY A CIVIL MONEY PENALTY IN THE AMOUNT OF $4.25 MILLION TO THECOMMISSION.



Allegations: SEC ADMIN RELEASE 34-75992/SEPTEMBER 28, 2015: THE SECURITIES ANDEXCHANGE COMMISSION (COMMISSION) DEEMS IT APPROPRIATE AND INTHE PUBLIC INTEREST THAT PUBLIC ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BE, AND HEREBY ARE, INSTITUTED PURSUANT TOSECTIONS 15(B) AND 21C OF THE SECURITIES EXCHANGE ACT OF 1934(EXCHANGE ACT), AGAINST CREDIT SUISSE SECURITIES (USA) LLC. THISACTION RESULTS FROM CREDIT SUISSE'S VIOLATION OF THERECORDKEEPING AND REPORTING REQUIREMENTS OF SECTION 17(A) OFTHE EXCHANGE ACT AND RULES 17A-4(J) AND 17A-25 THEREUNDER. FROMJANUARY 2012 TO JANUARY 2014, CREDIT SUISSE FAILED TO PROVIDEREQUIRED ACCURATE AND COMPLETE BLUE SHEET SUBMISSIONS TO THECOMMISSION, RESULTING IN AT LEAST 593 DEFICIENT BLUE SHEETSUBMISSIONS TO THE COMMISSION BY THE FIRM, THEREBY OMITTINGMORE THAN 553,400 REPORTABLE TRADES REPRESENTING 1.3 BILLIONSHARES. THE TECHNOLOGICAL AND HUMAN ERRORS THAT CAUSEDCREDIT SUISSE'S BLUE SHEET REPORTING FAILURES PERSISTED FOR ANEXTENDED PERIOD DUE IN PART TO CREDIT SUISSE'S SYSTEM FORVALIDATING THE ACCURACY OF ITS BLUE SHEET SUBMISSIONS, WHICHSPREAD THE RESPONSIBILITY FOR OVERSEEING THE ACCURACY ANDCOMPLETENESS OF BLUE SHEET REPORTING ACROSS MULTIPLEDEPARTMENTS IN DIFFERENT GEOGRAPHIC LOCATIONS. FURTHER, THESELECTION OF TESTING CRITERIA TO VALIDATE THE ACCURACY OF BLUESHEET SUBMISSIONS, SUCH AS SAMPLE SIZE, WAS NOT UNIFORM BUT,RATHER, LEFT TO THE DISCRETION OF A FRONT LINE MANAGER. INFEBRUARY 2015, CREDIT SUISSE NOTIFIED THE COMMISSION STAFF THATIT HAD IMPLEMENTED SEVERAL CHANGES TO ENSURE THE ACCURACY OFITS BLUE SHEETS INCLUDING MEASURES DESIGNED TO PREVENT,DETECT, AND CORRECT ANY POSSIBLE BLUE SHEET DATA ERRORS.THESE CHANGES INCLUDED, AMONG OTHER THINGS, INSTALLATION OFCONTROLS DESIGNED TO DETECT INCOMPLETE DATA TRANSFERS ANDTHE IMPLEMENTATION OF ENHANCEMENTS TO ITS VALIDATIONPROCEDURES. ON JUNE 25, 2015, CREDIT SUISSE NOTIFIED THE STAFFTHAT IT HAD DISCOVERED FOUR ADDITIONAL ISSUES THAT IMPACTED 502BLUE SHEET SUBMISSIONS TO THE COMMISSION AND 260 BLUE SHEETSUBMISSIONS TO FINRA. ALL FOUR OF THE ISSUES WERE DISCOVEREDAS A RESULT OF CREDIT SUISSE'S RECENT MODIFICATIONS TO ITS BLUESHEETS REPORTING SYSTEM ARCHITECTURE, CONTROLS, ANDOVERSIGHT. CREDIT SUISSE FAILED TO FURNISH COMPLETE RECORDSTO THE COMMISSION STAFF THAT WERE REQUESTED BY THECOMMISSION STAFF IN ITS BLUE SHEET REQUESTS. CREDIT SUISSEWILLFULLY VIOLATED SECTION 17(A) OF THE EXCHANGE ACT ANDEXCHANGE ACT RULES 17A-4(J) AND 17A-25.














SEC ADMIN RELEASE 34-75992/SEPTEMBER 28, 2015: THE SECURITIES ANDEXCHANGE COMMISSION (COMMISSION) DEEMS IT APPROPRIATE AND INTHE PUBLIC INTEREST THAT PUBLIC ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BE, AND HEREBY ARE, INSTITUTED PURSUANT TOSECTIONS 15(B) AND 21C OF THE SECURITIES EXCHANGE ACT OF 1934(EXCHANGE ACT), AGAINST CREDIT SUISSE SECURITIES (USA) LLC. THISACTION RESULTS FROM CREDIT SUISSE'S VIOLATION OF THERECORDKEEPING AND REPORTING REQUIREMENTS OF SECTION 17(A) OFTHE EXCHANGE ACT AND RULES 17A-4(J) AND 17A-25 THEREUNDER. FROMJANUARY 2012 TO JANUARY 2014, CREDIT SUISSE FAILED TO PROVIDEREQUIRED ACCURATE AND COMPLETE BLUE SHEET SUBMISSIONS TO THECOMMISSION, RESULTING IN AT LEAST 593 DEFICIENT BLUE SHEETSUBMISSIONS TO THE COMMISSION BY THE FIRM, THEREBY OMITTINGMORE THAN 553,400 REPORTABLE TRADES REPRESENTING 1.3 BILLIONSHARES. THE TECHNOLOGICAL AND HUMAN ERRORS THAT CAUSEDCREDIT SUISSE'S BLUE SHEET REPORTING FAILURES PERSISTED FOR ANEXTENDED PERIOD DUE IN PART TO CREDIT SUISSE'S SYSTEM FORVALIDATING THE ACCURACY OF ITS BLUE SHEET SUBMISSIONS, WHICHSPREAD THE RESPONSIBILITY FOR OVERSEEING THE ACCURACY ANDCOMPLETENESS OF BLUE SHEET REPORTING ACROSS MULTIPLEDEPARTMENTS IN DIFFERENT GEOGRAPHIC LOCATIONS. FURTHER, THESELECTION OF TESTING CRITERIA TO VALIDATE THE ACCURACY OF BLUESHEET SUBMISSIONS, SUCH AS SAMPLE SIZE, WAS NOT UNIFORM BUT,RATHER, LEFT TO THE DISCRETION OF A FRONT LINE MANAGER. INFEBRUARY 2015, CREDIT SUISSE NOTIFIED THE COMMISSION STAFF THATIT HAD IMPLEMENTED SEVERAL CHANGES TO ENSURE THE ACCURACY OFITS BLUE SHEETS INCLUDING MEASURES DESIGNED TO PREVENT,DETECT, AND CORRECT ANY POSSIBLE BLUE SHEET DATA ERRORS.THESE CHANGES INCLUDED, AMONG OTHER THINGS, INSTALLATION OFCONTROLS DESIGNED TO DETECT INCOMPLETE DATA TRANSFERS ANDTHE IMPLEMENTATION OF ENHANCEMENTS TO ITS VALIDATIONPROCEDURES. ON JUNE 25, 2015, CREDIT SUISSE NOTIFIED THE STAFFTHAT IT HAD DISCOVERED FOUR ADDITIONAL ISSUES THAT IMPACTED 502BLUE SHEET SUBMISSIONS TO THE COMMISSION AND 260 BLUE SHEETSUBMISSIONS TO FINRA. ALL FOUR OF THE ISSUES WERE DISCOVEREDAS A RESULT OF CREDIT SUISSE'S RECENT MODIFICATIONS TO ITS BLUESHEETS REPORTING SYSTEM ARCHITECTURE, CONTROLS, ANDOVERSIGHT. CREDIT SUISSE FAILED TO FURNISH COMPLETE RECORDSTO THE COMMISSION STAFF THAT WERE REQUESTED BY THECOMMISSION STAFF IN ITS BLUE SHEET REQUESTS. CREDIT SUISSEWILLFULLY VIOLATED SECTION 17(A) OF THE EXCHANGE ACT ANDEXCHANGE ACT RULES 17A-4(J) AND 17A-25.


Resolution:


Order







Sanction Details: IN ANTICIPATION OF THE INSTITUTION OF THESE PROCEEDINGS, CREDITSUISSE HAS SUBMITTED AN OFFER OF SETTLEMENT THAT THECOMMISSION HAS DETERMINED TO ACCEPT. CREDIT SUISSE ADMITS THEFACTS SET FORTH, ACKNOWLEDGES THAT ITS CONDUCT VIOLATED THEFEDERAL SECURITIES LAWS, ADMITS THE COMMISSION'S JURISDICTIONOVER IT AND THE SUBJECT MATTER OF THESE PROCEEDINGS, ANDCONSENTS TO THE ENTRY OF THIS ORDER INSTITUTING ADMINISTRATIVEAND CEASE-AND-DESIST PROCEEDINGS PURSUANT TO SECTIONS 15(B)AND 21C OF THE SECURITIES EXCHANGE ACT OF 1934, MAKING FINDINGS,AND IMPOSING REMEDIAL SANCTIONS AND A CEASE-AND-DESIST ORDER.IN DETERMINING TO ACCEPT THE OFFER, THE COMMISSION CONSIDEREDREMEDIAL ACTS UNDERTAKEN BY CREDIT SUISSE AND COOPERATIONAFFORDED THE COMMISSION STAFF. IN VIEW OF THE FOREGOING, THECOMMISSION DEEMS IT APPROPRIATE AND IN THE PUBLIC INTEREST TOIMPOSE THE SANCTIONS AGREED TO IN CREDIT SUISSE'S OFFER.ACCORDINGLY, PURSUANT TO SECTIONS 15(B)(4) AND 21C OF THEEXCHANGE ACT, IT IS HEREBY ORDERED THAT: CREDIT SUISSE SHALLCEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONSAND ANY FUTURE VIOLATIONS OF SECTION 17(A) OF THE EXCHANGE ACTAND RULES 17A-4(J) AND 17A-25 THEREUNDER. CREDIT SUISSE ISCENSURED AND SHALL, WITHIN 10 DAYS OF THE ENTRY OF THIS ORDER,PAY A CIVIL MONEY PENALTY IN THE AMOUNT OF $4.25 MILLION TO THECOMMISSION.

Firm Statement ON SEPTEMBER 28, 2015, CREDIT SUISSE SECURITIES (USA) LLCREACHED A SETTLEMENT WITH THE SEC THAT RESOLVES ANINVESTIGATION BY THE COMMISSION RELATING TO CREDIT SUISSE'SBLUE SHEET SUBMISSIONS. THE SEC ISSUED AN ADMINISTRATIVE ORDERFINDING THAT CREDIT SUISSE VIOLATED CERTAIN BOOKS AND RECORDSRULES. AS PART OF THE SETTLEMENT, CREDIT SUISSE AGREED TO PAY A$4.25 MILLION PENALTY, TO BE CENSURED, TO ADMIT TO VIOLATINGCERTAIN BOOKS AND RECORDS PROVISIONS, AND TO CEASE AND DESISTFROM COMMITTING OR CAUSING SUCH VIOLATIONS.



i


Allegations: A HEARING OFFICER AT FINRA CONSIDERED A STIPULATION OF FACTSAND CONSENT TO PENALTY ENTERED INTO BETWEEN FINRA'SDEPARTMENT OF MARKET REGULATION ON BEHALF OF NYSEREGULATION, INC. AND CREDIT SUISSE SECURITIES (USA) LLC, A MEMBERORGANIZATION OF NYSE MKT LLC (NYSE MKT). THE STIPULATION OFFACTS AND CONSENT TO PENALTY WAS SUBMITTED FOR THE SOLEPURPOSE OF SETTLING THIS DISCIPLINARY PROCEEDING, WITHOUTADJUDICATION OF ANY ISSUES OF LAW OR FACT, AND WITHOUTADMITTING OR DENYING ANY ALLEGATIONS OR FINDINGS REFERRED TOTHEREIN. THE HEARING OFFICER ACCEPTS THE STIPULATION OF FACTSAND CONSENT TO PENALTY AND ISSUES THIS DECISION IN ACCORDANCEWITH NYSE MKT RULES. BY LETTER DATED OCTOBER 29, 2013, WHICH THEFIRM RECEIVED, MARKET REGULATION NOTIFIED THE FIRM THAT IT WASINVESTIGATING WHETHER THE FIRM HAD VIOLATED SEC RULE 15C3-5 ANDEXCHANGE RULE 320(E) BY TRANSMITTING EXCESSIVE ORDERS ORQUOTATIONS TO NYSE MKT, AND BY FAILING TO IMPLEMENT ANDMAINTAIN RISK MANAGEMENT CONTROLS AND SUPERVISORYPROCEDURES, INCLUDING PRE-ORDER CONTROLS, REASONABLYDESIGNED TO PREVENT THE TRANSMISSION OF EXCESSIVE ORDERS ORQUOTATIONS TO NYSE MKT, AND FAILING TO SUPERVISE THE FIRM'SFORMER AUTOMATED MARKET MAKING DESK (AMM DESK) TO ENSURETHAT IT DID NOT TRANSMIT EXCESSIVE ORDERS AND QUOTATIONS TONYSE MKT.







Initiated By: NYSE MKT LLC


Other


N/A







Resolution:


No


Decision








Regulator Statement INCLUDES CASE #20120335476CREDIT SUISSE SECURITIES (USA) LLC VIOLATED RULES 15C3-5(B) AND(C)(2) AND EXCHANGE RULE 320(E) BY FAILING TO IMPLEMENT ANDMAINTAIN AN ADEQUATE SYSTEM OF RISK MANAGEMENT CONTROLS ANDSUPERVISORY PROCEDURES, INCLUDING PRE-ORDER CONTROLS AND ASYSTEM OF FOLLOW-UP AND REVIEW, REASONABLY DESIGNED TO:PREVENT THE ENTRY OR TRANSMISSION OF EXCESSIVE ORDERS ORQUOTATIONS TO NYSE MKT; ADEQUATELY SUPERVISE THE DEPLOYMENTAND OPERATION OF ITS PROPRIETARY ALGORITHM AND DOCUMENT THETESTING OF THE ALGORITHM CONSISTENT WITH THE FIRM'S WSPS; ANDBY FAILING TO ADOPT AND IMPLEMENT A SUPERVISORY SYSTEMREASONABLY DESIGNED TO ADDRESS COMPLIANCE WITH SEC RULE15C3-5.UNDER THE STIPULATION OF FACTS AND CONSENT TO PENALTY, CREDITSUISSE SECURITIES (USA) LLC AGREED TO PAY A TOTAL FINE OF $250,000,OF WHICH $25,000 SHALL BE PAID TO NYSE MKT. THE REMAINING AMOUNTSHALL BE PAID TO NYSE ARCA, INC.; NASDAQ OPTIONS MARKET LLC, ANDNASDAQ OMX PHLX LLC IN ACCORDANCE WITH THE TERMS OF PARALLELSETTLEMENT AGREEMENTS IN RELATED MATTERS BETWEEN CREDITSUISSE SECURITIES (USA) LLC AND EACH OF THESE SELF-REGULATORYORGANIZATIONS.THE DECISION BECAME FINAL AT THE CLOSE OF BUSINESS ON OCTOBER21, 2015.

















A HEARING OFFICER AT FINRA CONSIDERED A STIPULATION OF FACTSAND CONSENT TO PENALTY ENTERED INTO BETWEEN FINRA'SDEPARTMENT OF MARKET REGULATION ON BEHALF OF NYSEREGULATION, INC. AND CREDIT SUISSE SECURITIES (USA) LLC, A MEMBERORGANIZATION OF NYSE MKT LLC (NYSE MKT). THE STIPULATION OFFACTS AND CONSENT TO PENALTY WAS SUBMITTED FOR THE SOLEPURPOSE OF SETTLING THIS DISCIPLINARY PROCEEDING, WITHOUTADJUDICATION OF ANY ISSUES OF LAW OR FACT, AND WITHOUTADMITTING OR DENYING ANY ALLEGATIONS OR FINDINGS REFERRED TOTHEREIN. THE HEARING OFFICER ACCEPTS THE STIPULATION OF FACTSAND CONSENT TO PENALTY AND ISSUES THIS DECISION IN ACCORDANCEWITH NYSE MKT RULES. BY LETTER DATED OCTOBER 29, 2013, WHICH THEFIRM RECEIVED, MARKET REGULATION NOTIFIED THE FIRM THAT IT WASINVESTIGATING WHETHER THE FIRM HAD VIOLATED SEC RULE 15C3-5 ANDEXCHANGE RULE 320(E) BY TRANSMITTING EXCESSIVE ORDERS ORQUOTATIONS TO NYSE MKT, AND BY FAILING TO IMPLEMENT ANDMAINTAIN RISK MANAGEMENT CONTROLS AND SUPERVISORYPROCEDURES, INCLUDING PRE-ORDER CONTROLS, REASONABLYDESIGNED TO PREVENT THE TRANSMISSION OF EXCESSIVE ORDERS ORQUOTATIONS TO NYSE MKT, AND FAILING TO SUPERVISE THE FIRM'SFORMER AUTOMATED MARKET MAKING DESK (AMM DESK) TO ENSURETHAT IT DID NOT TRANSMIT EXCESSIVE ORDERS AND QUOTATIONS TONYSE MKT.


Resolution:



Firm Statement INCLUDES CASE #20120335476 CREDIT SUISSE SECURITIES (USA) LLCVIOLATED RULES 15C3-5(B) AND (C)(2) AND EXCHANGE RULE 320(E) BYFAILING TO IMPLEMENT AND MAINTAIN AN ADEQUATE SYSTEM OF RISKMANAGEMENT CONTROLS AND SUPERVISORY PROCEDURES, INCLUDINGPRE-ORDER CONTROLS AND A SYSTEM OF FOLLOW-UP AND REVIEW,REASONABLY DESIGNED TO: PREVENT THE ENTRY OR TRANSMISSION OFEXCESSIVE ORDERS OR QUOTATIONS TO NYSE MKT; ADEQUATELYSUPERVISE THE DEPLOYMENT AND OPERATION OF ITS PROPRIETARYALGORITHM AND DOCUMENT THE TESTING OF THE ALGORITHMCONSISTENT WITH THE FIRM'S WSPS; AND BY FAILING TO ADOPT ANDIMPLEMENT A SUPERVISORY SYSTEM REASONABLY DESIGNED TOADDRESS COMPLIANCE WITH SEC RULE 15C3-5. UNDER THE STIPULATIONOF FACTS AND CONSENT TO PENALTY, CREDIT SUISSE SECURITIES (USA)LLC AGREED TO PAY A TOTAL FINE OF $250,000, OF WHICH $25,000 SHALLBE PAID TO NYSE MKT. THE REMAINING AMOUNT SHALL BE PAID TO NYSEARCA, INC.; NASDAQ OPTIONS MARKET LLC, AND NASDAQ OMX PHLX LLCIN ACCORDANCE WITH THE TERMS OF PARALLEL SETTLEMENTAGREEMENTS IN RELATED MATTERS BETWEEN CREDIT SUISSESECURITIES (USA) LLC AND EACH OF THESE SELF-REGULATORYORGANIZATIONS. IF NO FURTHER ACTION IS TAKEN THE DECISION WILLBECOME FINAL AT THE CLOSE OF BUSINESS ON OCTOBER 13, 2015.


Decision






INCLUDES CASE #20120335476 CREDIT SUISSE SECURITIES (USA) LLCVIOLATED RULES 15C3-5(B) AND (C)(2) AND EXCHANGE RULE 320(E) BYFAILING TO IMPLEMENT AND MAINTAIN AN ADEQUATE SYSTEM OF RISKMANAGEMENT CONTROLS AND SUPERVISORY PROCEDURES, INCLUDINGPRE-ORDER CONTROLS AND A SYSTEM OF FOLLOW-UP AND REVIEW,REASONABLY DESIGNED TO: PREVENT THE ENTRY OR TRANSMISSION OFEXCESSIVE ORDERS OR QUOTATIONS TO NYSE MKT; ADEQUATELYSUPERVISE THE DEPLOYMENT AND OPERATION OF ITS PROPRIETARYALGORITHM AND DOCUMENT THE TESTING OF THE ALGORITHMCONSISTENT WITH THE FIRM'S WSPS; AND BY FAILING TO ADOPT ANDIMPLEMENT A SUPERVISORY SYSTEM REASONABLY DESIGNED TOADDRESS COMPLIANCE WITH SEC RULE 15C3-5. UNDER THE STIPULATIONOF FACTS AND CONSENT TO PENALTY, CREDIT SUISSE SECURITIES (USA)LLC AGREED TO PAY A TOTAL FINE OF $250,000, OF WHICH $25,000 SHALLBE PAID TO NYSE MKT. THE REMAINING AMOUNT SHALL BE PAID TO NYSEARCA, INC.; NASDAQ OPTIONS MARKET LLC, AND NASDAQ OMX PHLX LLCIN ACCORDANCE WITH THE TERMS OF PARALLEL SETTLEMENTAGREEMENTS IN RELATED MATTERS BETWEEN CREDIT SUISSESECURITIES (USA) LLC AND EACH OF THESE SELF-REGULATORYORGANIZATIONS. IF NO FURTHER ACTION IS TAKEN THE DECISION WILLBECOME FINAL AT THE CLOSE OF BUSINESS ON OCTOBER 13, 2015.


i







Allegations: A HEARING OFFICER AT FINRA CONSIDERED AN OFFER OF SETTLEMENTAND CONSENT ENTERED INTO BETWEEN FINRA'S DEPARTMENT OFMARKET REGULATION ON BEHALF OF NYSE REGULATION, INC. ANDCREDIT SUISSE SECURITIES (USA) LLC. THE OFFER OF SETTLEMENT ANDCONSENT WAS SUBMITTED FOR THE SOLE PURPOSE OF SETTLING THISDISCIPLINARY PROCEEDING, WITHOUT ADJUDICATION OF ANY ISSUES OFLAW OR FACT, AND WITHOUT ADMITTING OR DENYING ANY ALLEGATIONSOR FINDINGS REFERRED TO THEREIN. THE HEARING OFFICER ACCEPTSTHE OFFER OF SETTLEMENT AND CONSENT AND ISSUES THIS DECISIONIN ACCORDANCE WITH NYSE ARCA OPTIONS RULES. BY LETTER DATEDOCTOBER 29, 2013, WHICH THE FIRM RECEIVED, MARKET REGULATIONNOTIFIED THE FIRM THAT IT WAS INVESTIGATING WHETHER THE FIRMHAD VIOLATED SEC RULE 15C3-5 AND NYSE ARCA OPTIONS RULE 11.18 BYTRANSMITTING EXCESSIVE ORDERS OR QUOTATIONS TO THE NYSE ARCAOPTIONS MARKET; FAILING TO IMPLEMENT AND MAINTAIN RISKMANAGEMENT CONTROLS AND SUPERVISORY PROCEDURES, INCLUDINGPRE-ORDER CONTROLS, THAT WERE REASONABLY DESIGNED TOPREVENT THE TRANSMISSION OF EXCESSIVE ORDERS OR QUOTATIONSTO NYSE ARCA OPTIONS; AND FAILING TO SUPERVISE THE FIRM'SFORMER AUTOMATED MARKET MAKING DESK (AMM DESK) TO ENSURETHAT IT DID NOT TRANSMIT EXCESSIVE ORDERS OR QUOTATIONS TONYSE ARCA OPTIONS.








Other


N/A



Resolution:



Regulator Statement THIS MATTER INCLUDES CASE #20120335476CREDIT SUISSE SECURITIES (USA) LLC VIOLATED SEC RULES 15C3-5(B)AND (C)(2) AND NYSE ARCA OPTIONS RULES 11.18(B) AND (C) BY FAILINGTO IMPLEMENT AND MAINTAIN AN ADEQUATE SYSTEM OF RISKMANAGEMENT CONTROLS AND SUPERVISORY PROCEDURES, INCLUDINGPRE-ORDER CONTROLS AND A SYSTEM OF FOLLOW-UP AND REVIEW,REASONABLY DESIGNED TO: PREVENT THE TRANSMISSION OFEXCESSIVE ORDERS OR QUOTATIONS; AND ADEQUATELY SUPERVISE THEDEPLOYMENT AND OPERATION OF ITS ALGORITHM AND DOCUMENT THETESTING OF THE ALGORITHM CONSISTENT WITH THE FIRM'S WSPS; ANDBY FAILING TO ADOPT AND IMPLEMENT A SUPERVISORY SYSTEMREASONABLY DESIGNED TO ADDRESS COMPLIANCE WITH SEC RULE15C3-5.UNDER THE OFFER OF SETTLEMENT AND CONSENT CREDIT SUISSESECURITIES (USA) LLC AGREED TO PAY A TOTAL FINE OF $250,000, OFWHICH $25,000 SHALL BE PAID TO NYSE ARCA AND THE REMAININGAMOUNT SHALL BE PAID TO NYSE MKT LLC; NASDAQ OPTIONS MARKETLLC; AND NASDAQ OMX PI-ILX LLC IN ACCORDANCE WITH THE TERMS OFPARALLEL SETTLEMENT AGREEMENTS IN RELATED MATTERS BETWEENCREDIT SUISSE SECURITIES (USA) LLC AND EACH OF THESE SELF-REGULATORY ORGANIZATIONS.


No


Decision

iReporting Source:














Allegations: A HEARING OFFICER AT FINRA CONSIDERED AN OFFER OF SETTLEMENTAND CONSENT ENTERED INTO BETWEEN FINRA'S DEPARTMENT OFMARKET REGULATION ON BEHALF OF NYSE REGULATION, INC. ANDCREDIT SUISSE SECURITIES (USA) LLC. THE OFFER OF SETTLEMENT ANDCONSENT WAS SUBMITTED FOR THE SOLE PURPOSE OF SETTLING THISDISCIPLINARY PROCEEDING, WITHOUT ADJUDICATION OF ANY ISSUES OFLAW OR FACT, AND WITHOUT ADMITTING OR DENYING ANY ALLEGATIONSOR FINDINGS REFERRED TO THEREIN. THE HEARING OFFICER ACCEPTSTHE OFFER OF SETTLEMENT AND CONSENT AND ISSUES THIS DECISIONIN ACCORDANCE WITH NYSE ARCA OPTIONS RULES. BY LETTER DATEDOCTOBER 29, 2013, WHICH THE FIRM RECEIVED, MARKET REGULATIONNOTIFIED THE FIRM THAT IT WAS INVESTIGATING WHETHER THE FIRMHAD VIOLATED SEC RULE 15C3-5 AND NYSE ARCA OPTIONS RULE 11.18 BYTRANSMITTING EXCESSIVE ORDERS OR QUOTATIONS TO THE NYSE ARCAOPTIONS MARKET; FAILING TO IMPLEMENT AND MAINTAIN RISKMANAGEMENT CONTROLS AND SUPERVISORY PROCEDURES, INCLUDINGPRE-ORDER CONTROLS, THAT WERE REASONABLY DESIGNED TOPREVENT THE TRANSMISSION OF EXCESSIVE ORDERS OR QUOTATIONSTO NYSE ARCA OPTIONS; AND FAILING TO SUPERVISE THE FIRM'SFORMER AUTOMATED MARKET MAKING DESK (AMM DESK) TO ENSURETHAT IT DID NOT TRANSMIT EXCESSIVE ORDERS OR QUOTATIONS TONYSE ARCA OPTIONS.



Resolution:



Decision







Firm Statement THIS MATTER INCLUDES CASE #20120335476 CREDIT SUISSE SECURITIES(USA) LLC VIOLATED SEC RULES 15C3-5(B) AND (C)(2) AND NYSE ARCAOPTIONS RULES 11.18(B) AND (C) BY FAILING TO IMPLEMENT ANDMAINTAIN AN ADEQUATE SYSTEM OF RISK MANAGEMENT CONTROLS ANDSUPERVISORY PROCEDURES, INCLUDING PRE-ORDER CONTROLS AND ASYSTEM OF FOLLOW-UP AND REVIEW, REASONABLY DESIGNED TO:PREVENT THE TRANSMISSION OF EXCESSIVE ORDERS OR QUOTATIONS;AND ADEQUATELY SUPERVISE THE DEPLOYMENT AND OPERATION OF ITSALGORITHM AND DOCUMENT THE TESTING OF THE ALGORITHMCONSISTENT WITH THE FIRM'S WSPS; AND BY FAILING TO ADOPT ANDIMPLEMENT A SUPERVISORY SYSTEM REASONABLY DESIGNED TOADDRESS COMPLIANCE WITH SEC RULE 15C3-5. UNDER THE OFFER OFSETTLEMENT AND CONSENT CREDIT SUISSE SECURITIES (USA) LLCAGREED TO PAY A TOTAL FINE OF $250,000, OF WHICH $25,000 SHALL BEPAID TO NYSE ARCA AND THE REMAINING AMOUNT SHALL BE PAID TONYSE MKT LLC; NASDAQ OPTIONS MARKET LLC; AND NASDAQ OMX PI-ILXLLC IN ACCORDANCE WITH THE TERMS OF PARALLEL SETTLEMENTAGREEMENTS IN RELATED MATTERS BETWEEN CREDIT SUISSESECURITIES (USA) LLC AND EACH OF THESE SELF-REGULATORYORGANIZATIONS.


i





Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT DURINGREVIEW PERIODS FOR THE FIRM'S COMPLIANCE WITH SEC RULE 604 OFREGULATION NMS, IT WAS FOUND THAT THE FIRM FAILED TO DISPLAYIMMEDIATELY CUSTOMER LIMIT ORDERS IN ITS PUBLIC QUOTATION, WHENEACH SUCH ORDER WAS AT A PRICE THAT WOULD HAVE IMPROVED THEFIRM'S BID OR OFFER IN EACH SUCH SECURITY; OR WHEN THE ORDERWAS PRICED EQUAL TO THE FIRM'S BID OR OFFER AND THE NATIONALBEST BID OR OFFER FOR EACH SUCH SECURITY, AND THE SIZE OF THEORDER REPRESENTED MORE THAN A DE MINIMIS CHANGE IN RELATIONTO THE SIZE ASSOCIATED WITH THE FIRM'S BID OR OFFER IN EACH SUCHSECURITY. THE CONDUCT CONSTITUTES SEPARATE AND DISTINCTVIOLATIONS OF SEC RULE 604 OF REGULATION NMS.













Resolution:




No







Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT DURINGREVIEW PERIODS FOR THE FIRM'S COMPLIANCE WITH SEC RULE 604 OFREGULATION NMS, IT WAS FOUND THAT THE FIRM FAILED TO DISPLAYIMMEDIATELY CUSTOMER LIMIT ORDERS IN ITS PUBLIC QUOTATION, WHENEACH SUCH ORDER WAS AT A PRICE THAT WOULD HAVE IMPROVED THEFIRM'S BID OR OFFER IN EACH SUCH SECURITY; OR WHEN THE ORDERWAS PRICED EQUAL TO THE FIRM'S BID OR OFFER AND THE NATIONALBEST BID OR OFFER FOR EACH SUCH SECURITY, AND THE SIZE OF THEORDER REPRESENTED MORE THAN A DE MINIMIS CHANGE IN RELATIONTO THE SIZE ASSOCIATED WITH THE FIRM'S BID OR OFFER IN EACH SUCHSECURITY. THE CONDUCT CONSTITUTES SEPARATE AND DISTINCTVIOLATIONS OF SEC RULE 604 OF REGULATION NMS.














Resolution:






i






Docket/Case Number: 2015-404B-029


Other Product Type(s): INDEX END OF DAY PRICES

Allegations: ICE CLEAR CREDIT DETERMINED THAT CSSU FAILED TO SUBMIT 19 INDEXEND-OF-DAY PRICES ON JUNE 15, 2015, IN VIOLATION OF ICE CLEARCREDIT RULE 404(B).



Resolution:


Decision







Sanction Details: THE FIRM IS FINED $19,000.00


i


Initiated By: FINRA







Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED ON2,040 OCCASIONS TO PROVIDE WRITTEN NOTIFICATION DISCLOSING TOITS CUSTOMER ITS CORRECT CAPACITY IN THE TRANSACTION. THEFINDINGS STATED THAT THE FIRM TRANSMITTED REPORTS TO ORDERAUDIT TRAIL SYSTEM (OATS) THAT CONTAINED INACCURATE,INCOMPLETE, OR IMPROPERLY FORMATTED DATA.



Resolution:


Sanction Details: THE FIRM WAS CENSURED AND FINED $22,500.FINE PAID IN FULL ON AUGUST 11, 2015.


No










Initiated By: FINRA







Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED ON2,040 OCCASIONS TO PROVIDE WRITTEN NOTIFICATION DISCLOSING TOITS CUSTOMER ITS CORRECT CAPACITY IN THE TRANSACTION. THEFINDINGS STATED THAT THE FIRM TRANSMITTED REPORTS TO ORDERAUDIT TRAIL SYSTEM (OATS) THAT CONTAINED INACCURATE,INCOMPLETE, OR IMPROPERLY FORMATTED DATA.



Resolution:






i


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT CAUSED AMEMBER ASSOCIATED WITH THE FIRM TO EFFECT TRANSACTIONS, ONTHE NYSE FLOOR, FOR AN ACCOUNT IN WHICH THE FIRM HAD ANINTEREST, AND SUCH MEMBER FAILED TO YIELD PRIORITY, PARITY ANDPRECEDENCE IN THE EXECUTION OF ORDERS FOR AN ACCOUNT OFPERSONS WHO ARE NOT MEMBERS OR ASSOCIATED WITH MEMBERS OFTHE NYSE. THE FINDINGS STATED THAT THE FIRM ALLOWEDPROPRIETARY ORDERS TO BE TRANSMITTED TO THE NYSE FLOORWITHOUT BEING IDENTIFIED IN A MANNER THAT WOULD ENABLE THEORDERS TO BE HANDLED PROPERLY PURSUANT TO THE REQUIREMENTSOF EXCHANGE ACT 11(A)(1)(G). AS A RESULT OF ITS CONDUCT, THE FIRMVIOLATED SECTION 11(A) OF THE EXCHANGE ACT, NYSE RULE 90(A), ANDNYSE RULE 410(B).















WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT CAUSED AMEMBER ASSOCIATED WITH THE FIRM TO EFFECT TRANSACTIONS, ONTHE NYSE FLOOR, FOR AN ACCOUNT IN WHICH THE FIRM HAD ANINTEREST, AND SUCH MEMBER FAILED TO YIELD PRIORITY, PARITY ANDPRECEDENCE IN THE EXECUTION OF ORDERS FOR AN ACCOUNT OFPERSONS WHO ARE NOT MEMBERS OR ASSOCIATED WITH MEMBERS OFTHE NYSE. THE FINDINGS STATED THAT THE FIRM ALLOWEDPROPRIETARY ORDERS TO BE TRANSMITTED TO THE NYSE FLOORWITHOUT BEING IDENTIFIED IN A MANNER THAT WOULD ENABLE THEORDERS TO BE HANDLED PROPERLY PURSUANT TO THE REQUIREMENTSOF EXCHANGE ACT 11(A)(1)(G). AS A RESULT OF ITS CONDUCT, THE FIRMVIOLATED SECTION 11(A) OF THE EXCHANGE ACT, NYSE RULE 90(A), ANDNYSE RULE 410(B).


Resolution:




No




Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT CAUSED AMEMBER ASSOCIATED WITH THE FIRM TO EFFECT TRANSACTIONS, ONTHE NYSE FLOOR, FOR AN ACCOUNT IN WHICH THE FIRM HAD ANINTEREST, AND SUCH MEMBER FAILED TO YIELD PRIORITY, PARITY ANDPRECEDENCE IN THE EXECUTION OF ORDERS FOR AN ACCOUNT OFPERSONS WHO ARE NOT MEMBERS OR ASSOCIATED WITH MEMBERS OFTHE NYSE. THE FINDINGS STATED THAT THE FIRM ALLOWEDPROPRIETARY ORDERS TO BE TRANSMITTED TO THE NYSE FLOORWITHOUT BEING IDENTIFIED IN A MANNER THAT WOULD ENABLE THEORDERS TO BE HANDLED PROPERLY PURSUANT TO THE REQUIREMENTSOF EXCHANGE ACT 11(A)(1)(G). AS A RESULT OF ITS CONDUCT, THE FIRMVIOLATED SECTION 11(A) OF THE EXCHANGE ACT, NYSE RULE 90(A), ANDNYSE RULE 410(B).














WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT CAUSED AMEMBER ASSOCIATED WITH THE FIRM TO EFFECT TRANSACTIONS, ONTHE NYSE FLOOR, FOR AN ACCOUNT IN WHICH THE FIRM HAD ANINTEREST, AND SUCH MEMBER FAILED TO YIELD PRIORITY, PARITY ANDPRECEDENCE IN THE EXECUTION OF ORDERS FOR AN ACCOUNT OFPERSONS WHO ARE NOT MEMBERS OR ASSOCIATED WITH MEMBERS OFTHE NYSE. THE FINDINGS STATED THAT THE FIRM ALLOWEDPROPRIETARY ORDERS TO BE TRANSMITTED TO THE NYSE FLOORWITHOUT BEING IDENTIFIED IN A MANNER THAT WOULD ENABLE THEORDERS TO BE HANDLED PROPERLY PURSUANT TO THE REQUIREMENTSOF EXCHANGE ACT 11(A)(1)(G). AS A RESULT OF ITS CONDUCT, THE FIRMVIOLATED SECTION 11(A) OF THE EXCHANGE ACT, NYSE RULE 90(A), ANDNYSE RULE 410(B).


Resolution:






i


Initiated By: ICE FUTURES U.S., INC.


Allegations: CREDIT SUISSE ALLEGEDLY VIOLATED EXCHANGE RULE 27.12A BY FAILINGTO PROVIDE ELECTRONIC AUDIT TRAIL DATA CORRESPONDING TO TWOORDERS THAT WERE ENTERED ONTO ICE'S ELECTRONIC TRADE SYSTEMIN DECEMBER 2013.










Docket/Case Number: CASE NO. 2013-051




Resolution:


Sanction Details: CREDIT SUISSE WAS FINED $5000.00


Decision


i




Allegations: A HEARING OFFICER AT FINRA CONSIDERED AN OFFER OF SETTLEMENTAND CONSENT ENTERED INTO BETWEEN FINRA'S DEPARTMENT OFMARKET REGULATION ON BEHALF OF NYSE REGULATION, INC. AND THEFIRM. THE OFFER OF SETTLEMENT AND CONSENT WAS SUBMITTED FORTHE SOLE PURPOSE OF SETTLING THIS DISCIPLINARY PROCEEDING,WITHOUT ADJUDICATION OF ANY ISSUES OF LAW OR FACT, AND WITHOUTADMITTING OR DENYING ANY ALLEGATIONS OR FINDINGS REFERRED TOTHEREIN. THE HEARING OFFICER ACCEPTS THE OFFER OF SETTLEMENTAND CONSENT AND ISSUES THIS DECISION IN ACCORDANCE WITH NYSEARCA EQUITIES RULES. FROM APRIL 2006 THROUGH MAY 20, 2013, THEFIRM ENTERED APPROXIMATELY 67.5 MILLION ORDERS INTO THE NYSEARCA MARKETPLACE THAT FAILED TO INDICATE THE CORRECT CAPACITY.THIS CONDUCT VIOLATED NYSE ARCA EQUITIES RULE 7.33. BETWEENAPRIL 2006 AND MAY 20, 2013, THE FIRM FAILED TO ESTABLISH ANDMAINTAIN A SUPERVISORY SYSTEM THAT WAS REASONABLY DESIGNEDTO ENSURE SUBMISSION OF ACCURATE CAPACITY CODES INTO THE NYSEARCA MARKETPLACE. THIS CONDUCT VIOLATED NYSE ARCA EQUITIESRULE 6.18(B).








Other


N/A






Resolution:



Regulator Statement BETWEEN APRIL 2006 AND MAY 20, 2013, THE FIRM VIOLATED NYSE ARCAEQUITIES RULE 7.33, BY FAILING TO POPULATE APPROXIMATELY 67.5MILLION ORDERS WITH THE CORRECT CAPACITY CODE, AND NYSE ARCAEQUITIES RULE 6.18(B), BY FAILING TO ESTABLISH AND MAINTAIN ASUPERVISORY SYSTEM THAT WAS REASONABLY DESIGNED TO ENSURETHE SUBMISSION OF ACCURATE CAPACITY CODES. IN DETERMINING TORESOLVE THIS MATTER ON THE BASIS SET FORTH IN THE OFFER OFSETTLEMENT AND CONSENT, FINRA TOOK THE FOLLOWING FACTORSINTO CONSIDERATION: (I) NO MARKET IMPACT OR HARM TO OTHERMARKET PARTICIPANTS OR CUSTOMERS RESULTED FROM THE FIRM'SVIOLATIONS, (II) THE FIRM ENHANCED ITS SYSTEMS AND SUPERVISORYPROCEDURES TO ENSURE CORRECT MARKING OF ITS ORDERS SENT TOTHE NYSE ARCA MARKETPLACE PROMPTLY UPON NOTICE FROM FINRATHAT IT HAD NOT PROPERLY CODED ITS NYSE ARCA EQUITIES ORDERS,AND (III) THE FIRM'S COOPERATION IN IDENTIFYING THE COMPLETEDURATION OF THE CONDUCT AND QUANTIFYING THE ENTIRE SCOPE OFAFFECTED ORDERS.


No


Decision














Allegations: A HEARING OFFICER AT FINRA CONSIDERED AN OFFER OF SETTLEMENTAND CONSENT ENTERED INTO BETWEEN FINRA'S DEPARTMENT OFMARKET REGULATION ON BEHALF OF NYSE REGULATION, INC. AND THEFIRM. THE OFFER OF SETTLEMENT AND CONSENT WAS SUBMITTED FORTHE SOLE PURPOSE OF SETTLING THIS DISCIPLINARY PROCEEDING,WITHOUT ADJUDICATION OF ANY ISSUES OF LAW OR FACT, AND WITHOUTADMITTING OR DENYING ANY ALLEGATIONS OR FINDINGS REFERRED TOTHEREIN. THE HEARING OFFICER ACCEPTS THE OFFER OF SETTLEMENTAND CONSENT AND ISSUES THIS DECISION IN ACCORDANCE WITH NYSEARCA EQUITIES RULES. FROM APRIL 2006 THROUGH MAY 20, 2013, THEFIRM ENTERED APPROXIMATELY 67.5 MILLION ORDERS INTO THE NYSEARCA MARKETPLACE THAT FAILED TO INDICATE THE CORRECT CAPACITY.THIS CONDUCT VIOLATED NYSE ARCA EQUITIES RULE 7.33. BETWEENAPRIL 2006 AND MAY 20, 2013, THE FIRM FAILED TO ESTABLISH ANDMAINTAIN A SUPERVISORY SYSTEM THAT WAS REASONABLY DESIGNEDTO ENSURE SUBMISSION OF ACCURATE CAPACITY CODES INTO THE NYSEARCA MARKETPLACE. THIS CONDUCT VIOLATED NYSE ARCA EQUITIESRULE 6.18(B).



Resolution:




Decision


i








Initiated By: FINRA







Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT ITS INTERNALCROSSING ENGINE REPORTED INCORRECT EXECUTION CAPACITIES FORBROKER-DEALER CLIENT ORDERS THAT WERE IDENTIFIED AS PRINCIPALORDERS AND THAT WERE RECEIVED VIA ELECTRONIC FINANCIALINFORMATION EXCHANGE (FIX) CONNECTIONS. THE FINDINGS STATEDTHAT WHEN PRINCIPAL CAPACITY ORDERS WERE RECEIVED VIA FIXCONNECTION FROM BROKER-DEALER CLIENTS, AND EXECUTED IN THEFIRM'S INTERNAL CROSSING ENGINE, THE TRANSACTIONS WEREREPORTED WITH THE CLIENT'S CAPACITY AS AGENT. BECAUSE THEBROKER-DEALER CLIENTS IDENTIFIED THE ORDER AS A PRINCIPALORDER, THE FIRM SHOULD HAVE REPORTED THE TRANSACTIONS WITH APRINCIPAL CAPACITY. AS A RESULT, THE FIRM REPORTED NUMEROUSTRANSACTIONS TO THE FINRA/NASDAQ TRADE REPORTINGFACILITY THAT CONTAINED INCORRECT EXECUTION CAPACITIES.



Resolution:



No










Sanction Details: THE FIRM WAS CENSURED AND FINED $85,000. THE FIRM NOTIFIED FINRATHAT THE CLIENT CAPACITY CODE IN CERTAIN TRADE REPORTS WERENOT BEING PROPERLY REPORTED TO THE FINRA/NASDAQ TRADEREPORTING FACILITY, AS SET FORTH ABOVE. THE SANCTIONS TAKE INTOCONSIDERATION THE FACT THAT THE FIRM SELF-REPORTED THESEVIOLATIONS AND TOOK REMEDIAL ACTION.FINE PAID IN FULL ON FEBRUARY 24, 2015.


Initiated By: FINRA







Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT ITS INTERNALCROSSING ENGINE REPORTED INCORRECT EXECUTION CAPACITIES FORBROKER-DEALER CLIENT ORDERS THAT WERE IDENTIFIED AS PRINCIPALORDERS AND THAT WERE RECEIVED VIA ELECTRONIC FINANCIALINFORMATION EXCHANGE (FIX) CONNECTIONS. THE FINDINGS STATEDTHAT WHEN PRINCIPAL CAPACITY ORDERS WERE RECEIVED VIA FIXCONNECTION FROM BROKER-DEALER CLIENTS, AND EXECUTED IN THEFIRM'S INTERNAL CROSSING ENGINE, THE TRANSACTIONS WEREREPORTED WITH THE CLIENT'S CAPACITY AS AGENT. BECAUSE THEBROKER-DEALER CLIENTS IDENTIFIED THE ORDER AS A PRINCIPALORDER, THE FIRM SHOULD HAVE REPORTED THE TRANSACTIONS WITH APRINCIPAL CAPACITY. AS A RESULT, THE FIRM REPORTED NUMEROUSTRANSACTIONS TO THE FINRA/NASDAQ TRADE REPORTING FACILITYTHAT CONTAINED INCORRECT EXECUTION CAPACITIES.



Resolution:










Sanction Details: THE FIRM WAS CENSURED AND FINED $85,000. THE FIRM NOTIFIED FINRATHAT THE CLIENT CAPACITY CODE IN CERTAIN TRADE REPORTS WERENOT BEING PROPERLY REPORTED TO THE FINRA/NASDAQ TRADEREPORTING FACILITY, AS SET FORTH ABOVE. THE SANCTIONS TAKE INTOCONSIDERATION THE FACT THAT THE FIRM SELF-REPORTED THESEVIOLATIONS AND TOOK REMEDIAL ACTION.



i







Docket/Case Number: CBOT 13-9358-BC

Principal Product Type: Futures - Financial


Allegations: ON DECEMBER 14, 2012, CREDIT SUISSE SECURITIES (USA) LLC (CSSU)OPERATED AN AUTOMATED TRADING SYSTEM ("ATS") THATMALFUNCTIONED AND CAUSED AN EXCESSIVE NUMBER OF ORDERS ANDCANCEL MESSAGES TO BE ENTERED IN THE MARCH 2013 TWO-YEARFUTURES CONTRACT ON THE GLOBEX ELECTRONIC TRADING PLATFORM.ALTHOUGH CSSU BECAME AWARE OF THE MALFUNCTION IMMEDIATELY, ITALLOWED THE ATS TO CONTINUE TO OPERATE FOR 90 MINUTES WHILEATTEMPTING TO IDENTIFY THE CAUSE AND RECTIFY THE PROBLEM.DURING THOSE 90 MINUTES, THE ATS ACCOUNTED FOR 88% OF THEMESSAGING VOLUME IN THE CONTRACT. CSSU ULTIMATELYDEACTIVATED THE ATS ONLY AFTER THE EXCHANGE CONTRACTED THEFIRM REGARDING THE MESSAGING ACTIVITY.



Resolution:









Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC WAS FINED $175000.00



i


Initiated By: FINRA







Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT FOR THEMONTHS OF OCTOBER AND NOVEMBER 2011, THE FIRM MADE AVAILABLEREPORTS ON THE COVERED ORDERS IN NATIONAL MARKET SYSTEMSECURITIES THAT IT RECEIVED FOR EXECUTION FROM ANY PERSON,WHICH INCLUDED INCOMPLETE INFORMATION, AS THEY FAILED TOINCLUDE ORDERS WITH ACCOUNT TYPE CODES OF "INDIVIDUAL."



Resolution:



FINE PAID IN FULL ON FEBRUARY 23, 2015.


No










FINE PAID IN FULL ON FEBRUARY 23, 2015.


Initiated By: FINRA







Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT FOR THEMONTHS OF OCTOBER AND NOVEMBER 2011, THE FIRM MADE AVAILABLEREPORTS ON THE COVERED ORDERS IN NATIONAL MARKET SYSTEMSECURITIES THAT IT RECEIVED FOR EXECUTION FROM ANY PERSON,WHICH INCLUDED INCOMPLETE INFORMATION, AS THEY FAILED TOINCLUDE ORDERS WITH ACCOUNT TYPE CODES OF "INDIVIDUAL."



Resolution:






i


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOREPORT THE CORRECT RELATED MARKET CENTER CODE FOR 11TRANSACTIONS TO THE FINRA/NASDAQ TRADE REPORTING FACILITY(FNTRF) AND FAILED TO REPORT THE CORRECT SYMBOL INDICATING THECAPACITY IN WHICH THE FIRM EXECUTED 7,667 TRANSACTIONS INREPORTABLE SECURITIES TO THE FNTRF.








Initiated By: FINRA







WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOREPORT THE CORRECT RELATED MARKET CENTER CODE FOR 11TRANSACTIONS TO THE FINRA/NASDAQ TRADE REPORTING FACILITY(FNTRF) AND FAILED TO REPORT THE CORRECT SYMBOL INDICATING THECAPACITY IN WHICH THE FIRM EXECUTED 7,667 TRANSACTIONS INREPORTABLE SECURITIES TO THE FNTRF.


Resolution:



FINE PAID IN FULL FEBRUARY 23, 2015.


No




Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOREPORT THE CORRECT RELATED MARKET CENTER CODE FOR 11TRANSACTIONS TO THE FINRA/NASDAQ TRADE REPORTING FACILITY(FNTRF) AND FAILED TO REPORT THE CORRECT SYMBOL INDICATING THECAPACITY IN WHICH THE FIRM EXECUTED 7,667 TRANSACTIONS INREPORTABLE SECURITIES TO THE FNTRF.








Initiated By: FINRA







WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOREPORT THE CORRECT RELATED MARKET CENTER CODE FOR 11TRANSACTIONS TO THE FINRA/NASDAQ TRADE REPORTING FACILITY(FNTRF) AND FAILED TO REPORT THE CORRECT SYMBOL INDICATING THECAPACITY IN WHICH THE FIRM EXECUTED 7,667 TRANSACTIONS INREPORTABLE SECURITIES TO THE FNTRF.


Resolution:






i








Other Product Type(s): FUTURES - FINANCIAL AND FUTURES COMMODITY

Allegations: CME GROUP MARKET REGULATION ("MARKET REGULATION") CONDUCTEDA REVIEW OF THE CUSTOMER TYPE INDICATOR (CTI) CODES SUBMITTEDBY CREDIT SUISSE SECURITIES (USA) LLC ("CREDIT SUISSE") FOR TRADESEXECUTED DURING THE PERIODS OF JULY 1 - 31, 2014 AND OCTOBER 1 -31, 2014, AND IDENTIFIED TRADES THAT WERE ASSIGNED INCORRECT CTICODES BASED UPON THE ACCOUNTS' REGISTRATION IN THE EXCHANGEFEE SYSTEM.












Resolution:


Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC WAS FINED $15,000.00 WHICH WASPAID ON JANUARY 6, 2015.


Decision


i


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT TO WININVESTMENT BANKING BUSINESS FROM A COMPANY, CREDIT SUISSE'SEQUITY RESEARCH ANALYST PARTICIPATED IN THE FIRM'S SOLICITATIONEFFORTS OF THE COMPANY'S PLANNED INITIAL PUBLIC OFFERING (IPO).THE FINDINGS STATED THAT THE COMPANY AND ITS PRIVATE EQUITYOWNERS INVITED CREDIT SUISSE AND OTHER BROKER-DEALERS TOCOMPETE FOR A ROLE IN THE COMPANY'S IPO. CREDIT SUISSE ALLOWEDITS RESEARCH ANALYST TO PRESENT HIS VIEWS ON THE COMPANY TOITS MANAGEMENT AND PRIVATE EQUITY OWNERS. BEFORE THE COMPANYAWARDED ITS IPO BUSINESS, IT ASKED THE EQUITY RESEARCH ANALYSTSFROM THE FIRMS COMPETING FOR THE BUSINESS TO MAKEPRESENTATIONS TO THE COMPANY'S MANAGEMENT AND PRIVATE EQUITYOWNERS. THE COMPANY PROVIDED SPECIFIC TOPICS FOR THE ANALYSTSTO ADDRESS AND PUT THE FIRMS ON NOTICE THAT, AS PART OF THEUNDERWRITER-SELECTION PROCESS, IT WOULD CONSIDER EACHANALYST'S VIEWS OF THE COMPANY AND WHETHER THE ANALYST'SVALUATION WAS CONSISTENT WITH THE FIRM'S INVESTMENT BANKERS'VALUATION. CREDIT SUISSE'S RESEARCH ANALYST PRESENTED TO THECOMPANY AND ITS PRIVATE EQUITY OWNERS THEREBY PARTICIPATING INTHE FIRM'S EFFORTS TO SOLICIT INVESTMENT BANKING BUSINESS FROMTHE COMPANY. THE FINDINGS ALSO STATED THAT CREDIT SUISSEOFFERED FAVORABLE RESEARCH TO INDUCE THE COMPANY TO AWARDTHE FIRM ITS INVESTMENT BANKING BUSINESS. THE FIRM'S ANALYST'SPRESENTATION TO THE COMPANY AND THE PRIVATE EQUITY OWNERSSUPPORTED THE FIRM'S INVESTMENT BANKING PITCH AND OFFERED APOSITIVE EVALUATION OF THE COMPANY. MOREOVER, FOLLOWING THEANALYST'S PRESENTATION, THE COMPANY ASKED CREDIT SUISSE TOCOMPLETE A TEMPLATE SHOWING AN "EQUITY COMMITMENT COMMITTEEAPPROV[ED]" VALUATION OF IT, WHICH WOULD INCLUDE THE ANALYST'SVIEWS ON THE COMPANY'S VALUATION. THE COMPANY AND ITS PRIVATEEQUITY OWNERS ASKED THE FIRMS TO COMPLETE THE TEMPLATE ANDPROVIDE A FIRM-WIDE VALUATION THAT THE FIRM, INCLUDING ITSANALYST, WOULD BE EXPECTED TO SUPPORT AFTER THE COMPANYAWARDED ITS IPO BUSINESS, ABSENT UNEXPECTED DEVELOPMENTS.INDEED, THE COMPANY TOLD SOME FIRMS THAT THE PURPOSE OF THETEMPLATE WAS TO PREVENT IT FROM BEING "BURNED" BY AN ANALYST'SDECISION TO ADOPT A NEGATIVE VIEW OF THE COMPANY AFTER IT HADAWARDED ITS INVESTMENT BANKING BUSINESS TO THE ANALYST'S FIRM.CREDIT SUISSE COMPLIED WITH THE COMPANY'S REQUEST. THEFINDINGS ALSO INCLUDED THAT CREDIT SUISSE FAILED TO ADOPT ANDIMPLEMENT ADEQUATE WRITTEN SUPERVISORY PROCEDURESGOVERNING ANALYST INVOLVEMENT IN INVESTMENT BANKINGSOLICITATIONS AND OFFERS OF FAVORABLE RESEARCH COVERAGE.SUPERVISORY PERSONNEL AT CREDIT SUISSE WERE AWARE THAT THECOMPANY HAD ASKED THE FIRM'S RESEARCH ANALYST TO MAKE APRESENTATION TO IT THAT WAS NOT PART OF THE ANALYST'S DUEDILIGENCE, THAT THE COMPANY WOULD TAKE THE PRESENTATION INTOACCOUNT WHEN AWARDING THE UNDERWRITING MANDATE IN ITS IPO,THAT THE PRESENTATION WOULD INCLUDE THE ANALYST'S FAVORABLEVIEWS OF THE COMPANY, AND THAT THE COMPANY WANTED A FINALVALUATION THAT THE ENTIRE FIRM, INCLUDING ITS ANALYST, WOULDSUPPORT IF SELECTED AS AN UNDERWRITER. NEVERTHELESS, THEFIRM'S SUPERVISORY PERSONNEL ALLOWED THE ANALYST TO MAKE THEPRESENTATION.







Initiated By: FINRA


Other


N/A




Other Product Type(s): INITIAL PUBLIC OFFERING

WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT TO WININVESTMENT BANKING BUSINESS FROM A COMPANY, CREDIT SUISSE'SEQUITY RESEARCH ANALYST PARTICIPATED IN THE FIRM'S SOLICITATIONEFFORTS OF THE COMPANY'S PLANNED INITIAL PUBLIC OFFERING (IPO).THE FINDINGS STATED THAT THE COMPANY AND ITS PRIVATE EQUITYOWNERS INVITED CREDIT SUISSE AND OTHER BROKER-DEALERS TOCOMPETE FOR A ROLE IN THE COMPANY'S IPO. CREDIT SUISSE ALLOWEDITS RESEARCH ANALYST TO PRESENT HIS VIEWS ON THE COMPANY TOITS MANAGEMENT AND PRIVATE EQUITY OWNERS. BEFORE THE COMPANYAWARDED ITS IPO BUSINESS, IT ASKED THE EQUITY RESEARCH ANALYSTSFROM THE FIRMS COMPETING FOR THE BUSINESS TO MAKEPRESENTATIONS TO THE COMPANY'S MANAGEMENT AND PRIVATE EQUITYOWNERS. THE COMPANY PROVIDED SPECIFIC TOPICS FOR THE ANALYSTSTO ADDRESS AND PUT THE FIRMS ON NOTICE THAT, AS PART OF THEUNDERWRITER-SELECTION PROCESS, IT WOULD CONSIDER EACHANALYST'S VIEWS OF THE COMPANY AND WHETHER THE ANALYST'SVALUATION WAS CONSISTENT WITH THE FIRM'S INVESTMENT BANKERS'VALUATION. CREDIT SUISSE'S RESEARCH ANALYST PRESENTED TO THECOMPANY AND ITS PRIVATE EQUITY OWNERS THEREBY PARTICIPATING INTHE FIRM'S EFFORTS TO SOLICIT INVESTMENT BANKING BUSINESS FROMTHE COMPANY. THE FINDINGS ALSO STATED THAT CREDIT SUISSEOFFERED FAVORABLE RESEARCH TO INDUCE THE COMPANY TO AWARDTHE FIRM ITS INVESTMENT BANKING BUSINESS. THE FIRM'S ANALYST'SPRESENTATION TO THE COMPANY AND THE PRIVATE EQUITY OWNERSSUPPORTED THE FIRM'S INVESTMENT BANKING PITCH AND OFFERED APOSITIVE EVALUATION OF THE COMPANY. MOREOVER, FOLLOWING THEANALYST'S PRESENTATION, THE COMPANY ASKED CREDIT SUISSE TOCOMPLETE A TEMPLATE SHOWING AN "EQUITY COMMITMENT COMMITTEEAPPROV[ED]" VALUATION OF IT, WHICH WOULD INCLUDE THE ANALYST'SVIEWS ON THE COMPANY'S VALUATION. THE COMPANY AND ITS PRIVATEEQUITY OWNERS ASKED THE FIRMS TO COMPLETE THE TEMPLATE ANDPROVIDE A FIRM-WIDE VALUATION THAT THE FIRM, INCLUDING ITSANALYST, WOULD BE EXPECTED TO SUPPORT AFTER THE COMPANYAWARDED ITS IPO BUSINESS, ABSENT UNEXPECTED DEVELOPMENTS.INDEED, THE COMPANY TOLD SOME FIRMS THAT THE PURPOSE OF THETEMPLATE WAS TO PREVENT IT FROM BEING "BURNED" BY AN ANALYST'SDECISION TO ADOPT A NEGATIVE VIEW OF THE COMPANY AFTER IT HADAWARDED ITS INVESTMENT BANKING BUSINESS TO THE ANALYST'S FIRM.CREDIT SUISSE COMPLIED WITH THE COMPANY'S REQUEST. THEFINDINGS ALSO INCLUDED THAT CREDIT SUISSE FAILED TO ADOPT ANDIMPLEMENT ADEQUATE WRITTEN SUPERVISORY PROCEDURESGOVERNING ANALYST INVOLVEMENT IN INVESTMENT BANKINGSOLICITATIONS AND OFFERS OF FAVORABLE RESEARCH COVERAGE.SUPERVISORY PERSONNEL AT CREDIT SUISSE WERE AWARE THAT THECOMPANY HAD ASKED THE FIRM'S RESEARCH ANALYST TO MAKE APRESENTATION TO IT THAT WAS NOT PART OF THE ANALYST'S DUEDILIGENCE, THAT THE COMPANY WOULD TAKE THE PRESENTATION INTOACCOUNT WHEN AWARDING THE UNDERWRITING MANDATE IN ITS IPO,THAT THE PRESENTATION WOULD INCLUDE THE ANALYST'S FAVORABLEVIEWS OF THE COMPANY, AND THAT THE COMPANY WANTED A FINALVALUATION THAT THE ENTIRE FIRM, INCLUDING ITS ANALYST, WOULDSUPPORT IF SELECTED AS AN UNDERWRITER. NEVERTHELESS, THEFIRM'S SUPERVISORY PERSONNEL ALLOWED THE ANALYST TO MAKE THEPRESENTATION.











Sanction Details: THE FIRM IS CENSURED AND FINED $5,000,000. FINE PAID IN FULL ONDECEMBER 18, 2014.


No



Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT TO WININVESTMENT BANKING BUSINESS FROM A COMPANY, CREDIT SUISSE'SEQUITY RESEARCH ANALYST PARTICIPATED IN THE FIRM'S SOLICITATIONEFFORTS OF THE COMPANY'S PLANNED INITIAL PUBLIC OFFERING (IPO).THE FINDINGS STATED THAT THE COMPANY AND ITS PRIVATE EQUITYOWNERS INVITED CREDIT SUISSE AND OTHER BROKER-DEALERS TOCOMPETE FOR A ROLE IN THE COMPANY'S IPO. CREDIT SUISSE ALLOWEDITS RESEARCH ANALYST TO PRESENT HIS VIEWS ON THE COMPANY TOITS MANAGEMENT AND PRIVATE EQUITY OWNERS. BEFORE THE COMPANYAWARDED ITS IPO BUSINESS, IT ASKED THE EQUITY RESEARCH ANALYSTSFROM THE FIRMS COMPETING FOR THE BUSINESS TO MAKEPRESENTATIONS TO THE COMPANY'S MANAGEMENT AND PRIVATE EQUITYOWNERS. THE COMPANY PROVIDED SPECIFIC TOPICS FOR THE ANALYSTSTO ADDRESS AND PUT THE FIRMS ON NOTICE THAT, AS PART OF THEUNDERWRITER-SELECTION PROCESS, IT WOULD CONSIDER EACHANALYST'S VIEWS OF THE COMPANY AND WHETHER THE ANALYST'SVALUATION WAS CONSISTENT WITH THE FIRM'S INVESTMENT BANKERS'VALUATION. CREDIT SUISSE'S RESEARCH ANALYST PRESENTED TO THECOMPANY AND ITS PRIVATE EQUITY OWNERS THEREBY PARTICIPATING INTHE FIRM'S EFFORTS TO SOLICIT INVESTMENT BANKING BUSINESS FROMTHE COMPANY. THE FINDINGS ALSO STATED THAT CREDIT SUISSEOFFERED FAVORABLE RESEARCH TO INDUCE THE COMPANY TO AWARDTHE FIRM ITS INVESTMENT BANKING BUSINESS. THE FIRM'S ANALYST'SPRESENTATION TO THE COMPANY AND THE PRIVATE EQUITY OWNERSSUPPORTED THE FIRM'S INVESTMENT BANKING PITCH AND OFFERED APOSITIVE EVALUATION OF THE COMPANY. MOREOVER, FOLLOWING THEANALYST'S PRESENTATION, THE COMPANY ASKED CREDIT SUISSE TOCOMPLETE A TEMPLATE SHOWING AN "EQUITY COMMITMENT COMMITTEEAPPROV[ED]" VALUATION OF IT, WHICH WOULD INCLUDE THE ANALYST'SVIEWS ON THE COMPANY'S VALUATION. THE COMPANY AND ITS PRIVATEEQUITY OWNERS ASKED THE FIRMS TO COMPLETE THE TEMPLATE ANDPROVIDE A FIRM-WIDE VALUATION THAT THE FIRM, INCLUDING ITSANALYST, WOULD BE EXPECTED TO SUPPORT AFTER THE COMPANYAWARDED ITS IPO BUSINESS, ABSENT UNEXPECTED DEVELOPMENTS.INDEED, THE COMPANY TOLD SOME FIRMS THAT THE PURPOSE OF THETEMPLATE WAS TO PREVENT IT FROM BEING "BURNED" BY AN ANALYST'SDECISION TO ADOPT A NEGATIVE VIEW OF THE COMPANY AFTER IT HADAWARDED ITS INVESTMENT BANKING BUSINESS TO THE ANALYST'S FIRM.CREDIT SUISSE COMPLIED WITH THE COMPANY'S REQUEST. THEFINDINGS ALSO INCLUDED THAT CREDIT SUISSE FAILED TO ADOPT ANDIMPLEMENT ADEQUATE WRITTEN SUPERVISORY PROCEDURESGOVERNING ANALYST INVOLVEMENT IN INVESTMENT BANKINGSOLICITATIONS AND OFFERS OF FAVORABLE RESEARCH COVERAGE.SUPERVISORY PERSONNEL AT CREDIT SUISSE WERE AWARE THAT THECOMPANY HAD ASKED THE FIRM'S RESEARCH ANALYST TO MAKE APRESENTATION TO IT THAT WAS NOT PART OF THE ANALYST'S DUEDILIGENCE, THAT THE COMPANY WOULD TAKE THE PRESENTATION INTOACCOUNT WHEN AWARDING THE UNDERWRITING MANDATE IN ITS IPO,THAT THE PRESENTATION WOULD INCLUDE THE ANALYST'S FAVORABLEVIEWS OF THE COMPANY, AND THAT THE COMPANY WANTED A FINALVALUATION THAT THE ENTIRE FIRM, INCLUDING ITS ANALYST, WOULDSUPPORT IF SELECTED AS AN UNDERWRITER. NEVERTHELESS, THEFIRM'S SUPERVISORY PERSONNEL ALLOWED THE ANALYST TO MAKE THEPRESENTATION.







Initiated By: FINRA


Other


N/A




Other Product Type(s): INITIAL PUBLIC OFFERING

WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT TO WININVESTMENT BANKING BUSINESS FROM A COMPANY, CREDIT SUISSE'SEQUITY RESEARCH ANALYST PARTICIPATED IN THE FIRM'S SOLICITATIONEFFORTS OF THE COMPANY'S PLANNED INITIAL PUBLIC OFFERING (IPO).THE FINDINGS STATED THAT THE COMPANY AND ITS PRIVATE EQUITYOWNERS INVITED CREDIT SUISSE AND OTHER BROKER-DEALERS TOCOMPETE FOR A ROLE IN THE COMPANY'S IPO. CREDIT SUISSE ALLOWEDITS RESEARCH ANALYST TO PRESENT HIS VIEWS ON THE COMPANY TOITS MANAGEMENT AND PRIVATE EQUITY OWNERS. BEFORE THE COMPANYAWARDED ITS IPO BUSINESS, IT ASKED THE EQUITY RESEARCH ANALYSTSFROM THE FIRMS COMPETING FOR THE BUSINESS TO MAKEPRESENTATIONS TO THE COMPANY'S MANAGEMENT AND PRIVATE EQUITYOWNERS. THE COMPANY PROVIDED SPECIFIC TOPICS FOR THE ANALYSTSTO ADDRESS AND PUT THE FIRMS ON NOTICE THAT, AS PART OF THEUNDERWRITER-SELECTION PROCESS, IT WOULD CONSIDER EACHANALYST'S VIEWS OF THE COMPANY AND WHETHER THE ANALYST'SVALUATION WAS CONSISTENT WITH THE FIRM'S INVESTMENT BANKERS'VALUATION. CREDIT SUISSE'S RESEARCH ANALYST PRESENTED TO THECOMPANY AND ITS PRIVATE EQUITY OWNERS THEREBY PARTICIPATING INTHE FIRM'S EFFORTS TO SOLICIT INVESTMENT BANKING BUSINESS FROMTHE COMPANY. THE FINDINGS ALSO STATED THAT CREDIT SUISSEOFFERED FAVORABLE RESEARCH TO INDUCE THE COMPANY TO AWARDTHE FIRM ITS INVESTMENT BANKING BUSINESS. THE FIRM'S ANALYST'SPRESENTATION TO THE COMPANY AND THE PRIVATE EQUITY OWNERSSUPPORTED THE FIRM'S INVESTMENT BANKING PITCH AND OFFERED APOSITIVE EVALUATION OF THE COMPANY. MOREOVER, FOLLOWING THEANALYST'S PRESENTATION, THE COMPANY ASKED CREDIT SUISSE TOCOMPLETE A TEMPLATE SHOWING AN "EQUITY COMMITMENT COMMITTEEAPPROV[ED]" VALUATION OF IT, WHICH WOULD INCLUDE THE ANALYST'SVIEWS ON THE COMPANY'S VALUATION. THE COMPANY AND ITS PRIVATEEQUITY OWNERS ASKED THE FIRMS TO COMPLETE THE TEMPLATE ANDPROVIDE A FIRM-WIDE VALUATION THAT THE FIRM, INCLUDING ITSANALYST, WOULD BE EXPECTED TO SUPPORT AFTER THE COMPANYAWARDED ITS IPO BUSINESS, ABSENT UNEXPECTED DEVELOPMENTS.INDEED, THE COMPANY TOLD SOME FIRMS THAT THE PURPOSE OF THETEMPLATE WAS TO PREVENT IT FROM BEING "BURNED" BY AN ANALYST'SDECISION TO ADOPT A NEGATIVE VIEW OF THE COMPANY AFTER IT HADAWARDED ITS INVESTMENT BANKING BUSINESS TO THE ANALYST'S FIRM.CREDIT SUISSE COMPLIED WITH THE COMPANY'S REQUEST. THEFINDINGS ALSO INCLUDED THAT CREDIT SUISSE FAILED TO ADOPT ANDIMPLEMENT ADEQUATE WRITTEN SUPERVISORY PROCEDURESGOVERNING ANALYST INVOLVEMENT IN INVESTMENT BANKINGSOLICITATIONS AND OFFERS OF FAVORABLE RESEARCH COVERAGE.SUPERVISORY PERSONNEL AT CREDIT SUISSE WERE AWARE THAT THECOMPANY HAD ASKED THE FIRM'S RESEARCH ANALYST TO MAKE APRESENTATION TO IT THAT WAS NOT PART OF THE ANALYST'S DUEDILIGENCE, THAT THE COMPANY WOULD TAKE THE PRESENTATION INTOACCOUNT WHEN AWARDING THE UNDERWRITING MANDATE IN ITS IPO,THAT THE PRESENTATION WOULD INCLUDE THE ANALYST'S FAVORABLEVIEWS OF THE COMPANY, AND THAT THE COMPANY WANTED A FINALVALUATION THAT THE ENTIRE FIRM, INCLUDING ITS ANALYST, WOULDSUPPORT IF SELECTED AS AN UNDERWRITER. NEVERTHELESS, THEFIRM'S SUPERVISORY PERSONNEL ALLOWED THE ANALYST TO MAKE THEPRESENTATION.


Resolution:










Sanction Details: THE FIRM IS CENSURED AND FINED $5,000,000.



i







Docket/Case Number: CME 12-8756-BC



Allegations: CME GROUP FOUND THAT CREDIT SUISSE OPERATED AN AUTOMATEDTRADING SYSTEM ("ATS"), WHICH UTILIZED MARKET DATA TO CALCULATERISK AND EXPOSURE IN ORDER TO TRADE FUTURES ON CME GLOBEX.ON JANUARY 31, 2012, THE STOCK PRICE OF AN UNDERLYINGCOMPONENT OF AN INDEX WAS QUOTED INCORRECTLY BY A THIRD-PARTY VENDOR, CAUSING ERRANT CALCULATIONS IN DETERMINING THENUMBER OF FUTURES CONTRACTS TO BE TRADED BY THE ATS. THEERRANT CALCULATIONS CAUSE THE ATS TO RAPIDLY ENTER ANDEXECUTE BUY AND SELL ORDERS OF VARYING SIZES IN MARCH 2012 E-MINI S&P AND MARCH 2012 E-MINI NASDAQ FUTURES CONTRACTS. THESEORDER ENTRIES AND EXECUTIONS CONTRIBUTED TO HIGHER THANUSUAL VOLUME IN THOSE CONTRACTS. CREDIT SUISSE FAILED TO HAVEPREVENTED ERRONEOUS OR INCORRECT THIRD-PARTY DATA FROMIMPACTING THE OPERATION OF ATS, THEREBY VIOLATING RULE 432.Q.



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE RULE VIOLATION UPON WHICHTHE PENALTY IS BASED, CREDIT SUISSSE AGREES TO THE FINDING ANDIS THEREFORE FINED $150,000.00.








Sanction Details: WITHOUT ADMITTING OR DENYING THE RULE VIOLATION UPON WHICHTHE PENALTY IS BASED, CREDIT SUISSSE AGREES TO THE FINDING ANDIS THEREFORE FINED $150,000.00.


i


Initiated By: FINRA







Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED,WITHIN 30 SECONDS AFTER EXECUTION, TO TRANSMIT LAST SALEREPORTS OF TRANSACTIONS IN OVER-THE-COUNTER (OTC) EQUITYSECURITIES TO THE OTC REPORTING FACILITY.



Resolution:


Sanction Details: THE FIRM WAS CENSURED AND FINED $15,000. FINE PAID IN FULL ONDECEMBER 3, 2014.


No










Initiated By: FINRA







Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED,WITHIN 30 SECONDS AFTER EXECUTION, TO TRANSMIT LAST SALEREPORTS OF TRANSACTIONS IN OVER-THE-COUNTER (OTC) EQUITYSECURITIES TO THE OTC REPORTING FACILITY.



Resolution:


Sanction Details: THE FIRM WAS CENSURED AND FINED $15,000




i


Initiated By: FINRA

Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTION AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOREPORT TO THE NASD/NASDAQ TRADE REPORTING FACILITY (FORTRADES EFFECTED ON OR PRIOR TO JULY 29, 2007) AND THEFINRA/NASDAQ TRADE REPORTING FACILITY (FOR TRADES EFFECTED ONOR AFTER JULY 30, 2007) THE CONTRA EXECUTING PARTY AND THECORRECT SYMBOL INDICATING THE CAPACITY OF THE CONTRA PARTY INNON-MEDIA REPORTED TRANSACTIONS.








Initiated By: FINRA








Resolution:


Sanction Details: THE FIRM WAS FINED $5,000.FINE PAID IN FULL ON NOVEMBER 25, 2014.


No




Initiated By: FINRA



Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTION AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOREPORT TO THE NASD/NASDAQ TRADE REPORTING FACILITY (FORTRADES EFFECTED ON OR PRIOR TO JULY 29, 2007) AND THEFINRA/NASDAQ TRADE REPORTING FACILITY (FOR TRADES EFFECTED ONOR AFTER JULY 30, 2007) THE CONTRA EXECUTING PARTY AND THECORRECT SYMBOL INDICATING THE CAPACITY OF THE CONTRA PARTY INNON-MEDIA REPORTED TRANSACTIONS.















Resolution:


Sanction Details: THE FIRM WAS FINED $5,000

Firm Statement FINE PAID ON NOVEMBER 25, 2014




i




Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS THAT ITVIOLATED NYSE RULE 123C BY IMPROPERLY CANCELLING A NUMBER OFMARKET-ON-CLOSE (MOC) AND LIMIT-ON-CLOSE (LOC) ORDERS AFTERTHE PRESCRIBED CUT-OFF TIMES, AND VIOLATED NYSE RULE 342 BYFAILING TO IMPLEMENT ADEQUATE SYSTEMS AND CONTROLS, INCLUDINGA SEPARATE SYSTEM OF FOLLOW-UP AND REVIEW, REASONABLYDESIGNED TO ACHIEVE COMPLIANCE WITH NYSE RULE 123C. NYSE RULE123C PROVIDED, AMONG OTHER THINGS, THAT BETWEEN 3:45 P.M. AND3:58 P.M., MOC AND LOC ORDERS MAY ONLY BE CANCELLED OR REDUCEDIN SIZE TO CORRECT A LEGITIMATE ERROR; AND AFTER 3:58 P.M., MOCAND LOC ORDERS MAY NOT BE CANCELLED OR ADJUSTED FOR ANYREASON. DURING THE RELEVANT PERIOD, THE FIRM IMPROPERLYCANCELLED 15,198 LOC ORDERS ON 158 TRADE DATES AND 973 MOCORDERS ON 48 TRADE DATES, AFTER THE PRESCRIBED CUT-OFF TIME OF3:45 P.M. (OR 12:45 P.M. ON DAYS WHEN THE SCHEDULED CLOSE OFTRADING WAS 1:00 P.M.), BUT PRIOR TO 3:58 P.M. (OR 12:58 P.M. WHEN THESCHEDULED CLOSE OF TRADING WAS 1:00 P.M.).









Other


N/A






Resolution:



Regulator Statement CASE NUMBER 2013035473501 INCLUDED MERGED CASE NUMBERS20130395247 AND 20140403862.


No




Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS THAT ITVIOLATED NYSE RULE 123C BY IMPROPERLY CANCELLING A NUMBER OFMARKET-ON-CLOSE (MOC) AND LIMIT-ON-CLOSE (LOC) ORDERS AFTERTHE PRESCRIBED CUT-OFF TIMES, AND VIOLATED NYSE RULE 342 BYFAILING TO IMPLEMENT ADEQUATE SYSTEMS AND CONTROLS, INCLUDINGA SEPARATE SYSTEM OF FOLLOW-UP AND REVIEW, REASONABLYDESIGNED TO ACHIEVE COMPLIANCE WITH NYSE RULE 123C. NYSE RULE123C PROVIDED, AMONG OTHER THINGS, THAT BETWEEN 3:45 P.M. AND3:58 P.M., MOC AND LOC ORDERS MAY ONLY BE CANCELLED OR REDUCEDIN SIZE TO CORRECT A LEGITIMATE ERROR; AND AFTER 3:58 P.M., MOCAND LOC ORDERS MAY NOT BE CANCELLED OR ADJUSTED FOR ANYREASON. DURING THE RELEVANT PERIOD, THE FIRM IMPROPERLYCANCELLED 15,198 LOC ORDERS ON 158 TRADE DATES AND 973 MOCORDERS ON 48 TRADE DATES, AFTER THE PRESCRIBED CUT-OFF TIME OF3:45 P.M. (OR 12:45 P.M. ON DAYS WHEN THE SCHEDULED CLOSE OFTRADING WAS 1:00 P.M.), BUT PRIOR TO 3:58 P.M. (OR 12:58 P.M. WHEN THESCHEDULED CLOSE OF TRADING WAS 1:00 P.M.).









Other


N/A





WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS THAT ITVIOLATED NYSE RULE 123C BY IMPROPERLY CANCELLING A NUMBER OFMARKET-ON-CLOSE (MOC) AND LIMIT-ON-CLOSE (LOC) ORDERS AFTERTHE PRESCRIBED CUT-OFF TIMES, AND VIOLATED NYSE RULE 342 BYFAILING TO IMPLEMENT ADEQUATE SYSTEMS AND CONTROLS, INCLUDINGA SEPARATE SYSTEM OF FOLLOW-UP AND REVIEW, REASONABLYDESIGNED TO ACHIEVE COMPLIANCE WITH NYSE RULE 123C. NYSE RULE123C PROVIDED, AMONG OTHER THINGS, THAT BETWEEN 3:45 P.M. AND3:58 P.M., MOC AND LOC ORDERS MAY ONLY BE CANCELLED OR REDUCEDIN SIZE TO CORRECT A LEGITIMATE ERROR; AND AFTER 3:58 P.M., MOCAND LOC ORDERS MAY NOT BE CANCELLED OR ADJUSTED FOR ANYREASON. DURING THE RELEVANT PERIOD, THE FIRM IMPROPERLYCANCELLED 15,198 LOC ORDERS ON 158 TRADE DATES AND 973 MOCORDERS ON 48 TRADE DATES, AFTER THE PRESCRIBED CUT-OFF TIME OF3:45 P.M. (OR 12:45 P.M. ON DAYS WHEN THE SCHEDULED CLOSE OFTRADING WAS 1:00 P.M.), BUT PRIOR TO 3:58 P.M. (OR 12:58 P.M. WHEN THESCHEDULED CLOSE OF TRADING WAS 1:00 P.M.).


Resolution:


Sanction Details: THE FIRM WAS CENSURED AND FINED $110,000

Firm Statement CASE NUMBER 2013035473501 INCLUDED MERGED CASE NUMBERS20130395247 AND 20140403862.




i


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED, ASMANAGING UNDERWRITER, TO REPORT NEW ISSUE OFFERINGS IN TRADEREPORTING AND COMPLIANCE ENGINE (TRACE)-ELIGIBLE CORPORATESECURITIES IN ACCORDANCE WITH THE REQUIREMENTS OF FINRA RULE6760(C). THE FINDINGS STATED THAT THE FIRM FAILED TO REPORT S1TRANSACTIONS IN TRACE-ELIGIBLE AGENCY DEBT SECURITIES TO TRACEWITHIN 15 MINUTES OF THE TIME OF EXECUTION AND REPORTED S1TRANSACTIONS IN TRACE-ELIGIBLE AGENCY DEBT SECURITIES TO TRACETHAT IT WAS NOT REQUIRED TO REPORT.







Initiated By: FINRA





Principal Product Type: Debt - Corporate

Other Product Type(s): AGENCY DEBT SECURITIES

WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED, ASMANAGING UNDERWRITER, TO REPORT NEW ISSUE OFFERINGS IN TRADEREPORTING AND COMPLIANCE ENGINE (TRACE)-ELIGIBLE CORPORATESECURITIES IN ACCORDANCE WITH THE REQUIREMENTS OF FINRA RULE6760(C). THE FINDINGS STATED THAT THE FIRM FAILED TO REPORT S1TRANSACTIONS IN TRACE-ELIGIBLE AGENCY DEBT SECURITIES TO TRACEWITHIN 15 MINUTES OF THE TIME OF EXECUTION AND REPORTED S1TRANSACTIONS IN TRACE-ELIGIBLE AGENCY DEBT SECURITIES TO TRACETHAT IT WAS NOT REQUIRED TO REPORT.


Resolution:


Sanction Details: THE FIRM WAS CENSURED AND FINED $15,000.FINE PAID IN FULL ON OCTOBER 30, 2014.


No




Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED, ASMANAGING UNDERWRITER, TO REPORT NEW ISSUE OFFERINGS IN TRADEREPORTING AND COMPLIANCE ENGINE (TRACE)-ELIGIBLE CORPORATESECURITIES IN ACCORDANCE WITH THE REQUIREMENTS OF FINRA RULE6760(C). THE FINDINGS STATED THAT THE FIRM FAILED TO REPORT S1TRANSACTIONS IN TRACE-ELIGIBLE AGENCY DEBT SECURITIES TO TRACEWITHIN 15 MINUTES OF THE TIME OF EXECUTION AND REPORTED S1TRANSACTIONS IN TRACE-ELIGIBLE AGENCY DEBT SECURITIES TO TRACETHAT IT WAS NOT REQUIRED TO REPORT.








Initiated By: FINRA


Censure





Other Product Type(s): AGENCY DEBT SECURITIES

WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED, ASMANAGING UNDERWRITER, TO REPORT NEW ISSUE OFFERINGS IN TRADEREPORTING AND COMPLIANCE ENGINE (TRACE)-ELIGIBLE CORPORATESECURITIES IN ACCORDANCE WITH THE REQUIREMENTS OF FINRA RULE6760(C). THE FINDINGS STATED THAT THE FIRM FAILED TO REPORT S1TRANSACTIONS IN TRACE-ELIGIBLE AGENCY DEBT SECURITIES TO TRACEWITHIN 15 MINUTES OF THE TIME OF EXECUTION AND REPORTED S1TRANSACTIONS IN TRACE-ELIGIBLE AGENCY DEBT SECURITIES TO TRACETHAT IT WAS NOT REQUIRED TO REPORT.


Resolution:



Firm Statement SEE QUESTION 7




i






Docket/Case Number: 13-1937 AND 13-2016


Other Product Type(s): TREASURY NOTE FUTURES CONTRACT

Allegations: REPORTING INFRACTION IN VIOLATION OF RULE 854


Resolution: Other 190©2020 FINRA. All rights reserved. Report about CREDIT SUISSE SECURITIES (USA) LLC







Resolution:


Sanction Details: THE FIRM WAS FINED $7500 WHICH WAS PAID ON JULY 16, 2014


Other


i









Allegations: SUBMISSION OF INCORRECT CTI CODES TO THE CME, CBT, NYMEX, ANDCOMEX IN VIOLATION OF RULE 536.D.



Resolution:

Other Sanctions Ordered: N/A

Sanction Details: THE FIRM WAS FINED $4500 WHICH WAS PAID ON JULY 25, 2014.


Other


i


Allegations: UNFORESEEABLE ERRORS IN DATA FEEDS TO AN AUTOMATIC TRADINGSYSTEM CAUSED ERRONEOUS FUTURES TRADES TO BE SUBMITTED TOTHE ICE ON TWO SEPARATE INCIDENTS ON AUGUST 8, 2011 AND JANUARY31, 2012.







Initiated By: ICE FUTURES U.S.,INC.





Docket/Case Number: 2011--048



UNFORESEEABLE ERRORS IN DATA FEEDS TO AN AUTOMATIC TRADINGSYSTEM CAUSED ERRONEOUS FUTURES TRADES TO BE SUBMITTED TOTHE ICE ON TWO SEPARATE INCIDENTS ON AUGUST 8, 2011 AND JANUARY31, 2012.


Resolution:


Sanction Details: SEE ABOVE

Firm Statement THE ACTION WAS RESOLVED ON JULY 7, 2014 THROUGH THE EXECUTIONOF AN AWC, IN WHICH CREDIT SUISSE NEITHER ADMITTED NOR DENIED AVIOLATION OF ICE EXCHANGE RULE 4.04(B), AND PAYMENT OF A $25,000FINE.




i


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT THE FIRMFAILED TO TIMELY REPORT TO ORDER AUDIT TRAIL SYSTEM (OATS)REPORTABLE ORDER EVENTS (ROES) AND TRANSMITTED TO OATSEXECUTION OR COMBINED ORDER/EXECUTION REPORTS THATCONTAINED INACCURATE, INCOMPLETE, OR IMPROPERLY FORMATTEDDATA THAT OATS WAS UNABLE TO LINK TO THE RELATED TRADE REPORTSIN A FINRA TRADE REPORTING SYSTEM. THE FINDINGS STATED THAT THEFIRM SUBMITTED COMBINED ORDER/EXECUTION REPORTS FOR ORDERSTHAT WERE ROUTED AWAY FOR EXECUTION AND FAILED TO SUBMIT THEAPPROPRIATE REPORTING EXCEPTION CODE FOR COMBINEDORDER/EXECUTION REPORTS. THE FINDINGS ALSO STATED THAT THEFIRM TRANSMITTED TO OATS REPORTS THAT CONTAINED INACCURATE,INCOMPLETE, OR IMPROPERLY FORMATTED DATA. SPECIFICALLY, THEFIRM TRANSMITTED EXECUTION OR COMBINED ORDER/EXECUTIONREPORTS THAT CONTAINED INCORRECT REPORTING EXCEPTION CODESOF "P" WHEN THE REPORTS WERE REQUIRED TO BE MATCHED TO TRADEREPORTS AND SUBMITTED EXECUTION OR COMBINEDORDER/EXECUTION REPORTS FOR ORDERS THAT WERE ROUTED AWAYFOR EXECUTION. THE FINDINGS ALSO INCLUDED THAT THE FIRM FAILEDTO ACCEPT OR DECLINE IN THE FINRA/NASDAQ TRADE REPORTINGFACILITY (FNTRF) TRANSACTIONS IN REPORTABLE SECURITIES WITHIN 20MINUTES AFTER EXECUTION, AS THE ORDER ENTRY IDENTIFIER (OEID).







Initiated By: FINRA


Other


N/A





WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT THE FIRMFAILED TO TIMELY REPORT TO ORDER AUDIT TRAIL SYSTEM (OATS)REPORTABLE ORDER EVENTS (ROES) AND TRANSMITTED TO OATSEXECUTION OR COMBINED ORDER/EXECUTION REPORTS THATCONTAINED INACCURATE, INCOMPLETE, OR IMPROPERLY FORMATTEDDATA THAT OATS WAS UNABLE TO LINK TO THE RELATED TRADE REPORTSIN A FINRA TRADE REPORTING SYSTEM. THE FINDINGS STATED THAT THEFIRM SUBMITTED COMBINED ORDER/EXECUTION REPORTS FOR ORDERSTHAT WERE ROUTED AWAY FOR EXECUTION AND FAILED TO SUBMIT THEAPPROPRIATE REPORTING EXCEPTION CODE FOR COMBINEDORDER/EXECUTION REPORTS. THE FINDINGS ALSO STATED THAT THEFIRM TRANSMITTED TO OATS REPORTS THAT CONTAINED INACCURATE,INCOMPLETE, OR IMPROPERLY FORMATTED DATA. SPECIFICALLY, THEFIRM TRANSMITTED EXECUTION OR COMBINED ORDER/EXECUTIONREPORTS THAT CONTAINED INCORRECT REPORTING EXCEPTION CODESOF "P" WHEN THE REPORTS WERE REQUIRED TO BE MATCHED TO TRADEREPORTS AND SUBMITTED EXECUTION OR COMBINEDORDER/EXECUTION REPORTS FOR ORDERS THAT WERE ROUTED AWAYFOR EXECUTION. THE FINDINGS ALSO INCLUDED THAT THE FIRM FAILEDTO ACCEPT OR DECLINE IN THE FINRA/NASDAQ TRADE REPORTINGFACILITY (FNTRF) TRANSACTIONS IN REPORTABLE SECURITIES WITHIN 20MINUTES AFTER EXECUTION, AS THE ORDER ENTRY IDENTIFIER (OEID).


Resolution:



Regulator Statement FINE PAID IN FULL ON JULY 7, 2014.


No










Initiated By: FINRA







Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT THE FIRMFAILED TO TIMELY REPORT TO ORDER AUDIT TRAIL SYSTEM (OATS)REPORTABLE ORDER EVENTS (ROES) AND TRANSMITTED TO OATSEXECUTION OR COMBINED ORDER/EXECUTION REPORTS THATCONTAINED INACCURATE, INCOMPLETE, OR IMPROPERLY FORMATTEDDATA THAT OATS WAS UNABLE TO LINK TO THE RELATED TRADE REPORTSIN A FINRA TRADE REPORTING SYSTEM. THE FINDINGS STATED THAT THEFIRM SUBMITTED COMBINED ORDER/EXECUTION REPORTS FOR ORDERSTHAT WERE ROUTED AWAY FOR EXECUTION AND FAILED TO SUBMIT THEAPPROPRIATE REPORTING EXCEPTION CODE FOR COMBINEDORDER/EXECUTION REPORTS. THE FINDINGS ALSO STATED THAT THEFIRM TRANSMITTED TO OATS REPORTS THAT CONTAINED INACCURATE,INCOMPLETE, OR IMPROPERLY FORMATTED DATA. SPECIFICALLY, THEFIRM TRANSMITTED EXECUTION OR COMBINED ORDER/EXECUTIONREPORTS THAT CONTAINED INCORRECT REPORTING EXCEPTION CODESOF "P" WHEN THE REPORTS WERE REQUIRED TO BE MATCHED TO TRADEREPORTS AND SUBMITTED EXECUTION OR COMBINEDORDER/EXECUTION REPORTS FOR ORDERS THAT WERE ROUTED AWAYFOR EXECUTION. THE FINDINGS ALSO INCLUDED THAT THE FIRM FAILEDTO ACCEPT OR DECLINE IN THE FINRA/NASDAQ TRADE REPORTINGFACILITY (FNTRF) TRANSACTIONS IN REPORTABLE SECURITIES WITHIN 20MINUTES AFTER EXECUTION, AS THE ORDER ENTRY IDENTIFIER (OEID).



Resolution:













i









Allegations: A FINRA HEARING OFFICER CONSIDERED A STIPULATION OF FACTS ANDCONSENT TO PENALTY ENTERED INTO BETWEEN FINRA ON BEHALF OFNYSE REGULATION, INC. AND THE FIRM. WITHOUT ADMITTING ORDENYING ANY ALLEGATIONS OR FINDINGS, THE FIRM STIPULATED TO THEFACTS AND FINDINGS THAT THE FIRM IN APPROXIMATELY 4,020INSTANCES DURING THE RELEVANT PERIOD, VIOLATED NYSE MKT RULE992NY BY FAILING TO REASONABLY AVOID DISPLAYING AND ENGAGING INA PATTERN AND PRACTICE OF DISPLAYING QUOTATIONS FOR AT LEASTTHREE SECONDS THAT LOCKED OR CROSSED THE NATIONAL BEST BIDOR OFFER (NBBO) ON NYSE MKT WITHOUT TAKING CORRECTIVE ACTIONIN A TIMELY MANNER. THE FIRM, DURING THE RELEVANT PERIOD, DID NOTMAINTAIN A SUPERVISORY SYSTEM TO PREVENT OR DETECT THEINITIATION OF LOCKED AND/OR CROSSED MARKETS, IN VIOLATION OFNYSE MKT RULE 320. THE DECISION BECAME FINAL AT THE CLOSE OFBUSINESS ON JULY 7, 2014.



Resolution:


No


Decision






Other Sanctions Ordered: THE FINE WILL BE PAYABLE ON THE DATE ON WHICH THE DECISIONBECOMES FINAL. THE FIRM IS REQUIRED TO PAY THE FINE WITHIN 45DAYS OF THAT DATE, OR IT MAY FACE SUMMARY SUSPENSION, PURSUANTTO NYSE RULE 476(K).

Sanction Details: SEE ABOVE FOR SANCTIONS-










Allegations: A FINRA HEARING OFFICER CONSIDERED A STIPULATION OF FACTS ANDCONSENT TO PENALTY ENTERED INTO BETWEEN FINRA ON BEHALF OFNYSE REGULATION, INC. AND THE FIRM. WITHOUT ADMITTING ORDENYING ANY ALLEGATIONS OR FINDINGS, THE FIRM STIPULATED TO THEFACTS AND FINDINGS THAT THE FIRM IN APPROXIMATELY 4,020INSTANCES DURING THE RELEVANT PERIOD, VIOLATED NYSE MKT RULE992NY BY FAILING TO REASONABLY AVOID DISPLAYING AND ENGAGING INA PATTERN AND PRACTICE OF DISPLAYING QUOTATIONS FOR AT LEASTTHREE SECONDS THAT LOCKED OR CROSSED THE NATIONAL BEST BIDOR OFFER (NBBO) ON NYSE MKT WITHOUT TAKING CORRECTIVE ACTIONIN A TIMELY MANNER. THE FIRM, DURING THE RELEVANT PERIOD, DID NOTMAINTAIN A SUPERVISORY SYSTEM TO PREVENT OR DETECT THEINITIATION OF LOCKED AND/OR CROSSED MARKETS, IN VIOLATION OFNYSE MKT RULE 320. THEREFORE, THE FIRM IS CENSURED AND FINED$10,000. IF NO REVIEW IS REQUESTED, THE DECISION WILL BECOME FINALAT THE CLOSE OF BUSINESS ON JULY 7, 2014.










Other Sanctions Ordered: THE FINE WILL BE PAYABLE ON THE DATE ON WHICH THE DECISIONBECOMES FINAL. THE FIRM IS REQUIRED TO PAY THE FINE WITHIN 45DAYS OF THAT DATE, OR IT MAY FACE SUMMARY SUSPENSION, PURSUANTTO NYSE RULE 476(K).




i









Allegations: A FINRA HEARING OFFICER CONSIDERED AN OFFER OF SETTLEMENT ANDCONSENT ENTERED INTO BETWEEN FINRA ON BEHALF OF NYSEREGULATION, INC. AND THE FIRM. WITHOUT ADMITTING OR DENYING ANYALLEGATIONS OR FINDINGS, THE HEARING OFFICER ACCEPTED THEOFFER OF SETTLEMENT AND CONSENT AND ISSUED A DECISION. THEFIRM, IN APPROXIMATELY 15,142 INSTANCES DURING THE RELEVANTPERIOD, FAILED TO REASONABLY AVOID DISPLAYING AND ENGAGING IN APATTERN AND PRACTICE OF DISPLAYING QUOTATIONS FOR AT LEASTTHREE SECONDS THAT LOCKED OR CROSSED THE NATIONAL BEST BIDOR OFFER (NBBO) ON NYSE ARCA WITHOUT TAKING CORRECTIVE ACTIONIN A TIMELY MANNER, IN VIOLATION OF NYSE ARCA OPTION RULE 6.95.THE FIRM, AN OPTIONS TRADING PERMIT HOLDER (OTP HOLDER), DURINGTHE RELEVANT PERIOD, DID NOT MAINTAIN A SUPERVISORY SYSTEM TOPREVENT OR DETECT THE INITIATION OF LOCKED AND/OR CROSSEDMARKETS, IN VIOLATION OF NYSE ARCA OPTIONS RULE 11.18.



Resolution: Decision & Order of Offer of Settlement








Sanction Details: SEE ABOVE FOR SANCTION DETAILS -

THE FINE MUST BE PAID WITHIN 30 DAYS OF THE DATE OF THIS DECISIONOR THE FIRM MAY FACE SUSPENSION, PURSUANT TO THE TERMS OF THEDECISION AND NYSE ARCA EQUITIES RULE 11.2(A)(2)(II).


No









Allegations: A FINRA HEARING OFFICER CONSIDERED AN OFFER OF SETTLEMENT ANDCONSENT ENTERED INTO BETWEEN FINRA ON BEHALF OF NYSEREGULATION, INC. AND THE FIRM. WITHOUT ADMITTING OR DENYING ANYALLEGATIONS OR FINDINGS, THE HEARING OFFICER ACCEPTED THEOFFER OF SETTLEMENT AND CONSENT AND ISSUED A DECISION. THEFIRM, IN APPROXIMATELY 15,142 INSTANCES DURING THE RELEVANTPERIOD, FAILED TO REASONABLY AVOID DISPLAYING AND ENGAGING IN APATTERN AND PRACTICE OF DISPLAYING QUOTATIONS FOR AT LEASTTHREE SECONDS THAT LOCKED OR CROSSED THE NATIONAL BEST BIDOR OFFER (NBBO) ON NYSE ARCA WITHOUT TAKING CORRECTIVE ACTIONIN A TIMELY MANNER, IN VIOLATION OF NYSE ARCA OPTION RULE 6.95.THE FIRM, AN OPTIONS TRADING PERMIT HOLDER (OTP HOLDER), DURINGTHE RELEVANT PERIOD, DID NOT MAINTAIN A SUPERVISORY SYSTEM TOPREVENT OR DETECT THE INITIATION OF LOCKED AND/OR CROSSEDMARKETS, IN VIOLATION OF NYSE ARCA OPTIONS RULE 11.18.










Resolution:


Sanction Details: SEE ABOVE FOR SANCTION DETAILS - THE FINE MUST BE PAID WITHIN 30DAYS OF THE DATE OF THIS DECISION OR THE FIRM MAY FACESUSPENSION, PURSUANT TO THE TERMS OF THE DECISION AND NYSEARCA EQUITIES RULE 11.2(A)(2)(II).




i





Allegations: A FINRA HEARING OFFICER CONSIDERED AN OFFER OF SETTLEMENT ANDCONSENT ENTERED INTO BETWEEN FINRA ON BEHALF OF NYSEREGULATION, INC. AND THE FIRM. WITHOUT ADMITTING OR DENYING ANYALLEGATIONS OR FINDINGS, THE HEARING OFFICER ACCEPTED THEOFFER OF SETTLEMENT AND CONSENT AND ISSUED A DECISION. THEFIRM IN APPROXIMATELY 30,000 INSTANCES VIOLATED NYSE ARCAEQUITIES RULE 7.23(A)(1)(B) BY FAILING TO ENTER AND MAINTAINCONTINUOUS, TWO-SIDED TRADING INTEREST WITHIN THE REQUIREDDESIGNATED PERCENTAGES ABOVE AND BELOW THE NATIONAL BEST BID("NBB") AND NATIONAL BEST OFFER ("NBO") (COLLECTIVELY "NBBO") ASREQUIRED BY THE RULE. THE FIRM VIOLATED NYSE AREA EQUITIESRULES 6.18(B) AND (C) BY FAILING TO REASONABLY SUPERVISE THEACTIVITIES OF ITS ASSOCIATED PERSONS AND THE OPERATION OF ITSBUSINESS, IN THAT THE FIRM DID NOT ESTABLISH AND MAINTAINADEQUATE SUPERVISORY PROCEDURES, INCLUDING WRITTENPROCEDURES AND A REASONABLE SYSTEM OF FOLLOW-UP AND REVIEW,THAT WERE REASONABLY DESIGNED TO ENSURE COMPLIANCE WITHNYSE AREA EQUITIES RULE 7.23.












Resolution:


Sanction Details: SEE ABOVE FOR SANCTION DETAILS -

THE FINE MUST BE PAID WITHIN 30 DAYS OF THE DATE OF THIS DECISIONOR THE FIRM MAY FACE SUSPENSION, PURSUANT TO THE TERMS OF THEDECISION AND NYSE ARCA EQUITIES RULE 11.2(A)(2)(II).


No




Allegations: A FINRA HEARING OFFICER CONSIDERED AN OFFER OF SETTLEMENT ANDCONSENT ENTERED INTO BETWEEN FINRA ON BEHALF OF NYSEREGULATION, INC. AND THE FIRM. WITHOUT ADMITTING OR DENYING ANYALLEGATIONS OR FINDINGS, THE HEARING OFFICER ACCEPTED THEOFFER OF SETTLEMENT AND CONSENT AND ISSUED A DECISION THATPROVIDES: (1) THE FIRM IN APPROXIMATELY 30,000 INSTANCES VIOLATEDNYSE ARCA EQUITIES RULE 7.23(A)(1)(B) BY FAILING TO ENTER ANDMAINTAIN CONTINUOUS, TWO-SIDED TRADING INTEREST WITHIN THEREQUIRED DESIGNATED PERCENTAGES ABOVE AND BELOW THENATIONAL BEST BID ("NBB") AND NATIONAL BEST OFFER ("NBO")(COLLECTIVELY "NBBO") AS REQUIRED BY THE RULE; AND (2) THE FIRMVIOLATED NYSE ARCA EQUITIES RULES 6.18(B) AND (C) BY FAILING TOREASONABLY SUPERVISE THE ACTIVITIES OF ITS ASSOCIATED PERSONSAND THE OPERATION OF ITS BUSINESS, IN THAT THE FIRM DID NOTESTABLISH AND MAINTAIN ADEQUATE SUPERVISORY PROCEDURES,INCLUDING WRITTEN PROCEDURES AND A REASONABLE SYSTEM OFFOLLOW-UP AND REVIEW, THAT WERE REASONABLY DESIGNED TOENSURE COMPLIANCE WITH NYSE ARCA EQUITIES RULE 7.23.














A FINRA HEARING OFFICER CONSIDERED AN OFFER OF SETTLEMENT ANDCONSENT ENTERED INTO BETWEEN FINRA ON BEHALF OF NYSEREGULATION, INC. AND THE FIRM. WITHOUT ADMITTING OR DENYING ANYALLEGATIONS OR FINDINGS, THE HEARING OFFICER ACCEPTED THEOFFER OF SETTLEMENT AND CONSENT AND ISSUED A DECISION THATPROVIDES: (1) THE FIRM IN APPROXIMATELY 30,000 INSTANCES VIOLATEDNYSE ARCA EQUITIES RULE 7.23(A)(1)(B) BY FAILING TO ENTER ANDMAINTAIN CONTINUOUS, TWO-SIDED TRADING INTEREST WITHIN THEREQUIRED DESIGNATED PERCENTAGES ABOVE AND BELOW THENATIONAL BEST BID ("NBB") AND NATIONAL BEST OFFER ("NBO")(COLLECTIVELY "NBBO") AS REQUIRED BY THE RULE; AND (2) THE FIRMVIOLATED NYSE ARCA EQUITIES RULES 6.18(B) AND (C) BY FAILING TOREASONABLY SUPERVISE THE ACTIVITIES OF ITS ASSOCIATED PERSONSAND THE OPERATION OF ITS BUSINESS, IN THAT THE FIRM DID NOTESTABLISH AND MAINTAIN ADEQUATE SUPERVISORY PROCEDURES,INCLUDING WRITTEN PROCEDURES AND A REASONABLE SYSTEM OFFOLLOW-UP AND REVIEW, THAT WERE REASONABLY DESIGNED TOENSURE COMPLIANCE WITH NYSE ARCA EQUITIES RULE 7.23.


Resolution:


Sanction Details: SEE ABOVE FOR SANCTION DETAILS - THE FINE MUST BE PAID WITHIN 30DAYS OF THE DATE OF THIS DECISION OR THE FIRM MAY FACESUSPENSION, PURSUANT TO THE TERMS OF THE DECISION AND NYSEARCA EQUITIES RULE 11.2(A)(2)(II).




i


Initiated By: CHICAGO BOARD OPTIONS EXCHANGE


Allegations: CREDIT SUISSE SECURITIES (USA) LLC ("CREDIT SUISSE"), AN EXCHANGETPH ORGANIZATION, WAS CENSURED AND FINED $2,500 FOR THEFOLLOWING CONDUCT. CREDIT SUISSE FAILED TO REGISTER ONEASSOCIATED PERSON AS A PROPRIETARY TRADER (PT) WITH THEEXCHANGE IN WEBCRD BY NOVEMBER 5, 2011. (EXCHANGE RULE 3.6A -QUALIFICATION AND REGISTRATION OF TRADING PERMIT HOLDERS ANDASSOCIATED PERSONS )















Resolution:


Sanction Details: A $2,500 FINE AND A CENSURE.




Initiated By: CBOE







Allegations: IT IS ALLEGED THAT CREDIT SUISSE FAILED TO REGISTER ONEASSOCIATED PERSON AS A PROPRIETARY TRADER(PT) WITH THEEXCHANGE IN WEBCRD BY NOVEMBER 5, 2011. (VIOLATION OF EXCHANGERULE 3.6A)












Firm Statement FOLLOWING A CBOE OPTIONS EXAM FINDING, CBOE CONCLUDED THATCSSU FAILED TO REGISTER ONE ASSOCIATED PERSON AS APROPRIETARY TRADER WITH THE EXCHANGE IN WEBCRD.



i


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS THAT ITVIOLATED NYSE RULE 92(A) BY ENTERING A PROPRIETARY ORDER TO BUYOR SELL AN NYSE-LISTED SECURITY WHILE KNOWINGLY IN POSSESSIONOF A CUSTOMER ORDER TO BUY OR SELL SUCH SECURITY THAT COULDBE EXECUTED AT THE SAME PRICE, AND WHICH PROPRIETARY ORDERTHEN TRADED ALONG WITH, OR AHEAD OF, THE CUSTOMER ORDER, ORTRADED OUTSIDE OF THE CUSTOMER'S CONSENT PARAMETERS. THEFIRM ENTERED A RISKLESS PRINCIPAL TRANSACTION RELYING UPON THEEXCEPTION SET FORTH IN NYSE RULE 92(C), BUT DID NOT MAINTAINADEQUATE WRITTEN SUPERVISORY POLICIES AND PROCEDURES ASREQUIRED BY NYSE RULE 92(C)(5) TO ASSURE THAT THE RISKLESSPRINCIPAL TRANSACTION COMPLIED WITH APPLICABLE NYSE RULES.SPECIFICALLY, WITH REGARD TO THE RISKLESS PRINCIPAL TRANSACTIONABOVE, THE FIRM DID NOT MAINTAIN WRITTEN SUPERVISORY POLICIESAND PROCEDURES THAT REQUIRED THAT THE OFFSETTINGTRANSACTIONS WERE ALLOCATED TO A CUSTOMER ACCOUNT IN AMANNER CONSISTENT WITH NYSE RULE 92(C)(5). THE FIRM VIOLATEDNYSE RULE 92(A) BY ENTERING A PROPRIETARY ORDER TO BUY OR SELLAN NYSE-LISTED SECURITY WHILE KNOWINGLY IN POSSESSION OF ACUSTOMER ORDER TO BUY OR SELL SUCH SECURITY THAT COULD BEEXECUTED AT THE SAME PRICE, AND WHICH PROPRIETARY ORDER THENTRADED ALONG WITH, OR AHEAD OF, THE CUSTOMER ORDER. THE FIRMVIOLATED SECTION 11(A)(1) OF THE EXCHANGE ACT AND NYSE RULE 90(A)IN THAT IT CAUSED A MEMBER ASSOCIATED WITH THE FIRM TO EFFECTTRANSACTIONS, ON THE NYSE FLOOR, FOR AN ACCOUNT IN WHICH THEFIRM HAS AN INTEREST, AND SUCH MEMBER FAILED TO YIELD PRIORITY,PARITY, AND PRECEDENCE IN THE EXECUTION OF ORDERS FOR THEACCOUNT OF PERSONS WHO ARE NOT MEMBERS OR ASSOCIATED WITHMEMBERS OF THE NYSE. THE FIRM VIOLATED NYSE RULE 132(A), IN THATTHE FIRM SUBMITTED INACCURATE ACCOUNT TYPE INDICATORS TO THENYSE FOR COMPARISON AND/OR SETTLEMENT.









Other


N/A





WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS THAT ITVIOLATED NYSE RULE 92(A) BY ENTERING A PROPRIETARY ORDER TO BUYOR SELL AN NYSE-LISTED SECURITY WHILE KNOWINGLY IN POSSESSIONOF A CUSTOMER ORDER TO BUY OR SELL SUCH SECURITY THAT COULDBE EXECUTED AT THE SAME PRICE, AND WHICH PROPRIETARY ORDERTHEN TRADED ALONG WITH, OR AHEAD OF, THE CUSTOMER ORDER, ORTRADED OUTSIDE OF THE CUSTOMER'S CONSENT PARAMETERS. THEFIRM ENTERED A RISKLESS PRINCIPAL TRANSACTION RELYING UPON THEEXCEPTION SET FORTH IN NYSE RULE 92(C), BUT DID NOT MAINTAINADEQUATE WRITTEN SUPERVISORY POLICIES AND PROCEDURES ASREQUIRED BY NYSE RULE 92(C)(5) TO ASSURE THAT THE RISKLESSPRINCIPAL TRANSACTION COMPLIED WITH APPLICABLE NYSE RULES.SPECIFICALLY, WITH REGARD TO THE RISKLESS PRINCIPAL TRANSACTIONABOVE, THE FIRM DID NOT MAINTAIN WRITTEN SUPERVISORY POLICIESAND PROCEDURES THAT REQUIRED THAT THE OFFSETTINGTRANSACTIONS WERE ALLOCATED TO A CUSTOMER ACCOUNT IN AMANNER CONSISTENT WITH NYSE RULE 92(C)(5). THE FIRM VIOLATEDNYSE RULE 92(A) BY ENTERING A PROPRIETARY ORDER TO BUY OR SELLAN NYSE-LISTED SECURITY WHILE KNOWINGLY IN POSSESSION OF ACUSTOMER ORDER TO BUY OR SELL SUCH SECURITY THAT COULD BEEXECUTED AT THE SAME PRICE, AND WHICH PROPRIETARY ORDER THENTRADED ALONG WITH, OR AHEAD OF, THE CUSTOMER ORDER. THE FIRMVIOLATED SECTION 11(A)(1) OF THE EXCHANGE ACT AND NYSE RULE 90(A)IN THAT IT CAUSED A MEMBER ASSOCIATED WITH THE FIRM TO EFFECTTRANSACTIONS, ON THE NYSE FLOOR, FOR AN ACCOUNT IN WHICH THEFIRM HAS AN INTEREST, AND SUCH MEMBER FAILED TO YIELD PRIORITY,PARITY, AND PRECEDENCE IN THE EXECUTION OF ORDERS FOR THEACCOUNT OF PERSONS WHO ARE NOT MEMBERS OR ASSOCIATED WITHMEMBERS OF THE NYSE. THE FIRM VIOLATED NYSE RULE 132(A), IN THATTHE FIRM SUBMITTED INACCURATE ACCOUNT TYPE INDICATORS TO THENYSE FOR COMPARISON AND/OR SETTLEMENT.


Resolution:




No




Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS THAT ITVIOLATED NYSE RULE 92(A) BY ENTERING A PROPRIETARY ORDER TO BUYOR SELL AN NYSE-LISTED SECURITY WHILE KNOWINGLY IN POSSESSIONOF A CUSTOMER ORDER TO BUY OR SELL SUCH SECURITY THAT COULDBE EXECUTED AT THE SAME PRICE, AND WHICH PROPRIETARY ORDERTHEN TRADED ALONG WITH, OR AHEAD OF, THE CUSTOMER ORDER, ORTRADED OUTSIDE OF THE CUSTOMER'S CONSENT PARAMETERS. THEFIRM ENTERED A RISKLESS PRINCIPAL TRANSACTION RELYING UPON THEEXCEPTION SET FORTH IN NYSE RULE 92(C), BUT DID NOT MAINTAINADEQUATE WRITTEN SUPERVISORY POLICIES AND PROCEDURES ASREQUIRED BY NYSE RULE 92(C)(5) TO ASSURE THAT THE RISKLESSPRINCIPAL TRANSACTION COMPLIED WITH APPLICABLE NYSE RULES.SPECIFICALLY, WITH REGARD TO THE RISKLESS PRINCIPAL TRANSACTIONABOVE, THE FIRM DID NOT MAINTAIN WRITTEN SUPERVISORY POLICIESAND PROCEDURES THAT REQUIRED THAT THE OFFSETTINGTRANSACTIONS WERE ALLOCATED TO A CUSTOMER ACCOUNT IN AMANNER CONSISTENT WITH NYSE RULE 92(C)(5). THE FIRM VIOLATEDNYSE RULE 92(A) BY ENTERING A PROPRIETARY ORDER TO BUY OR SELLAN NYSE-LISTED SECURITY WHILE KNOWINGLY IN POSSESSION OF ACUSTOMER ORDER TO BUY OR SELL SUCH SECURITY THAT COULD BEEXECUTED AT THE SAME PRICE, AND WHICH PROPRIETARY ORDER THENTRADED ALONG WITH, OR AHEAD OF, THE CUSTOMER ORDER. THE FIRMVIOLATED SECTION 11(A)(1) OF THE EXCHANGE ACT AND NYSE RULE 90(A)IN THAT IT CAUSED A MEMBER ASSOCIATED WITH THE FIRM TO EFFECTTRANSACTIONS, ON THE NYSE FLOOR, FOR AN ACCOUNT IN WHICH THEFIRM HAS AN INTEREST, AND SUCH MEMBER FAILED TO YIELD PRIORITY,PARITY, AND PRECEDENCE IN THE EXECUTION OF ORDERS FOR THEACCOUNT OF PERSONS WHO ARE NOT MEMBERS OR ASSOCIATED WITHMEMBERS OF THE NYSE. THE FIRM VIOLATED NYSE RULE 132(A), IN THATTHE FIRM SUBMITTED INACCURATE ACCOUNT TYPE INDICATORS TO THENYSE FOR COMPARISON AND/OR SETTLEMENT.









Other


N/A





WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS THAT ITVIOLATED NYSE RULE 92(A) BY ENTERING A PROPRIETARY ORDER TO BUYOR SELL AN NYSE-LISTED SECURITY WHILE KNOWINGLY IN POSSESSIONOF A CUSTOMER ORDER TO BUY OR SELL SUCH SECURITY THAT COULDBE EXECUTED AT THE SAME PRICE, AND WHICH PROPRIETARY ORDERTHEN TRADED ALONG WITH, OR AHEAD OF, THE CUSTOMER ORDER, ORTRADED OUTSIDE OF THE CUSTOMER'S CONSENT PARAMETERS. THEFIRM ENTERED A RISKLESS PRINCIPAL TRANSACTION RELYING UPON THEEXCEPTION SET FORTH IN NYSE RULE 92(C), BUT DID NOT MAINTAINADEQUATE WRITTEN SUPERVISORY POLICIES AND PROCEDURES ASREQUIRED BY NYSE RULE 92(C)(5) TO ASSURE THAT THE RISKLESSPRINCIPAL TRANSACTION COMPLIED WITH APPLICABLE NYSE RULES.SPECIFICALLY, WITH REGARD TO THE RISKLESS PRINCIPAL TRANSACTIONABOVE, THE FIRM DID NOT MAINTAIN WRITTEN SUPERVISORY POLICIESAND PROCEDURES THAT REQUIRED THAT THE OFFSETTINGTRANSACTIONS WERE ALLOCATED TO A CUSTOMER ACCOUNT IN AMANNER CONSISTENT WITH NYSE RULE 92(C)(5). THE FIRM VIOLATEDNYSE RULE 92(A) BY ENTERING A PROPRIETARY ORDER TO BUY OR SELLAN NYSE-LISTED SECURITY WHILE KNOWINGLY IN POSSESSION OF ACUSTOMER ORDER TO BUY OR SELL SUCH SECURITY THAT COULD BEEXECUTED AT THE SAME PRICE, AND WHICH PROPRIETARY ORDER THENTRADED ALONG WITH, OR AHEAD OF, THE CUSTOMER ORDER. THE FIRMVIOLATED SECTION 11(A)(1) OF THE EXCHANGE ACT AND NYSE RULE 90(A)IN THAT IT CAUSED A MEMBER ASSOCIATED WITH THE FIRM TO EFFECTTRANSACTIONS, ON THE NYSE FLOOR, FOR AN ACCOUNT IN WHICH THEFIRM HAS AN INTEREST, AND SUCH MEMBER FAILED TO YIELD PRIORITY,PARITY, AND PRECEDENCE IN THE EXECUTION OF ORDERS FOR THEACCOUNT OF PERSONS WHO ARE NOT MEMBERS OR ASSOCIATED WITHMEMBERS OF THE NYSE. THE FIRM VIOLATED NYSE RULE 132(A), IN THATTHE FIRM SUBMITTED INACCURATE ACCOUNT TYPE INDICATORS TO THENYSE FOR COMPARISON AND/OR SETTLEMENT.


Resolution:






i








Initiated By: FINRA




Other Product Type(s): TRACE-ELIGIBLE CORPORATE SECURITIES

Allegations: FINRA RULES 2010, 6730, 6730(A), 6730(B), 6730(B)(1), 6730(C)(6),6730(D)(4)(D) - CREDIT SUISSE SECURITIES (USA) LLC, DURING AMISMATCH REVIEW PERIOD, FAILED TO REPORT TO THE TRADEREPORTING AND COMPLIANCE ENGINE (TRACE) THE CORRECT CONTRA-PARTY'S IDENTIFIER FOR S1 TRANSACTIONS IN TRACE-ELIGIBLECORPORATE SECURITIES. DURING LATE REVIEW PERIODS, THE FIRMFAILED TO REPORT TO TRACE S1 TRANSACTIONS IN TRACE-ELIGIBLECORPORATE SECURITIES WITHIN 15 MINUTES OF THE EXECUTION TIME.THIS CONDUCT CONSTITUTES SEPARATE AND DISTINCT VIOLATIONS OFFINRA RULE 6730(A) AND A PATTERN OR PRACTICE OF LATE REPORTINGWITHOUT EXCEPTIONAL CIRCUMSTANCES IN VIOLATION OF FINRA RULE2010. THE FIRM FAILED TO REPORT TO TRACE P1 TRANSACTIONS INTRACE-ELIGIBLE CORPORATE SECURITIES BY THE NEXT BUSINESS DAY(T+1) AFTER EXECUTION. THIS CONDUCT CONSTITUTES SEPARATE ANDDISTINCT VIOLATIONS OF FINRA RULE 6730(A) AND A PATTERN ORPRACTICE OF LATE REPORTING WITHOUT EXCEPTIONALCIRCUMSTANCES IN VIOLATION OF FINRA RULE 2010. THE FIRMREPORTED TO TRACE TRANSACTIONS IN TRACE-ELIGIBLE SECURITIES ITWAS NOT REQUIRED TO REPORT. IN LATE REVIEW AND AGENCYMISMATCH REVIEW PERIODS, THE FIRM FAILED TO REPORT TO TRACETHE CORRECT MARKET IDENTIFIER FOR SOME S1 AND P1 TRANSACTIONSIN TRACE-ELIGIBLE CORPORATE AND AGENCY SECURITIES. DURING ANAGENCY MISMATCH REVIEW PERIOD, THE FIRM FAILED TO REPORT TOTRACE THE CORRECT CONTRA-PARTY'S IDENTIFIER FOR S1 AND P1TRANSACTIONS IN TRACE-ELIGIBLE CORPORATE SECURITIES. DURING ANAGENCY MISMATCH PERIOD, THE FIRM FAILED TO REPORT TO TRACESOME P1 TRANSACTIONS IN TRACE-ELIGIBLE AGENCY SECURITIES THATIT WAS REQUIRED TO REPORT. DURING AN AGENCY MISMATCH PERIOD,THE FIRM DOUBLE REPORTED TO TRACE ONE TRANSACTION IN A TRACE-ELIGIBLE AGENCY SECURITY AND REPORTED TRANSACTIONS TO TRACEIN TRACE-ELIGIBLE AGENCY SECURITIES IT WAS NOT REQUIRED TOREPORT. DURING A CORPORATE MISMATCH REVIEW PERIOD, THE FIRMFAILED TO REPORT S1 TRANSACTIONS TO TRACE IN TRACE-ELIGIBLESECURITIES IT WAS REQUIRED TO REPORT.












Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED AND FINED $110,000. FINE PAID INFULL 10/08/13.


No




Allegations: FINRA RULES 2010, 6730, 6730(A), 6730(B), 6730(B)(1), 6730(C)(6),6730(D)(4)(D) - CREDIT SUISSE SECURITIES (USA) LLC, DURING AMISMATCH REVIEW PERIOD, FAILED TO REPORT TO THE TRADEREPORTING AND COMPLIANCE ENGINE (TRACE) THE CORRECT CONTRA-PARTY'S IDENTIFIER FOR S1 TRANSACTIONS IN TRACE-ELIGIBLECORPORATE SECURITIES. DURING LATE REVIEW PERIODS, THE FIRMFAILED TO REPORT TO TRACE S1 TRANSACTIONS IN TRACE-ELIGIBLECORPORATE SECURITIES WITHIN 15 MINUTES OF THE EXECUTION TIME.THIS CONDUCT CONSTITUTES SEPARATE AND DISTINCT VIOLATIONS OFFINRA RULE 6730(A) AND A PATTERN OR PRACTICE OF LATE REPORTINGWITHOUT EXCEPTIONAL CIRCUMSTANCES IN VIOLATION OF FINRA RULE2010. THE FIRM FAILED TO REPORT TO TRACE P1 TRANSACTIONS INTRACE-ELIGIBLE CORPORATE SECURITIES BY THE NEXT BUSINESS DAY(T+1) AFTER EXECUTION. THIS CONDUCT CONSTITUTES SEPARATE ANDDISTINCT VIOLATIONS OF FINRA RULE 6730(A) AND A PATTERN ORPRACTICE OF LATE REPORTING WITHOUT EXCEPTIONALCIRCUMSTANCES IN VIOLATION OF FINRA RULE 2010. THE FIRMREPORTED TO TRACE TRANSACTIONS IN TRACE-ELIGIBLE SECURITIES ITWAS NOT REQUIRED TO REPORT. IN LATE REVIEW AND AGENCYMISMATCH REVIEW PERIODS, THE FIRM FAILED TO REPORT TO TRACETHE CORRECT MARKET IDENTIFIER FOR SOME S1 AND P1 TRANSACTIONSIN TRACE-ELIGIBLE CORPORATE AND AGENCY SECURITIES. DURING ANAGENCY MISMATCH REVIEW PERIOD, THE FIRM FAILED TO REPORT TOTRACE THE CORRECT CONTRA-PARTY'S IDENTIFIER FOR S1 AND P1TRANSACTIONS IN TRACE-ELIGIBLE CORPORATE SECURITIES. DURING ANAGENCY MISMATCH PERIOD, THE FIRM FAILED TO REPORT TO TRACESOME P1 TRANSACTIONS IN TRACE-ELIGIBLE AGENCY SECURITIES THATIT WAS REQUIRED TO REPORT. DURING AN AGENCY MISMATCH PERIOD,THE FIRM DOUBLE REPORTED TO TRACE ONE TRANSACTION IN A TRACE-ELIGIBLE AGENCY SECURITY AND REPORTED TRANSACTIONS TO TRACEIN TRACE-ELIGIBLE AGENCY SECURITIES IT WAS NOT REQUIRED TOREPORT. DURING A CORPORATE MISMATCH REVIEW PERIOD, THE FIRMFAILED TO REPORT S1 TRANSACTIONS TO TRACE IN TRACE-ELIGIBLESECURITIES IT WAS REQUIRED TO REPORT.







Initiated By: FINRA







FINRA RULES 2010, 6730, 6730(A), 6730(B), 6730(B)(1), 6730(C)(6),6730(D)(4)(D) - CREDIT SUISSE SECURITIES (USA) LLC, DURING AMISMATCH REVIEW PERIOD, FAILED TO REPORT TO THE TRADEREPORTING AND COMPLIANCE ENGINE (TRACE) THE CORRECT CONTRA-PARTY'S IDENTIFIER FOR S1 TRANSACTIONS IN TRACE-ELIGIBLECORPORATE SECURITIES. DURING LATE REVIEW PERIODS, THE FIRMFAILED TO REPORT TO TRACE S1 TRANSACTIONS IN TRACE-ELIGIBLECORPORATE SECURITIES WITHIN 15 MINUTES OF THE EXECUTION TIME.THIS CONDUCT CONSTITUTES SEPARATE AND DISTINCT VIOLATIONS OFFINRA RULE 6730(A) AND A PATTERN OR PRACTICE OF LATE REPORTINGWITHOUT EXCEPTIONAL CIRCUMSTANCES IN VIOLATION OF FINRA RULE2010. THE FIRM FAILED TO REPORT TO TRACE P1 TRANSACTIONS INTRACE-ELIGIBLE CORPORATE SECURITIES BY THE NEXT BUSINESS DAY(T+1) AFTER EXECUTION. THIS CONDUCT CONSTITUTES SEPARATE ANDDISTINCT VIOLATIONS OF FINRA RULE 6730(A) AND A PATTERN ORPRACTICE OF LATE REPORTING WITHOUT EXCEPTIONALCIRCUMSTANCES IN VIOLATION OF FINRA RULE 2010. THE FIRMREPORTED TO TRACE TRANSACTIONS IN TRACE-ELIGIBLE SECURITIES ITWAS NOT REQUIRED TO REPORT. IN LATE REVIEW AND AGENCYMISMATCH REVIEW PERIODS, THE FIRM FAILED TO REPORT TO TRACETHE CORRECT MARKET IDENTIFIER FOR SOME S1 AND P1 TRANSACTIONSIN TRACE-ELIGIBLE CORPORATE AND AGENCY SECURITIES. DURING ANAGENCY MISMATCH REVIEW PERIOD, THE FIRM FAILED TO REPORT TOTRACE THE CORRECT CONTRA-PARTY'S IDENTIFIER FOR S1 AND P1TRANSACTIONS IN TRACE-ELIGIBLE CORPORATE SECURITIES. DURING ANAGENCY MISMATCH PERIOD, THE FIRM FAILED TO REPORT TO TRACESOME P1 TRANSACTIONS IN TRACE-ELIGIBLE AGENCY SECURITIES THATIT WAS REQUIRED TO REPORT. DURING AN AGENCY MISMATCH PERIOD,THE FIRM DOUBLE REPORTED TO TRACE ONE TRANSACTION IN A TRACE-ELIGIBLE AGENCY SECURITY AND REPORTED TRANSACTIONS TO TRACEIN TRACE-ELIGIBLE AGENCY SECURITIES IT WAS NOT REQUIRED TOREPORT. DURING A CORPORATE MISMATCH REVIEW PERIOD, THE FIRMFAILED TO REPORT S1 TRANSACTIONS TO TRACE IN TRACE-ELIGIBLESECURITIES IT WAS REQUIRED TO REPORT.


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED AND FINED $110,000.




i








Initiated By: FINRA







Allegations: FINRA RULES 2010, 2360(B)(3), 2360(B)(3)(A)(VII)(B), 2360(B)(5), NASD RULE3010 - CREDIT SUISSE SECURITIES (USA) LLC EFFECTED OPENINGTRANSACTIONS FOR CUSTOMER AND/OR PROPRIETARY ACCOUNTS THATEXCEEDED THE APPLICABLE POSITION LIMIT IN DIFFERENT OVER-THE-COUNTER (OTC) OPTIONS, RANGING FROM APPROXIMATELY 119 PERCENTTO 229 PERCENT OVER THE APPLICABLE LIMIT AND FROM SEVEN TO 25TRADE DATES IN DURATION. THE FIRM FAILED TO REPORT AND/ORINACCURATELY REPORTED TO THE LARGE OPTIONS POSITIONS REPORT(LOPR) POSITIONS IN DIFFERENT OTC OPTIONS, RANGING FROM ONE TO146 TRADE DATES IN DURATION. IN ONE INSTANCE, THE FIRM EFFECTEDOPENING TRANSACTIONS FOR A CUSTOMER ACCOUNT THAT EXCEEDEDTHE APPLICABLE POSITION LIMIT IN AN OTC OPTION, AT APPROXIMATELY574 PERCENT OVER THE APPLICABLE LIMIT FOR SOME TRADE DATES. FORA YEAR, THE FIRM FAILED TO REPORT ITS OPTIONS CONTRACTEQUIVALENT OF THE NET DELTA (OCEND) POSITION. THE FIRMINACCURATELY OVER-REPORTED TO THE LOPR OVER 1.2 MILLION OTCOPTIONS POSITIONS DUE TO THE ENTRY OF AN INCORRECT CONTRACTMULTIPLIER IN A STATIC DATA FIELD. THE FIRM EFFECTED OPENINGTRANSACTIONS FOR CUSTOMER AND/OR PROPRIETARY ACCOUNTS THATEXCEEDED THE APPLICABLE POSITION LIMIT IN TWO DIFFERENT OTCOPTIONS, RANGING FROM APPROXIMATELY 36 PERCENT TO 379 PERCENTOVER THE APPLICABLE LIMIT AND FROM TWO TO 36 TRADE DATES INDURATION. THE FIRM FAILED TO ESTABLISH AND MAINTAIN A SYSTEMREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLESECURITIES LAWS, REGULATIONS AND FINRA RULES CONCERNINGPOSITION LIMITS AND THE REPORTING OF OTC OPTIONS POSITIONS TOTHE LOPR. THE FIRM'S SUPERVISORY SYSTEM DID NOT INCLUDEWRITTEN SUPERVISORY PROCEDURES PROVIDING FOR THE REPORTINGOF OTC OPTIONS POSITIONS TO THE LOPR.









Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED AND FINED $200,000. FINE PAID INFULL ON JULY 31, 2013.


No




Allegations: FINRA RULES 2010, 2360(B)(3), 2360(B)(3)(A)(VII)(B), 2360(B)(5), NASD RULE3010 - CREDIT SUISSE SECURITIES (USA) LLC EFFECTED OPENINGPOSITIONS FOR CUSTOMER AND/OR PROPRIETARY ACCOUNTS THATEXCEEDED THE APPLICABLE POSITION LIMIT IN DIFFERENT OVER-THE-COUNTER (OTC) OPTIONS, RANGING FROM APPROXIMATELY 119 PERCENTTO 229 PERCENT OVER THE APPLICABLE LIMIT AND FROM SEVEN TO 25TRADE DATES IN DURATION. THE FIRM FAILED TO REPORT AND/ORINACCURATELY REPORTED TO THE LARGE OPTIONS POSITIONS REPORT(LOPR) POSITIONS IN DIFFERENT OTC OPTIONS, RANGING FROM ONE TO146 TRADE DATES IN DURATION. IN ONE INSTANCE, THE FIRM EFFECTEDOPENING TRANSACTIONS FOR A CUSTOMER ACCOUNT THAT EXCEEDEDTHE APPLICABLE POSITION LIMIT IN AN OTC OPTION, AT APPROXIMATELY574 PERCENT OVER THE APPLICABLE LIMIT FOR SOME TRADE DATES. FORA YEAR, THE FIRM FAILED TO REPORT ITS OPTIONS CONTRACTEQUIVALENT OF THE NET DELTA (OCEND) POSITION. THE FIRMINACCURATELY OVER-REPORTED TO THE LOPR OVER 1.2 MILLION OTCOPTIONS POSITIONS DUE TO THE ENTRY OF AN INCORRECT CONTRACTMULTIPLIER IN A STATIC DATA FIELD. THE FIRM EFFECTED OPENINGTRANSACTIONS FOR CUSTOMER AND/OR PROPRIETARY ACCOUNTS THATEXCEEDED THE APPLICABLE POSITION LIMIT IN TWO DIFFERENT OTCOPTIONS, RANGING FROM APPROXIMATELY 36 PERCENT TO 379 PERCENTOVER THE APPLICABLE LIMIT AND FROM TWO TO 36 TRADE DATES INDURATION. THE FIRM FAILED TO ESTABLISH AND MAINTAIN A SYSTEMREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLESECURITIES LAWS, REGULATIONS AND FINRA RULES CONCERNINGPOSITION LIMITS AND THE REPORTING OF OTC OPTIONS POSITIONS TOTHE LOPR. THE FIRM'S SUPERVISORY SYSTEM DID NOT INCLUDEWRITTEN SUPERVISORY PROCEDURES PROVIDING FOR THE REPORTINGOF OTC OPTIONS POSITIONS TO THE LOPR.







Initiated By: FINRA







FINRA RULES 2010, 2360(B)(3), 2360(B)(3)(A)(VII)(B), 2360(B)(5), NASD RULE3010 - CREDIT SUISSE SECURITIES (USA) LLC EFFECTED OPENINGPOSITIONS FOR CUSTOMER AND/OR PROPRIETARY ACCOUNTS THATEXCEEDED THE APPLICABLE POSITION LIMIT IN DIFFERENT OVER-THE-COUNTER (OTC) OPTIONS, RANGING FROM APPROXIMATELY 119 PERCENTTO 229 PERCENT OVER THE APPLICABLE LIMIT AND FROM SEVEN TO 25TRADE DATES IN DURATION. THE FIRM FAILED TO REPORT AND/ORINACCURATELY REPORTED TO THE LARGE OPTIONS POSITIONS REPORT(LOPR) POSITIONS IN DIFFERENT OTC OPTIONS, RANGING FROM ONE TO146 TRADE DATES IN DURATION. IN ONE INSTANCE, THE FIRM EFFECTEDOPENING TRANSACTIONS FOR A CUSTOMER ACCOUNT THAT EXCEEDEDTHE APPLICABLE POSITION LIMIT IN AN OTC OPTION, AT APPROXIMATELY574 PERCENT OVER THE APPLICABLE LIMIT FOR SOME TRADE DATES. FORA YEAR, THE FIRM FAILED TO REPORT ITS OPTIONS CONTRACTEQUIVALENT OF THE NET DELTA (OCEND) POSITION. THE FIRMINACCURATELY OVER-REPORTED TO THE LOPR OVER 1.2 MILLION OTCOPTIONS POSITIONS DUE TO THE ENTRY OF AN INCORRECT CONTRACTMULTIPLIER IN A STATIC DATA FIELD. THE FIRM EFFECTED OPENINGTRANSACTIONS FOR CUSTOMER AND/OR PROPRIETARY ACCOUNTS THATEXCEEDED THE APPLICABLE POSITION LIMIT IN TWO DIFFERENT OTCOPTIONS, RANGING FROM APPROXIMATELY 36 PERCENT TO 379 PERCENTOVER THE APPLICABLE LIMIT AND FROM TWO TO 36 TRADE DATES INDURATION. THE FIRM FAILED TO ESTABLISH AND MAINTAIN A SYSTEMREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLESECURITIES LAWS, REGULATIONS AND FINRA RULES CONCERNINGPOSITION LIMITS AND THE REPORTING OF OTC OPTIONS POSITIONS TOTHE LOPR. THE FIRM'S SUPERVISORY SYSTEM DID NOT INCLUDEWRITTEN SUPERVISORY PROCEDURES PROVIDING FOR THE REPORTINGOF OTC OPTIONS POSITIONS TO THE LOPR.


Resolution:






i


Allegations: NYSE ARCA EQUITIES RULES 6-1, 6.18 - CREDIT SUISSE SECURITIES (USA)LLC FAILED TO ESTABLISH AND MAINTAIN A SYSTEM TO SUPERVISE THETRADING ACTIVITY OF TWO OF ITS PROPRIETARY ELECTRONIC TRADINGSYSTEMS THAT WAS REASONABLY DESIGNED TO ACHIEVE COMPLIANCEWITH APPLICABLE SECURITIES LAWS, REGULATIONS AND NYSE ARCARULES CONCERNING THE DETECTION OF PURCHASE AND SALETRANSACTIONS THAT RESULTED IN NO CHANGE OF BENEFICIALOWNERSHIP. THE FIRM FAILED TO PROPERLY SUPERVISE ANDADEQUATELY MONITOR THE TRADING ACTIVITY OF THE PROPRIETARYELECTRONIC TRADING SYSTEMS RELATED TO THE PREVENTION OFEXCHANGE-LEVEL CROSSES. THE FIRM'S SUPERVISORY SYSTEM FAILEDTO ALERT THE APPROPRIATE INDIVIDUALS AS TO THE QUANTITY ANDFREQUENCY WITH WHICH EXCHANGE-LEVEL CROSSES OF ORDERSGENERATED BY THE ELECTRONIC TRADING SYSTEMS WERE OCCURRING.THE FIRM FAILED TO ESTABLISH, MAINTAIN AND ENFORCE REASONABLEWRITTEN SUPERVISORY PROCEDURES (WSPS) RELATED TO THESUPERVISION OF THE TRADING ACTIVITY GENERATED BY ITSPROPRIETARY ELECTRONIC TRADING SYSTEMS. THE FIRM DID HAVEWSPS RELATED GENERALLY TO MONITORING THE TRADING ACTIVITYGENERATED BY PROPRIETARY ELECTRONIC TRADING SYSTEMS, BUT THEPROCEDURES WERE NOT ADEQUATELY TAILORED TO IDENTIFYINGPOTENTIAL EXCHANGE-LEVEL CROSSES. THE FIRM FAILED TO PROVIDEADEQUATE DOCUMENTARY EVIDENCE OF SUPERVISORY REVIEWSCONDUCTED ON THE TRADING ACTIVITY GENERATED BY THEPROPRIETARY ELECTRONIC TRADING SYSTEMS.















NYSE ARCA EQUITIES RULES 6-1, 6.18 - CREDIT SUISSE SECURITIES (USA)LLC FAILED TO ESTABLISH AND MAINTAIN A SYSTEM TO SUPERVISE THETRADING ACTIVITY OF TWO OF ITS PROPRIETARY ELECTRONIC TRADINGSYSTEMS THAT WAS REASONABLY DESIGNED TO ACHIEVE COMPLIANCEWITH APPLICABLE SECURITIES LAWS, REGULATIONS AND NYSE ARCARULES CONCERNING THE DETECTION OF PURCHASE AND SALETRANSACTIONS THAT RESULTED IN NO CHANGE OF BENEFICIALOWNERSHIP. THE FIRM FAILED TO PROPERLY SUPERVISE ANDADEQUATELY MONITOR THE TRADING ACTIVITY OF THE PROPRIETARYELECTRONIC TRADING SYSTEMS RELATED TO THE PREVENTION OFEXCHANGE-LEVEL CROSSES. THE FIRM'S SUPERVISORY SYSTEM FAILEDTO ALERT THE APPROPRIATE INDIVIDUALS AS TO THE QUANTITY ANDFREQUENCY WITH WHICH EXCHANGE-LEVEL CROSSES OF ORDERSGENERATED BY THE ELECTRONIC TRADING SYSTEMS WERE OCCURRING.THE FIRM FAILED TO ESTABLISH, MAINTAIN AND ENFORCE REASONABLEWRITTEN SUPERVISORY PROCEDURES (WSPS) RELATED TO THESUPERVISION OF THE TRADING ACTIVITY GENERATED BY ITSPROPRIETARY ELECTRONIC TRADING SYSTEMS. THE FIRM DID HAVEWSPS RELATED GENERALLY TO MONITORING THE TRADING ACTIVITYGENERATED BY PROPRIETARY ELECTRONIC TRADING SYSTEMS, BUT THEPROCEDURES WERE NOT ADEQUATELY TAILORED TO IDENTIFYINGPOTENTIAL EXCHANGE-LEVEL CROSSES. THE FIRM FAILED TO PROVIDEADEQUATE DOCUMENTARY EVIDENCE OF SUPERVISORY REVIEWSCONDUCTED ON THE TRADING ACTIVITY GENERATED BY THEPROPRIETARY ELECTRONIC TRADING SYSTEMS.


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING ANY ALLEGATIONS OR FINDINGS, THEFIRM SUBMITTED AN OFFER OF SETTLEMENT AND CONSENT WHICH THEHEARING OFFICER ACCEPTED; THEREFORE, THE FIRM IS CENSURED,FINED $62,500 AND SHALL REVISE ITS SUPERVISORY SYSTEM REGARDINGITS PROPRIETARY ELECTRONIC TRADING SYSTEMS RELATED TO THEPREVENTION OF EXCHANGE-LEVEL CROSSES AND THE SUPERVISION OFTHE TRADING ACTIVITY GENERATED BY ITS PROPRIETARY ELECTRONICTRADING SYSTEMS WITHIN 30 BUSINESS DAYS OF THE DATE OF THEDECISION AND CAUSE A REGISTERED FIRM PRINCIPAL TO NOTIFY FINRATHAT ITS SUPERVISORY SYSTEM HAS BEEN REVISED AND THE DATE THEREVISED PROCEDURES WERE IMPLEMENTED.


No









Regulator Statement OTHER CASE NUMBER: 13-ARCA-8









Allegations: NYSE ARCA EQUITIES RULES 6-1, 6.18 - CREDIT SUISSE SECURITIES (USA)LLC FAILED TO ESTABLISH AND MAINTAIN A SYSTEM TO SUPERVISE THETRADING ACTIVITY OF TWO OF ITS PROPRIETARY ELECTRONIC TRADINGSYSTEMS WITH RESPECT TO THE DETECTION OF PURCHASE AND SALETRANSACTIONS THAT RESULTED IN NO CHANGE OF BENEFICIALOWNERSHIP. THE FIRM FAILED TO PROPERLY SUPERVISE ANDADEQUATELY MONITOR THE TRADING ACTIVITY OF THE PROPRIETARYELECTRONIC TRADING SYSTEMS RELATED TO THE PREVENTION OFEXCHANGE-LEVEL CROSSES. THE FIRM FAILED TO ESTABLISH, MAINTAINAND ENFORCE REASONABLE WRITTEN SUPERVISORY PROCEDURES(WSPS) RELATED TO THE SUPERVISION OF THE TRADING ACTIVITYGENERATED BY ITS PROPRIETARY ELECTRONIC TRADING SYSTEMS. THEFIRM FAILED TO PROVIDE ADEQUATE DOCUMENTARY EVIDENCE OFSUPERVISORY REVIEWS CONDUCTED.









Resolution:






i


Initiated By: FINRA

Allegations: FINRA RULES 2010, 6730, 7230A(B), 7330(B), NASD RULES 2110, 6230 -CREDIT SUISSE SECURITIES (USA) LLC FAILED TO REPORT TO THE TRADEREPORTING AND COMPLIANCE ENGINE (TRACE) THE CORRECT CONTRA-PARTY'S IDENTIFIER FOR TRANSACTION IN TRACE-ELIGIBLE SECURITIES;FAILED TO REPORT TO TRACE TRANSACTIONS IN TRACE-ELIGIBLESECURITIES IT WAS REQUIRED TO REPORT; AND REPORTED TO TRACETRANSACTIONS IN TRACE-ELIGIBLE SECURITIES IT WAS NOT REQUIREDTO REPORT. THE FIRM FAILED TO REPORT TO TRACE TRANSACTIONS INTRACE-ELIGIBLE SECURITIES WITHIN 15 MINUTES OF THE EXECUTIONTIME; FAILED TO REPORT TO TRACE THE CORRECT TRADE EXECUTIONTIME FOR TRANSACTIONS IN TRACE-ELIGIBLE SECURITIES; AND DOUBLEREPORTED TO TRACE SOME TRANSACTIONS IN TRACE-ELIGIBLESECURITIES. THIS CONDUCT CONSTITUTES SEPARATE AND DISTINCTVIOLATIONS OF NASD RULE 6230 AND FINRA RULE 6730 AND A PATTERNOR PRACTICE OF LATE REPORTING IN VIOLATION OF NASD RULE 2110 ANDFINRA RULE 2010. THE FIRM FAILED TO ACCEPT OR DECLINE IN THEFINRA/NASDAQ TRADE REPORTING FACILITY (FNTRF) OR THE OTCREPORTING FACILITY TRANSACTIONS IN REPORTABLE SECURITIESWITHIN 20 MINUTES AFTER EXECUTION THAT THE FIRM HAD ANOBLIGATION TO ACCEPT OR DECLINE AS THE ORDER ENTRY IDENTIFIERDURING THE TRADE REPORTING REVIEW PERIOD.







Initiated By: FINRA






Other Product Type(s): TRACE-ELIGIBLE SECURITIES, REPORTABLE SECURITIES


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED AND FINED $92,500. FINE PAID ONMAY 30, 2013.


No




Allegations: FINRA RULES 2010, 6730, 7230A(B), 7330(B), NASD RULES 2110, 6230 -CREDIT SUISSE SECURITIES (USA) LLC FAILED TO REPORT TO THE TRADEREPORTING AND COMPLIANCE ENGINE (TRACE) THE CORRECT CONTRA-PARTY'S IDENTIFIER FOR TRANSACTION IN TRACE-ELIGIBLE SECURITIES;FAILED TO REPORT TO TRACE TRANSACTIONS IN TRACE-ELIGIBLESECURITIES IT WAS REQUIRED TO REPORT; AND REPORTED TO TRACETRANSACTIONS IN TRACE-ELIGIBLE SECURITIES IT WAS NOT REQUIREDTO REPORT. THE FIRM FAILED TO REPORT TO TRACE TRANSACTIONS INTRACE-ELIGIBLE SECURITIES WITHIN 15 MINUTES OF THE EXECUTIONTIME; FAILED TO REPORT TO TRACE THE CORRECT TRADE EXECUTIONTIME FOR TRANSACTIONS IN TRACE-ELIGIBLE SECURITIES; AND DOUBLEREPORTED TO TRACE SOME TRANSACTIONS IN TRACE-ELIGIBLESECURITIES. THIS CONDUCT CONSTITUTES SEPARATE AND DISTINCTVIOLATIONS OF NASD RULE 6230 AND FINRA RULE 6730 AND A PATTERNOR PRACTICE OF LATE REPORTING IN VIOLATION OF NASD RULE 2110 ANDFINRA RULE 2010. THE FIRM FAILED TO ACCEPT OR DECLINE IN THEFINRA/NASDAQ TRADE REPORTING FACILITY (FNTRF) OR THE OTCREPORTING FACILITY TRANSACTIONS IN REPORTABLE SECURITIESWITHIN 20 MINUTES AFTER EXECUTION THAT THE FIRM HAD ANOBLIGATION TO ACCEPT OR DECLINE AS THE ORDER ENTRY IDENTIFIERDURING THE TRADE REPORTING REVIEW PERIOD.








Initiated By: FINRA






Other Product Type(s): TRACE-ELIGIBLE SECURITIES, REPORTABLE SECURITIES

FINRA RULES 2010, 6730, 7230A(B), 7330(B), NASD RULES 2110, 6230 -CREDIT SUISSE SECURITIES (USA) LLC FAILED TO REPORT TO THE TRADEREPORTING AND COMPLIANCE ENGINE (TRACE) THE CORRECT CONTRA-PARTY'S IDENTIFIER FOR TRANSACTION IN TRACE-ELIGIBLE SECURITIES;FAILED TO REPORT TO TRACE TRANSACTIONS IN TRACE-ELIGIBLESECURITIES IT WAS REQUIRED TO REPORT; AND REPORTED TO TRACETRANSACTIONS IN TRACE-ELIGIBLE SECURITIES IT WAS NOT REQUIREDTO REPORT. THE FIRM FAILED TO REPORT TO TRACE TRANSACTIONS INTRACE-ELIGIBLE SECURITIES WITHIN 15 MINUTES OF THE EXECUTIONTIME; FAILED TO REPORT TO TRACE THE CORRECT TRADE EXECUTIONTIME FOR TRANSACTIONS IN TRACE-ELIGIBLE SECURITIES; AND DOUBLEREPORTED TO TRACE SOME TRANSACTIONS IN TRACE-ELIGIBLESECURITIES. THIS CONDUCT CONSTITUTES SEPARATE AND DISTINCTVIOLATIONS OF NASD RULE 6230 AND FINRA RULE 6730 AND A PATTERNOR PRACTICE OF LATE REPORTING IN VIOLATION OF NASD RULE 2110 ANDFINRA RULE 2010. THE FIRM FAILED TO ACCEPT OR DECLINE IN THEFINRA/NASDAQ TRADE REPORTING FACILITY (FNTRF) OR THE OTCREPORTING FACILITY TRANSACTIONS IN REPORTABLE SECURITIESWITHIN 20 MINUTES AFTER EXECUTION THAT THE FIRM HAD ANOBLIGATION TO ACCEPT OR DECLINE AS THE ORDER ENTRY IDENTIFIERDURING THE TRADE REPORTING REVIEW PERIOD.


Resolution:






i


Allegations: FINRA RULES 6380A, 7230A, 7230A(D)(10), 7450, NASD RULES 4632(B),6130(D)(10), 6955 - CREDIT SUISSE SECURITIES (USA) LLC FAILED TOTIMELY REPORT REPORTABLE ORDER EVENTS (ROES) TO THE ORDERAUDIT TRAIL SYSTEM (OATS); TRANSMITTED NEW ORDER REPORTS ANDRELATED SUBSEQUENT REPORTS TO OATS WHERE THE TIMESTAMP FORTHE RELATED SUBSEQUENT REPORTS OCCURRED PRIOR TO THERECEIPT OF THE ORDER; TRANSMITTED EXECUTION OR COMBINEDORDER/EXECUTION REPORTS TO OATS THAT CONTAINED INACCURATE,INCOMPLETE OR IMPROPERLY FORMATTED DATA THAT OATS WAS UNABLETO LINK TO THE RELATED TRADE REPORTS IN A FINRA TRADE REPORTINGSYSTEM; TRANSMITTED ROUTE OR COMBINED ORDER/ROUTE REPORTSTO OATS THAT OATS WAS UNABLE TO LINK TO THE RELATED ORDERROUTED TO NASDAQ DUE TO INACCURATE, INCOMPLETE OR IMPROPERLYFORMATTED DATA; TRANSMITTED ROUTE OR COMBINED ORDER/ROUTEREPORTS TO OATS THAT OATS WAS UNABLE TO LINK TO THECORRESPONDING NEW ORDER TRANSMITTED BY THE DESTINATIONMEMBER FIRM DUE TO INACCURATE, INCOMPLETE OR IMPROPERLYFORMATTED DATA; TRANSMITTED NEW ORDER REPORTS TO OATS THATOATS WAS UNABLE TO LINK TO THE PRECEDING ROUTE OR COMBINEDORDER/ROUTE REPORTS TRANSMITTED BY OTHER MEMBER FIRMS DUETO INACCURATE, INCOMPLETE OR IMPROPERLY FORMATTED DATA. THEFIRM FAILED TO REPORT TO THE FINRA/NASDAQ TRADE REPORTINGFACILITY (FNTRF)LAST SALE REPORTS OF TRANSACTIONS IN DESIGNATEDSECURITIES EXECUTED DURING NORMAL MARKET HOURS. THE FIRMTRANSMITTED REPORTS TO OATS THAT OMITTED SPECIAL HANDLINGCODES, OMITTED EXECUTION OR COMBINED ORDER EXECUTIONREPORTS AND CONTAINED AN ERRONEOUS ROUTE REPORT. THE FIRMFAILED TO REPORT TO THE FNTRF LAST SALE REPORTS OFTRANSACTIONS THAT REQUIRED A .RX MODIFIER IN DESIGNATEDSECURITIES EXECUTED DURING NORMAL MARKET HOURS. THE FIRMREPORTED TO THE NASD/NASDAQ TRADE REPORTING FACILITY (NNTRF)AND THE FNTRF AN INCORRECT CONTRA SIDE EXECUTING BROKER INNUMEROUS TRANSACTIONS IN REPORTABLE SECURITIES.








Initiated By: FINRA






Other Product Type(s): DESIGNATED SECURITIES, REPORTABLE SECURITIES

FINRA RULES 6380A, 7230A, 7230A(D)(10), 7450, NASD RULES 4632(B),6130(D)(10), 6955 - CREDIT SUISSE SECURITIES (USA) LLC FAILED TOTIMELY REPORT REPORTABLE ORDER EVENTS (ROES) TO THE ORDERAUDIT TRAIL SYSTEM (OATS); TRANSMITTED NEW ORDER REPORTS ANDRELATED SUBSEQUENT REPORTS TO OATS WHERE THE TIMESTAMP FORTHE RELATED SUBSEQUENT REPORTS OCCURRED PRIOR TO THERECEIPT OF THE ORDER; TRANSMITTED EXECUTION OR COMBINEDORDER/EXECUTION REPORTS TO OATS THAT CONTAINED INACCURATE,INCOMPLETE OR IMPROPERLY FORMATTED DATA THAT OATS WAS UNABLETO LINK TO THE RELATED TRADE REPORTS IN A FINRA TRADE REPORTINGSYSTEM; TRANSMITTED ROUTE OR COMBINED ORDER/ROUTE REPORTSTO OATS THAT OATS WAS UNABLE TO LINK TO THE RELATED ORDERROUTED TO NASDAQ DUE TO INACCURATE, INCOMPLETE OR IMPROPERLYFORMATTED DATA; TRANSMITTED ROUTE OR COMBINED ORDER/ROUTEREPORTS TO OATS THAT OATS WAS UNABLE TO LINK TO THECORRESPONDING NEW ORDER TRANSMITTED BY THE DESTINATIONMEMBER FIRM DUE TO INACCURATE, INCOMPLETE OR IMPROPERLYFORMATTED DATA; TRANSMITTED NEW ORDER REPORTS TO OATS THATOATS WAS UNABLE TO LINK TO THE PRECEDING ROUTE OR COMBINEDORDER/ROUTE REPORTS TRANSMITTED BY OTHER MEMBER FIRMS DUETO INACCURATE, INCOMPLETE OR IMPROPERLY FORMATTED DATA. THEFIRM FAILED TO REPORT TO THE FINRA/NASDAQ TRADE REPORTINGFACILITY (FNTRF)LAST SALE REPORTS OF TRANSACTIONS IN DESIGNATEDSECURITIES EXECUTED DURING NORMAL MARKET HOURS. THE FIRMTRANSMITTED REPORTS TO OATS THAT OMITTED SPECIAL HANDLINGCODES, OMITTED EXECUTION OR COMBINED ORDER EXECUTIONREPORTS AND CONTAINED AN ERRONEOUS ROUTE REPORT. THE FIRMFAILED TO REPORT TO THE FNTRF LAST SALE REPORTS OFTRANSACTIONS THAT REQUIRED A .RX MODIFIER IN DESIGNATEDSECURITIES EXECUTED DURING NORMAL MARKET HOURS. THE FIRMREPORTED TO THE NASD/NASDAQ TRADE REPORTING FACILITY (NNTRF)AND THE FNTRF AN INCORRECT CONTRA SIDE EXECUTING BROKER INNUMEROUS TRANSACTIONS IN REPORTABLE SECURITIES.











Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED AND FINED $70,000. FINE PAID ONMAY 30, 2013.


No



Allegations: FINRA RULES 6380A, 7230A, 7230A(D)(10), 7450, NASD RULES 4632(B),6130(D)(10), 6955 - CREDIT SUISSE SECURITIES (USA) LLC FAILED TOTIMELY REPORT REPORTABLE ORDER EVENTS (ROES) TO THE ORDERAUDIT TRAIL SYSTEM (OATS); TRANSMITTED NEW ORDER REPORTS ANDRELATED SUBSEQUENT REPORTS TO OATS WHERE THE TIMESTAMP FORTHE RELATED SUBSEQUENT REPORTS OCCURRED PRIOR TO THERECEIPT OF THE ORDER; TRANSMITTED EXECUTION OR COMBINEDORDER/EXECUTION REPORTS TO OATS THAT CONTAINED INACCURATE,INCOMPLETE OR IMPROPERLY FORMATTED DATA THAT OATS WAS UNABLETO LINK TO THE RELATED TRADE REPORTS IN A FINRA TRADE REPORTINGSYSTEM; TRANSMITTED ROUTE OR COMBINED ORDER/ROUTE REPORTSTO OATS THAT OATS WAS UNABLE TO LINK TO THE RELATED ORDERROUTED TO NASDAQ DUE TO INACCURATE, INCOMPLETE OR IMPROPERLYFORMATTED DATA; TRANSMITTED ROUTE OR COMBINED ORDER/ROUTEREPORTS TO OATS THAT OATS WAS UNABLE TO LINK TO THECORRESPONDING NEW ORDER TRANSMITTED BY THE DESTINATIONMEMBER FIRM DUE TO INACCURATE, INCOMPLETE OR IMPROPERLYFORMATTED DATA; TRANSMITTED NEW ORDER REPORTS TO OATS THATOATS WAS UNABLE TO LINK TO THE PRECEDING ROUTE OR COMBINEDORDER/ROUTE REPORTS TRANSMITTED BY OTHER MEMBER FIRMS DUETO INACCURATE, INCOMPLETE OR IMPROPERLY FORMATTED DATA. THEFIRM FAILED TO REPORT TO THE FINRA/NASDAQ TRADE REPORTINGFACILITY (FNTRF)LAST SALE REPORTS OF TRANSACTIONS IN DESIGNATEDSECURITIES EXECUTED DURING NORMAL MARKET HOURS. THE FIRMTRANSMITTED REPORTS TO OATS THAT OMITTED SPECIAL HANDLINGCODES, OMITTED EXECUTION OR COMBINED ORDER EXECUTIONREPORTS AND CONTAINED AN ERRONEOUS ROUTE REPORT. THE FIRMFAILED TO REPORT TO THE FNTRF LAST SALE REPORTS OFTRANSACTIONS THAT REQUIRED A .RX MODIFIER IN DESIGNATEDSECURITIES EXECUTED DURING NORMAL MARKET HOURS. THE FIRMREPORTED TO THE NASD/NASDAQ TRADE REPORTING FACILITY (NNTRF)AND THE FNTRF AN INCORRECT CONTRA SIDE EXECUTING BROKER INNUMEROUS TRANSACTIONS IN REPORTABLE SECURITIES.







Initiated By: FINRA






Other Product Type(s): DESIGNATED SECURITIES, REPORTABLE SECURITIES

FINRA RULES 6380A, 7230A, 7230A(D)(10), 7450, NASD RULES 4632(B),6130(D)(10), 6955 - CREDIT SUISSE SECURITIES (USA) LLC FAILED TOTIMELY REPORT REPORTABLE ORDER EVENTS (ROES) TO THE ORDERAUDIT TRAIL SYSTEM (OATS); TRANSMITTED NEW ORDER REPORTS ANDRELATED SUBSEQUENT REPORTS TO OATS WHERE THE TIMESTAMP FORTHE RELATED SUBSEQUENT REPORTS OCCURRED PRIOR TO THERECEIPT OF THE ORDER; TRANSMITTED EXECUTION OR COMBINEDORDER/EXECUTION REPORTS TO OATS THAT CONTAINED INACCURATE,INCOMPLETE OR IMPROPERLY FORMATTED DATA THAT OATS WAS UNABLETO LINK TO THE RELATED TRADE REPORTS IN A FINRA TRADE REPORTINGSYSTEM; TRANSMITTED ROUTE OR COMBINED ORDER/ROUTE REPORTSTO OATS THAT OATS WAS UNABLE TO LINK TO THE RELATED ORDERROUTED TO NASDAQ DUE TO INACCURATE, INCOMPLETE OR IMPROPERLYFORMATTED DATA; TRANSMITTED ROUTE OR COMBINED ORDER/ROUTEREPORTS TO OATS THAT OATS WAS UNABLE TO LINK TO THECORRESPONDING NEW ORDER TRANSMITTED BY THE DESTINATIONMEMBER FIRM DUE TO INACCURATE, INCOMPLETE OR IMPROPERLYFORMATTED DATA; TRANSMITTED NEW ORDER REPORTS TO OATS THATOATS WAS UNABLE TO LINK TO THE PRECEDING ROUTE OR COMBINEDORDER/ROUTE REPORTS TRANSMITTED BY OTHER MEMBER FIRMS DUETO INACCURATE, INCOMPLETE OR IMPROPERLY FORMATTED DATA. THEFIRM FAILED TO REPORT TO THE FINRA/NASDAQ TRADE REPORTINGFACILITY (FNTRF)LAST SALE REPORTS OF TRANSACTIONS IN DESIGNATEDSECURITIES EXECUTED DURING NORMAL MARKET HOURS. THE FIRMTRANSMITTED REPORTS TO OATS THAT OMITTED SPECIAL HANDLINGCODES, OMITTED EXECUTION OR COMBINED ORDER EXECUTIONREPORTS AND CONTAINED AN ERRONEOUS ROUTE REPORT. THE FIRMFAILED TO REPORT TO THE FNTRF LAST SALE REPORTS OFTRANSACTIONS THAT REQUIRED A .RX MODIFIER IN DESIGNATEDSECURITIES EXECUTED DURING NORMAL MARKET HOURS. THE FIRMREPORTED TO THE NASD/NASDAQ TRADE REPORTING FACILITY (NNTRF)AND THE FNTRF AN INCORRECT CONTRA SIDE EXECUTING BROKER INNUMEROUS TRANSACTIONS IN REPORTABLE SECURITIES.


Resolution:






i


Allegations: FINRA RULE 2010, NASD RULES 2110, 3010 - CREDIT SUISSE SECURITIES(USA) LLC FAILED TO ESTABLISH AND MAINTAIN A SYSTEM TO SUPERVISETHE TRADING ACTIVITY OF TWO OF ITS PROPRIETARY ELECTRONICTRADING SYSTEMS THAT WAS REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH APPLICABLE SECURITIES LAWS, REGULATIONS ANDNASD AND FINRA RULES CONCERNING THE DETECTION OF PURCHASEAND SALE TRANSACTIONS THAT RESULTED IN NO CHANGE OFBENEFICIAL OWNERSHIP. THE FIRM FAILED TO PROPERLY SUPERVISE ANDADEQUATELY MONITOR THE TRADING ACTIVITY OF THE PROPRIETARYELECTRONIC TRADING SYSTEMS RELATED TO THE PREVENTION OFEXCHANGE-LEVEL CROSSES. THE FIRM'S SUPERVISORY SYSTEM FAILEDTO ALERT THE APPROPRIATE INDIVIDUALS AS TO THE QUANTITY ANDFREQUENCY WITH WHICH EXCHANGE-LEVEL CROSSES OF ORDERSGENERATED BY THE ELECTRONIC TRADING SYSTEMS WERE OCCURRING.THE FIRM FAILED TO ESTABLISH, MAINTAIN AND ENFORCE REASONABLEWRITTEN SUPERVISORY PROCEDURES (WSPS) RELATED TO THESUPERVISION OF THE TRADING ACTIVITY GENERATED BY ITSPROPRIETARY ELECTRONIC TRADING SYSTEMS. THE FIRM DID HAVEWSPS RELATED GENERALLY TO MONITORING THE TRADING ACTIVITYGENERATED BY PROPRIETARY ELECTRONIC TRADING SYSTEMS, BUT THEPROCEDURES WERE NOT ADEQUATELY TAILORED TO IDENTIFYINGPOTENTIAL EXCHANGE-LEVEL CROSSES. THE FIRM FAILED TO PROVIDEADEQUATE DOCUMENTARY EVIDENCE OF SUPERVISORY REVIEWSCONDUCTED ON THE TRADING ACTIVITY GENERATED BY THEPROPRIETARY ELECTRONIC TRADING SYSTEMS.








Initiated By: FINRA







FINRA RULE 2010, NASD RULES 2110, 3010 - CREDIT SUISSE SECURITIES(USA) LLC FAILED TO ESTABLISH AND MAINTAIN A SYSTEM TO SUPERVISETHE TRADING ACTIVITY OF TWO OF ITS PROPRIETARY ELECTRONICTRADING SYSTEMS THAT WAS REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH APPLICABLE SECURITIES LAWS, REGULATIONS ANDNASD AND FINRA RULES CONCERNING THE DETECTION OF PURCHASEAND SALE TRANSACTIONS THAT RESULTED IN NO CHANGE OFBENEFICIAL OWNERSHIP. THE FIRM FAILED TO PROPERLY SUPERVISE ANDADEQUATELY MONITOR THE TRADING ACTIVITY OF THE PROPRIETARYELECTRONIC TRADING SYSTEMS RELATED TO THE PREVENTION OFEXCHANGE-LEVEL CROSSES. THE FIRM'S SUPERVISORY SYSTEM FAILEDTO ALERT THE APPROPRIATE INDIVIDUALS AS TO THE QUANTITY ANDFREQUENCY WITH WHICH EXCHANGE-LEVEL CROSSES OF ORDERSGENERATED BY THE ELECTRONIC TRADING SYSTEMS WERE OCCURRING.THE FIRM FAILED TO ESTABLISH, MAINTAIN AND ENFORCE REASONABLEWRITTEN SUPERVISORY PROCEDURES (WSPS) RELATED TO THESUPERVISION OF THE TRADING ACTIVITY GENERATED BY ITSPROPRIETARY ELECTRONIC TRADING SYSTEMS. THE FIRM DID HAVEWSPS RELATED GENERALLY TO MONITORING THE TRADING ACTIVITYGENERATED BY PROPRIETARY ELECTRONIC TRADING SYSTEMS, BUT THEPROCEDURES WERE NOT ADEQUATELY TAILORED TO IDENTIFYINGPOTENTIAL EXCHANGE-LEVEL CROSSES. THE FIRM FAILED TO PROVIDEADEQUATE DOCUMENTARY EVIDENCE OF SUPERVISORY REVIEWSCONDUCTED ON THE TRADING ACTIVITY GENERATED BY THEPROPRIETARY ELECTRONIC TRADING SYSTEMS.


Resolution:



No









Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED, FINED $250,000, TO BE PAIDJOINTLY TO FINRA, THE NASDAQ STOCK MARKET, LLC, BATS EXCHANGE,INC. AND NYSE ARCA, INC., AND TO REVISE ITS SUPERVISORY SYSTEMWITH RESPECT TO IDENTIFYING POTENTIAL EXCHANGE-LEVEL CROSSESAND TO ALERT THE APPROPRIATE INDIVIDUALS AS TO THE QUANTITY ANDFREQUENCY WITH WHICH EXCHANGE-LEVEL CROSSES OF ORDERSGENERATED BY THE ELECTRONIC TRADING SYSTEMS WERE OCCURRINGWITHIN 30 BUSINESS DAYS OF ACCEPTANCE OF THIS AWC BY THENATIONAL ADJUDICATORY COUNCIL (NAC).


Initiated By: FINRA







Allegations: FINRA RULE 2010, NASD RULES 2110, 3010 - CREDIT SUISSE SECURITIES(USA) LLC FAILED TO ESTABLISH AND MAINTAIN A SYSTEM TO SUPERVISETHE TRADING ACTIVITY OF TWO OF ITS PROPRIETARY ELECTRONICTRADING SYSTEMS WITH RESPECT TO THE DETECTION OF PURCHASEAND SALE TRANSACTIONS THAT RESULTED IN NO CHANGE OFBENEFICIAL OWNERSHIP. THE FIRM FAILED TO PROPERLY SUPERVISE ANDADEQUATELY MONITOR THE TRADING ACTIVITY OF THE PROPRIETARYELECTRONIC TRADING SYSTEMS RELATED TO THE PREVENTION OFEXCHANGE-LEVEL CROSSES. THE FIRM FAILED TO ESTABLISH, MAINTAINAND ENFORCE REASONABLE WRITTEN SUPERVISORY PROCEDURES(WSPS) RELATED TO THE SUPERVISION OF THE TRADING ACTIVITYGENERATED BY ITS PROPRIETARY ELECTRONIC TRADING SYSTEMS. THEFIRM FAILED TO PROVIDE ADEQUATE DOCUMENTARY EVIDENCE OFSUPERVISORY REVIEWS CONDUCTED.











Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED, FINED $250,000, TO BE PAIDJOINTLY TO FINRA, THE NASDAQ STOCK MARKET, LLC, BATS EXCHANGE,INC. AND NYSE ARCA, INC., AND TO REVISE ITS SUPERVISORY SYSTEMWITH RESPECT TO IDENTIFYING POTENTIAL EXCHANGE-LEVEL CROSSESAND TO ALERT THE APPROPRIATE INDIVIDUALS AS TO THE QUANTITY ANDFREQUENCY WITH WHICH EXCHANGE-LEVEL CROSSES OF ORDERSGENERATED BY THE ELECTRONIC TRADING SYSTEMS WERE OCCURRINGWITHIN 30 BUSINESS DAYS OF ACCEPTANCE OF THIS AWC BY THENATIONAL ADJUDICATORY COUNCIL (NAC).



i


Allegations: BATS RULES 3.1, 5-1 THROUGH 5.4 - CREDIT SUISSE SECURITIES (USA)LLC FAILED TO ESTABLISH AND MAINTAIN A SYSTEM TO SUPERVISE THETRADING ACTIVITY OF TWO OF ITS PROPRIETARY ELECTRONIC TRADINGSYSTEMS THAT WAS REASONABLY DESIGNED TO ACHIEVE COMPLIANCEWITH APPLICABLE SECURITIES LAWS, REGULATIONS AND BATS RULESCONCERNING THE DETECTION OF PURCHASE AND SALE TRANSACTIONSTHAT RESULTED IN NO CHANGE OF BENEFICIAL OWNERSHIP. THE FIRMFAILED TO PROPERLY SUPERVISE AND ADEQUATELY MONITOR THETRADING ACTIVITY OF THE PROPRIETARY ELECTRONIC TRADINGSYSTEMS RELATED TO THE PREVENTION OF EXCHANGE-LEVEL CROSSES.THE FIRM'S SUPERVISORY SYSTEM FAILED TO ALERT THE APPROPRIATEINDIVIDUALS AS TO THE QUANTITY AND FREQUENCY WITH WHICHEXCHANGE-LEVEL CROSSES OF ORDERS GENERATED BY THEELECTRONIC TRADING SYSTEMS WERE OCCURRING. THE FIRM FAILED TOESTABLISH, MAINTAIN AND ENFORCE REASONABLE WRITTENSUPERVISORY PROCEDURES (WSPS) RELATED TO THE SUPERVISION OFTHE TRADING ACTIVITY GENERATED BY ITS PROPRIETARY ELECTRONICTRADING SYSTEMS. THE FIRM DID HAVE WSPS RELATED GENERALLY TOMONITORING THE TRADING ACTIVITY GENERATED BY PROPRIETARYELECTRONIC TRADING SYSTEMS, BUT THE PROCEDURES WERE NOTADEQUATELY TAILORED TO IDENTIFYING POTENTIAL EXCHANGE-LEVELCROSSES. THE FIRM FAILED TO PROVIDE ADEQUATE DOCUMENTARYEVIDENCE OF SUPERVISORY REVIEWS CONDUCTED ON THE TRADINGACTIVITY GENERATED BY THE PROPRIETARY ELECTRONIC TRADINGSYSTEMS.







Initiated By: BATS Z-EXCHANGE, INC.







BATS RULES 3.1, 5-1 THROUGH 5.4 - CREDIT SUISSE SECURITIES (USA)LLC FAILED TO ESTABLISH AND MAINTAIN A SYSTEM TO SUPERVISE THETRADING ACTIVITY OF TWO OF ITS PROPRIETARY ELECTRONIC TRADINGSYSTEMS THAT WAS REASONABLY DESIGNED TO ACHIEVE COMPLIANCEWITH APPLICABLE SECURITIES LAWS, REGULATIONS AND BATS RULESCONCERNING THE DETECTION OF PURCHASE AND SALE TRANSACTIONSTHAT RESULTED IN NO CHANGE OF BENEFICIAL OWNERSHIP. THE FIRMFAILED TO PROPERLY SUPERVISE AND ADEQUATELY MONITOR THETRADING ACTIVITY OF THE PROPRIETARY ELECTRONIC TRADINGSYSTEMS RELATED TO THE PREVENTION OF EXCHANGE-LEVEL CROSSES.THE FIRM'S SUPERVISORY SYSTEM FAILED TO ALERT THE APPROPRIATEINDIVIDUALS AS TO THE QUANTITY AND FREQUENCY WITH WHICHEXCHANGE-LEVEL CROSSES OF ORDERS GENERATED BY THEELECTRONIC TRADING SYSTEMS WERE OCCURRING. THE FIRM FAILED TOESTABLISH, MAINTAIN AND ENFORCE REASONABLE WRITTENSUPERVISORY PROCEDURES (WSPS) RELATED TO THE SUPERVISION OFTHE TRADING ACTIVITY GENERATED BY ITS PROPRIETARY ELECTRONICTRADING SYSTEMS. THE FIRM DID HAVE WSPS RELATED GENERALLY TOMONITORING THE TRADING ACTIVITY GENERATED BY PROPRIETARYELECTRONIC TRADING SYSTEMS, BUT THE PROCEDURES WERE NOTADEQUATELY TAILORED TO IDENTIFYING POTENTIAL EXCHANGE-LEVELCROSSES. THE FIRM FAILED TO PROVIDE ADEQUATE DOCUMENTARYEVIDENCE OF SUPERVISORY REVIEWS CONDUCTED ON THE TRADINGACTIVITY GENERATED BY THE PROPRIETARY ELECTRONIC TRADINGSYSTEMS.


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED, FINED $250,000, TO BE PAIDJOINTLY TO FINRA, THE NASDAQ STOCK MARKET, LLC, BATS EXCHANGE,INC. AND NYSE ARCA, INC., AND TO REVISE ITS SUPERVISORY SYSTEMWITH RESPECT TO IDENTIFYING POTENTIAL EXCHANGE-LEVEL CROSSESAND TO ALERT THE APPROPRIATE INDIVIDUALS AS TO THE QUANTITY ANDFREQUENCY WITH WHICH EXCHANGE-LEVEL CROSSES OF ORDERSGENERATED BY THE ELECTRONIC TRADING SYSTEMS WERE OCCURRINGWITHIN 30 BUSINESS DAYS OF ACCEPTANCE OF THIS AWC BY THE BATSEXCHANGE.


No









Initiated By: BATS Y-EXCHANGE, INC







Allegations: BATS RULES 3.1, 5-1 THROUGH 5.4 - CREDIT SUISSE SECURITIES (USA)LLC FAILED TO ESTABLISH AND MAINTAIN A SYSTEM TO SUPERVISE THETRADING ACTIVITY OF TWO OF ITS PROPRIETARY ELECTRONIC TRADINGSYSTEMS WITH RESPECT TO THE DETECTION OF PURCHASE AND SALETRANSACTIONS THAT RESULTED IN NO CHANGE OF BENEFICIALOWNERSHIP. THE FIRM FAILED TO PROPERLY SUPERVISE ANDADEQUATELY MONITOR THE TRADING ACTIVITY OF THE PROPRIETARYELECTRONIC TRADING SYSTEMS RELATED TO THE PREVENTION OFEXCHANGE-LEVEL CROSSES. THE FIRM FAILED TO ESTABLISH, MAINTAINAND ENFORCE REASONABLE WRITTEN SUPERVISORY PROCEDURES(WSPS) RELATED TO THE SUPERVISION OF THE TRADING ACTIVITYGENERATED BY ITS PROPRIETARY ELECTRONIC TRADING SYSTEMS. THEFIRM FAILED TO PROVIDE ADEQUATE DOCUMENTARY EVIDENCE OFSUPERVISORY REVIEWS CONDUCTED.



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED, FINED $250,000, TO BE PAIDJOINTLY TO FINRA, THE NASDAQ STOCK MARKET, LLC, BATS EXCHANGE,INC. AND NYSE ARCA, INC., AND TO REVISE ITS SUPERVISORY SYSTEMWITH RESPECT TO IDENTIFYING POTENTIAL EXCHANGE-LEVEL CROSSESAND TO ALERT THE APPROPRIATE INDIVIDUALS AS TO THE QUANTITY ANDFREQUENCY WITH WHICH EXCHANGE-LEVEL CROSSES OF ORDERSGENERATED BY THE ELECTRONIC TRADING SYSTEMS WERE OCCURRINGWITHIN 30 BUSINESS DAYS OF ACCEPTANCE OF THIS AWC BY THE BATSEXCHANGE








WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED, FINED $250,000, TO BE PAIDJOINTLY TO FINRA, THE NASDAQ STOCK MARKET, LLC, BATS EXCHANGE,INC. AND NYSE ARCA, INC., AND TO REVISE ITS SUPERVISORY SYSTEMWITH RESPECT TO IDENTIFYING POTENTIAL EXCHANGE-LEVEL CROSSESAND TO ALERT THE APPROPRIATE INDIVIDUALS AS TO THE QUANTITY ANDFREQUENCY WITH WHICH EXCHANGE-LEVEL CROSSES OF ORDERSGENERATED BY THE ELECTRONIC TRADING SYSTEMS WERE OCCURRINGWITHIN 30 BUSINESS DAYS OF ACCEPTANCE OF THIS AWC BY THE BATSEXCHANGE


i









Allegations: NASDAQ RULES 2110, 3010 - CREDIT SUISSE SECURITIES (USA) LLC FAILEDTO ESTABLISH AND MAINTAIN A SYSTEM TO SUPERVISE THE TRADINGACTIVITY OF TWO OF ITS PROPRIETARY ELECTRONIC TRADING SYSTEMSTHAT WAS REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHAPPLICABLE SECURITIES LAWS, REGULATIONS AND NASDAQ RULESCONCERNING THE DETECTION OF PURCHASE AND SALE TRANSACTIONSTHAT RESULTED IN NO CHANGE OF BENEFICIAL OWNERSHIP. THE FIRMFAILED TO PROPERLY SUPERVISE AND ADEQUATELY MONITOR THETRADING ACTIVITY OF THE PROPRIETARY ELECTRONIC TRADINGSYSTEMS RELATED TO THE PREVENTION OF EXCHANGE-LEVEL CROSSES.THE FIRM'S SUPERVISORY SYSTEM FAILED TO ALERT THE APPROPRIATEINDIVIDUALS AS TO THE QUANTITY AND FREQUENCY WITH WHICHEXCHANGE-LEVEL CROSSES OF ORDERS GENERATED BY THEELECTRONIC TRADING SYSTEMS WERE OCCURRING. THE FIRM FAILED TOESTABLISH, MAINTAIN AND ENFORCE REASONABLE WRITTENSUPERVISORY PROCEDURES (WSPS) RELATED TO THE SUPERVISION OFTHE TRADING ACTIVITY GENERATED BY ITS PROPRIETARY ELECTRONICTRADING SYSTEMS. THE FIRM DID HAVE WSPS RELATED GENERALLY TOMONITORING THE TRADING ACTIVITY GENERATED BY PROPRIETARYELECTRONIC TRADING SYSTEMS, BUT THE PROCEDURES WERE NOTADEQUATELY TAILORED TO IDENTIFYING POTENTIAL EXCHANGE-LEVELCROSSES. THE FIRM FAILED TO PROVIDE ADEQUATE DOCUMENTARYEVIDENCE OF SUPERVISORY REVIEWS CONDUCTED ON THE TRADINGACTIVITY GENERATED BY THE PROPRIETARY ELECTRONIC TRADINGSYSTEMS.









Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED, FINED $250,000, TO BE PAIDJOINTLY TO FINRA, THE NASDAQ STOCK MARKET, LLC, BATS EXCHANGE,INC. AND NYSE ARCA, INC., AND TO REVISE ITS SUPERVISORY SYSTEMWITH RESPECT TO IDENTIFYING POTENTIAL EXCHANGE-LEVEL CROSSESAND TO ALERT THE APPROPRIATE INDIVIDUALS AS TO THE QUANTITY ANDFREQUENCY WITH WHICH EXCHANGE-LEVEL CROSSES OF ORDERSGENERATED BY THE ELECTRONIC TRADING SYSTEMS WERE OCCURRINGWITHIN 30 BUSINESS DAYS OF ACCEPTANCE OF THIS AWC BY NASDAQ.


No




Allegations: NASDAQ RULES 2110, 3010 - CREDIT SUISSE SECURITIES (USA) LLCFAILED TO ESTABLISH AND MAINTAIN A SYSTEM TO SUPERVISE THETRADING ACTIVITY OF TWO OF ITS PROPRIETARY ELECTRONIC TRADINGSYSTEMS WITH RESPECT TO THE DETECTION OF PURCHASE AND SALETRANSACTIONS THAT RESULTED IN NO CHANGE OF BENEFICIALOWNERSHIP. THE FIRM FAILED TO PROPERLY SUPERVISE ANDADEQUATELY MONITOR THE TRADING ACTIVITY OF THE PROPRIETARYELECTRONIC TRADING SYSTEMS RELATED TO THE PREVENTION OFEXCHANGE-LEVEL CROSSES. THE FIRM FAILED TO ESTABLISH, MAINTAINAND ENFORCE REASONABLE WRITTEN SUPERVISORY PROCEDURES(WSPS) RELATED TO THE SUPERVISION OF THE TRADING ACTIVITYGENERATED BY ITS PROPRIETARY ELECTRONIC TRADING SYSTEMS. THEFIRM FAILED TO PROVIDE ADEQUATE DOCUMENTARY EVIDENCE OFSUPERVISORY REVIEWS CONDUCTED.














NASDAQ RULES 2110, 3010 - CREDIT SUISSE SECURITIES (USA) LLCFAILED TO ESTABLISH AND MAINTAIN A SYSTEM TO SUPERVISE THETRADING ACTIVITY OF TWO OF ITS PROPRIETARY ELECTRONIC TRADINGSYSTEMS WITH RESPECT TO THE DETECTION OF PURCHASE AND SALETRANSACTIONS THAT RESULTED IN NO CHANGE OF BENEFICIALOWNERSHIP. THE FIRM FAILED TO PROPERLY SUPERVISE ANDADEQUATELY MONITOR THE TRADING ACTIVITY OF THE PROPRIETARYELECTRONIC TRADING SYSTEMS RELATED TO THE PREVENTION OFEXCHANGE-LEVEL CROSSES. THE FIRM FAILED TO ESTABLISH, MAINTAINAND ENFORCE REASONABLE WRITTEN SUPERVISORY PROCEDURES(WSPS) RELATED TO THE SUPERVISION OF THE TRADING ACTIVITYGENERATED BY ITS PROPRIETARY ELECTRONIC TRADING SYSTEMS. THEFIRM FAILED TO PROVIDE ADEQUATE DOCUMENTARY EVIDENCE OFSUPERVISORY REVIEWS CONDUCTED.


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED, FINED $250,000, TO BE PAIDJOINTLY TO FINRA, THE NASDAQ STOCK MARKET, LLC, BATS EXCHANGE,INC. AND NYSE ARCA, INC., AND TO REVISE ITS SUPERVISORY SYSTEMWITH RESPECT TO IDENTIFYING POTENTIAL EXCHANGE-LEVEL CROSSESAND TO ALERT THE APPROPRIATE INDIVIDUALS AS TO THE QUANTITY ANDFREQUENCY WITH WHICH EXCHANGE-LEVEL CROSSES OF ORDERSGENERATED BY THE ELECTRONIC TRADING SYSTEMS WERE OCCURRINGWITHIN 30 BUSINESS DAYS OF ACCEPTANCE OF THIS AWC BY NASDAQ.




i


Initiated By: INTERNATIONAL SECURITIES EXCHANGE

Allegations: IN APRIL 2010 A CUSTOMER OF THE FIRM EXCEEDED POSITION LIMITS ONXLF ON EIGHT CONSECUTIVE DAYS BETWEEN 4/19/10 TO 4/28/10. DURINGMAY 2010 ANOTHER CUSTOMER OF THE FIRM EXCEEDED POSITION LIMITSON EEM ON FIVE CONSECUTIVE DAYS BETWEEN MAY 24 & MAY 28TH. ONAUGUST 10, 2011 THE FIRM EXCEEDED THE POSITION LIMIT ON FXI. THECONDUCT DESCRIBED ABOVE CONSTITUTES THREE SEPARATEVIOLATIONS OF ISE RULE 412.











CENSURE


Docket/Case Number: 2010-081, 2010-089 & 2011-174




Resolution:


Sanction Details: FIRM PAID $20000


No






Docket/Case Number: 2010-081, 2010-089, & 2011-174


Allegations: IN APRIL 2010 A CUSTOMER OF THE FIRM EXCEEDED POSITION LIMITS ONXLF ON EIGHT CONSECUTIVE DAYS BETWEEN 4/19/10 TO 4/28/10. DURINGMAY 2010 ANOTHER CUSTOMER OF THE FIRM EXCEEDED POSITION LIMITSON EEM ON FIVE CONSECUTIVE DAYS BETWEEN MAY 24 & MAY 28TH. ONAUGUST 10, 2011 THE FIRM EXCEEDED THE POSITION LIMIT ON FXI. THECONDUCT DESCRIBED ABOVE CONSTITUTES THREE SEPARATEVIOLATIONS OF ISE RULE 412.










CENSURE




Resolution:


Sanction Details: FIRM PAID $20000.00




i


Allegations: SEC ADMIN RELEASES 33-9368, 34-68251, NOVEMBER 16, 2012: THESECURITIES AND EXCHANGE COMMISSION ("COMMISSION") DEEMED ITAPPROPRIATE THAT CEASE-AND-DESIST PROCEEDINGS BE INSTITUTEDPURSUANT TO SECTION 8A OF THE SECURITIES ACTOF 1933 ("SECURITIES ACT") AND SECTION 21C OF THE SECURITIESEXCHANGE ACT OF 1934 ("EXCHANGE ACT"), AGAINST CREDIT SUISSESECURITIES (USA) LLC AND OTHER AFFILIATED ENTITIES("RESPONDENTS").

THE COMMISSION FOUND THAT THE MATTER INVOLVES TWO SEPARATEPRACTICES IN WHICH CREDIT SUISSE SECURITIES (USA) LLC,AND AFFILIATED ENTITIES (COLLECTIVELY, "CREDIT SUISSE") ENGAGEDWITH RESPECT TO RESIDENTIAL MORTGAGE-BACKEDSECURITIES ("RMBS") IT SPONSORED AND/OR UNDERWROTE.

FIRST, FROM APPROXIMATELY 2005 TO 2010, CREDIT SUISSE ENTEREDINTO A NUMBER OF FINANCIAL SETTLEMENTS WITH LOAN ORIGINATORSRELATED TO EARLY DEFAULTING LOANS IT HAD PREVIOUSLY SOLD TOSECURITIZATION TRUSTS IT SPONSORED, AND THEN KEPT THEPROCEEDS OF THOSE SETTLEMENTS WITHOUT NOTIFYING ORCOMPENSATING THE RMBS TRUSTS THAT OWNED THE LOANS (THE "BULKSETTLEMENT" PRACTICE). CREDIT SUISSE FAILED TO DISCLOSE THISPRACTICE TO ITS RMBS INVESTORS. ADDITIONALLY, WITH RESPECT TOCERTAIN RMBS TRANSACTIONS, CREDIT SUISSE FAILED TO COMPLY WITHOFFERING DOCUMENT PROVISIONS THAT REQUIRED IT TO REPURCHASECERTAIN EARLY DEFAULTING LOANS. AS A RESULT OF THE CONDUCT,CREDIT SUISSEIMPROPERLY OBTAINED APPROXIMATELY $55,747,769.

SEPARATELY, IN LATE 2006, CREDIT SUISSE UNDERWROTE TWO RMBSTRANSACTIONS THAT WERE COLLATERALIZED BY APPROXIMATELY $1.9BILLION OF SUBPRIME MORTGAGES. IN CONNECTION WITH ITS EFFORTSTO MARKET AND SELL THESE RMBS, CREDIT SUISSE MADE MISLEADINGSTATEMENTS REGARDING A KEY INVESTOR PROTECTION KNOWN AS THE "FIRST PAYMENT DEFAULT" ("FPD") COVENANT, WHICH REQUIRED THEORIGINATORS OF THE LOANS TO REPURCHASE CERTAIN DELINQUENTLOANS OR OTHERWISE CURE BREACHES OF THE COVENANT. IF THEORIGINATORS WERE NOTIFIED OF AND SUBSEQUENTLY FAILED TOREPURCHASE OR CURE A BREACH OF THE FPD COVENANT WITHIN THEMEANING OF THE POOLING AND SERVICING AGREEMENTS ("PSAS"),CREDIT SUISSE WAS REQUIRED TO DO SO. NOTWITHSTANDING THISPROVISION, CREDIT SUISSE, WITHOUT DISCLOSURE, DID NOT ENSURETHE REMOVAL OF ALL SUCH LOANS. AS A RESULT, INVESTORS SUSTAINEDLOSSES OF APPROXIMATELY $10,056,561 ON THE LOANS THATIMPROPERLY REMAINED IN THE RMBS TRUSTS.

AS A RESULT OF THE NEGLIGENT CONDUCT, CREDIT SUISSE VIOLATEDSECTION 17(A)(2) AND (3) OF THE SECURITIES ACT.













Other Product Type(s): RESIDENTIAL MORTGAGE-BACKED SECURITIES

SEC ADMIN RELEASES 33-9368, 34-68251, NOVEMBER 16, 2012: THESECURITIES AND EXCHANGE COMMISSION ("COMMISSION") DEEMED ITAPPROPRIATE THAT CEASE-AND-DESIST PROCEEDINGS BE INSTITUTEDPURSUANT TO SECTION 8A OF THE SECURITIES ACTOF 1933 ("SECURITIES ACT") AND SECTION 21C OF THE SECURITIESEXCHANGE ACT OF 1934 ("EXCHANGE ACT"), AGAINST CREDIT SUISSESECURITIES (USA) LLC AND OTHER AFFILIATED ENTITIES("RESPONDENTS").

THE COMMISSION FOUND THAT THE MATTER INVOLVES TWO SEPARATEPRACTICES IN WHICH CREDIT SUISSE SECURITIES (USA) LLC,AND AFFILIATED ENTITIES (COLLECTIVELY, "CREDIT SUISSE") ENGAGEDWITH RESPECT TO RESIDENTIAL MORTGAGE-BACKEDSECURITIES ("RMBS") IT SPONSORED AND/OR UNDERWROTE.

FIRST, FROM APPROXIMATELY 2005 TO 2010, CREDIT SUISSE ENTEREDINTO A NUMBER OF FINANCIAL SETTLEMENTS WITH LOAN ORIGINATORSRELATED TO EARLY DEFAULTING LOANS IT HAD PREVIOUSLY SOLD TOSECURITIZATION TRUSTS IT SPONSORED, AND THEN KEPT THEPROCEEDS OF THOSE SETTLEMENTS WITHOUT NOTIFYING ORCOMPENSATING THE RMBS TRUSTS THAT OWNED THE LOANS (THE "BULKSETTLEMENT" PRACTICE). CREDIT SUISSE FAILED TO DISCLOSE THISPRACTICE TO ITS RMBS INVESTORS. ADDITIONALLY, WITH RESPECT TOCERTAIN RMBS TRANSACTIONS, CREDIT SUISSE FAILED TO COMPLY WITHOFFERING DOCUMENT PROVISIONS THAT REQUIRED IT TO REPURCHASECERTAIN EARLY DEFAULTING LOANS. AS A RESULT OF THE CONDUCT,CREDIT SUISSEIMPROPERLY OBTAINED APPROXIMATELY $55,747,769.

SEPARATELY, IN LATE 2006, CREDIT SUISSE UNDERWROTE TWO RMBSTRANSACTIONS THAT WERE COLLATERALIZED BY APPROXIMATELY $1.9BILLION OF SUBPRIME MORTGAGES. IN CONNECTION WITH ITS EFFORTSTO MARKET AND SELL THESE RMBS, CREDIT SUISSE MADE MISLEADINGSTATEMENTS REGARDING A KEY INVESTOR PROTECTION KNOWN AS THE "FIRST PAYMENT DEFAULT" ("FPD") COVENANT, WHICH REQUIRED THEORIGINATORS OF THE LOANS TO REPURCHASE CERTAIN DELINQUENTLOANS OR OTHERWISE CURE BREACHES OF THE COVENANT. IF THEORIGINATORS WERE NOTIFIED OF AND SUBSEQUENTLY FAILED TOREPURCHASE OR CURE A BREACH OF THE FPD COVENANT WITHIN THEMEANING OF THE POOLING AND SERVICING AGREEMENTS ("PSAS"),CREDIT SUISSE WAS REQUIRED TO DO SO. NOTWITHSTANDING THISPROVISION, CREDIT SUISSE, WITHOUT DISCLOSURE, DID NOT ENSURETHE REMOVAL OF ALL SUCH LOANS. AS A RESULT, INVESTORS SUSTAINEDLOSSES OF APPROXIMATELY $10,056,561 ON THE LOANS THATIMPROPERLY REMAINED IN THE RMBS TRUSTS.

AS A RESULT OF THE NEGLIGENT CONDUCT, CREDIT SUISSE VIOLATEDSECTION 17(A)(2) AND (3) OF THE SECURITIES ACT.


Resolution:


No

Order







Sanction Details: THE COMMISSION DEEMED IT APPROPRIATE TO IMPOSE THE SANCTIONSAGREED TO IN RESPONDENTS' OFFER. ACCORDINGLY, IT IS HEREBYORDERED THAT PURSUANT TO SECTION 8A OF THE SECURITIES ACT,RESPONDENT CREDIT SUISSE SECURITIES (USA) LLC CEASE AND DESISTFROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTUREVIOLATIONS OF SECTIONS 17(A)(2) AND (3) OF THE SECURITIES ACT. ALLRESPONDENTS SHALL, JOINTLY AND SEVERALLY, WITHIN TEN (10)BUSINESS DAYS OF THE ENTRY OF THE ORDER, PAY DISGORGEMENT OF$55,747,769, PREJUDGMENT INTEREST OF $13,000,000, AND A CIVIL MONEYPENALTY IN THE AMOUNT OF $33,000,000 TO THE SECURITIES ANDEXCHANGE COMMISSION RELATED TO BULK SETTLEMENTS.RESPONDENT CREDIT SUISSE SECURITIES (USA) LLC SHALL, JOINTLY ANDSEVERALLY, WITHIN TEN (10) BUSINESS DAYS OF THE ENTRY OF THEORDER, IN ADDITION TO THE PAYMENTS ORDERED, PAY DISGORGEMENTOF $10,056,561, PREJUDGMENT INTEREST OF $2,200,000, AND A CIVILMONEY PENALTY IN THE AMOUNT OF $6,000,000 TO THE SECURITIES ANDEXCHANGE COMMISSION RELATED TO FIRST PAYMENT DEFAULTS.

Regulator Statement IN ANTICIPATION OF THE INSTITUTION OF THE PROCEEDINGS,RESPONDENTS SUBMITTED AN OFFER OF SETTLEMENT (THE "OFFER")WHICH THE COMMISSION DETERMINED TO ACCEPT. SOLELY FOR THEPURPOSE OF THE PROCEEDINGS AND ANY OTHER PROCEEDINGSBROUGHT BY OR ON BEHALF OF THE COMMISSION, OR TO WHICH THECOMMISSION IS A PARTY, AND WITHOUT ADMITTING OR DENYING THEFINDINGS, EXCEPT AS TO THE COMMISSION'S JURISDICTION OVER THEMAND THE SUBJECT MATTER OF THE PROCEEDINGS, WHICH AREADMITTED, RESPONDENTS CONSENTED TO THE ENTRY OF THE ORDERINSTITUTING CEASE-AND-DESIST PROCEEDINGS PURSUANT TO SECTION8A OF THE SECURITIES ACT OF 1933 AND SECTION 21C OFTHE SECURITIES EXCHANGE ACT OF 1934, MAKING FINDINGS, ANDIMPOSING A CEASE-AND-DESIST ORDER ("ORDER").


No

Sanctions Ordered: Monetary/Fine $39,000,000.00Disgorgement/RestitutionCease and Desist/Injunction









Cease and Desist


DISGORGEMENT, CIVIL MONETARY PENALTY, AND PAYMENT OFPREJUDGMENT INTEREST.




Other Product Type(s): RESIDENTIAL MORTGAGE-BACKED SECURITIES

Allegations: THE ALLEGATIONS RELATED TO CREDIT SUISSE'S SETTLEMENT OFCLAIMS AGAINST MORTGAGE ORIGINATORS INVOLVING LOANS THAT HADBEEN INCLUDED IN A NUMBER OF CREDIT SUISSE SECURITIZATIONS ANDITS ALLEGED FAILURE TO DISCLOSE THIS PRACTICE TO INVESTORS. THEALLEGATIONS ALSO RELATED TO CREDIT SUISSE'S OBLIGATIONS TODEMAND REPURCHASE BY MORTGAGE ORIGINATORS WITH RESPECT TOCERTAIN DELINQUENT LOANS IN TWO 2006 SECURITIZATIONS.



Resolution:

Other Sanctions Ordered: PAYMENT OF PREJUDGMENT INTEREST

Sanction Details: THE APPLICANT, TOGETHER WITH CERTAIN AFFILIATES, SHALL, JOINTLYAND SEVERALLY, WITHIN TEN (10) BUSINESS DAYS OF THE ENTRY OF THENOVEMBER 16, 2012 ORDER, PAY DISGORGEMENT OF $55,747,769,PREJUDGMENT INTEREST OF $13,000,000, AND A CIVIL MONEY PENALTY INTHE AMOUNT OF $33,000,000. IN ADDITION, THE APPLICANT, TOGETHERWITH A CERTAIN AFFILIATE, SHALL, JOINTLY AND SEVERALLY, WITHIN TEN(10) BUSINESS DAYS OF THE ENTRY OF THE NOVEMBER 16, 2012 ORDER,PAY DISGORGEMENT OF $10,056,561, PREJUDGMENT INTEREST OF$2,200,000, AND A CIVIL MONEY PENALTY IN THE AMOUNT OF $6,000,000.

Firm Statement ON NOVEMBER 16, 2012, CREDIT SUISSE REACHED A SETTLEMENT WITHTHE SEC THAT RESOLVES INVESTIGATIONS RELATING TO RESIDENTIALMORTGAGE-BACKED SECURITIES TRANSACTIONS. IN A SETTLEDADMINISTRATIVE PROCEEDING, THE SEC CHARGED CREDIT SUISSE WITHENGAGING IN NEGLIGENT CONDUCT. CREDIT SUISSE NEITHER ADMITSNOR DENIES THE SEC'S ALLEGATIONS. AS PART OF THE SETTLEMENT,CREDIT SUISSE HAS AGREED TO PAY APPROXIMATELY USD 120 MILLIONWHICH WAS RECORDED IN THE THIRD QUARTER OF 2012 AS A LITIGATIONPROVISION.

Sanctions Ordered: Monetary/Fine $39,000,000.00Disgorgement/RestitutionCease and Desist/Injunction

Settled





www.finra.org/brokercheck User GuidanceON NOVEMBER 16, 2012, CREDIT SUISSE REACHED A SETTLEMENT WITHTHE SEC THAT RESOLVES INVESTIGATIONS RELATING TO RESIDENTIALMORTGAGE-BACKED SECURITIES TRANSACTIONS. IN A SETTLEDADMINISTRATIVE PROCEEDING, THE SEC CHARGED CREDIT SUISSE WITHENGAGING IN NEGLIGENT CONDUCT. CREDIT SUISSE NEITHER ADMITSNOR DENIES THE SEC'S ALLEGATIONS. AS PART OF THE SETTLEMENT,CREDIT SUISSE HAS AGREED TO PAY APPROXIMATELY USD 120 MILLIONWHICH WAS RECORDED IN THE THIRD QUARTER OF 2012 AS A LITIGATIONPROVISION.


i






Docket/Case Number: HBD# 12-ARCA-7



Allegations: **07/03/2012**OFFER OF SETTLEMENT AND CONSENT FILED BY THE LEGALSECTION OF THE FINANCIAL INDUSTRY REGULATORY AUTHORITY MARKETREGULATION DEPARTMENT AND PENDING. FOR THE SOLE PURPOSE OFSETTLING THIS DISCIPLINARY PROCEEDING, WITHOUT ADJUDICATION OFANY ISSUES OF LAW OR FACT, AND WITHOUT ADMITTING OR DENYING ANYALLEGATIONS OR FINDINGS REFERRED TO THEREIN, CREDIT SUISSESECURITIES (USA) LLC STIPULATED THAT IT: 1.VIOLATED NYSE ARCAOPTIONS RULE 6.8 FROM APRIL 3 THROUGH APRIL 13, 2009 AND FROMJUNE 9 TO JULY 30, 2009 BY EFFECTING OPENING TRANSACTIONS FOR IN-CONCERT CUSTOMER ACCOUNTS THAT EXCEEDED THE 250,000CONTRACT POSITION LIMIT IN CITIGROUP, INC. OPTIONS. 2. VIOLATEDNYSE ARCA OPTIONS RULE 11.18 FROM APRIL 1, 2009 TO JULY 30, 2009 BYFAILING TO ESTABLISH AND MAINTAIN ADEQUATE SUPERVISORYPROCEDURES, INCLUDING WRITTEN PROCEDURES, AND A SYSTEM OFFOLLOW-UP AND REVIEW DESIGNED TO REASONABLY ENSURECOMPLIANCE WITH APPLICABLE POSITION LIMITS. STIPULATEDSANCTION: CENSURE AND FINE IN THE AMOUNT OF $30,000.



Resolution:


No

Decision







Sanction Details: **08/03/2012**DECISION NO. 12-ARCA-7 ISSUED BY THE NYSE ARCAHEARING BOARD. : DURING THE PERIOD OF APRIL 1, 2009 THROUGH JULY30, 2009, CREDIT SUISSE SECURITIES (USA) LLC VIOLATED (I) NYSE AREAOPTION RULE 6.8 BY EFFECTING OPENING TRANSACTIONS FOR IN-CONCERT CUSTOMER ACCOUNTS THAT EXCEEDED THE 250,000CONTRACT POSITION LIMIT IN CITIGROUP, INC. OPTIONS, AND (II) NYSEAREA OPTIONS RULE 11.18 BY FAILING TO ESTABLISH AND MAINTAINADEQUATE SUPERVISORY PROCEDURES, INCLUDING WRITTENPROCEDURES, AND A SYSTEM OF FOLLOW-UP AND REVIEW DESIGNED TOREASONABLY ENSURE COMPLIANCE WITH APPLICABLE POSITION LIMITS.RESPONDENT CONSENTED TO A CENSURE AND A $30,000 FINE. THISDECISION IS FINAL AS THE DATE OF ISSUANCE OF THE DECISION.

Regulator Statement **08/03/2012**THIS DECISION IS FINAL AS THE DATE OF ISSUANCE OF THEDECISION.


No



Initiated By: NYSE ARCA, INC

Allegations: **07/03/2012**OFFER OF SETTLEMENT AND CONSENT FILED BY THE LEGALSECTION OF THE FINANCIAL INDUSTRY REGULATORY AUTHORITY MARKETREGULATION DEPARTMENT AND PENDING. FOR THE SOLE PURPOSE OFSETTLING THIS DISCIPLINARY PROCEEDING, WITHOUT ADJUDICATION OFANY ISSUES OF LAW OR FACT, AND WITHOUT ADMITTING OR DENYING ANYALLEGATIONS OR FINDINGS REFERRED TO THEREIN, CREDIT SUISSESECURITIES (USA) LLC STIPULATED THAT IT: 1.VIOLATED NYSE ARCAOPTIONS RULE 6.8 FROM APRIL 3 THROUGH APRIL 13, 2009 AND FROMJUNE 9 TO JULY 30, 2009 BY EFFECTING OPENING TRANSACTIONS FOR IN-CONCERT CUSTOMER ACCOUNTS THAT EXCEEDED THE 250,000CONTRACT POSITION LIMIT IN CITIGROUP, INC. OPTIONS. 2. VIOLATEDNYSE OPTIONS RULE 11.18 FROM APRIL 1, 2009 TO JULY 31, 2009 AS THEWRITTEN SUPERVISORY PROCEDURES WERE INADEQUATE AT THE TIMETO ENSURE COMPLIANCE WITH APPLICABLE POSITION LIMITS.STIPULATED SANCTION: CENSURE AND FINE IN THE AMOUNT OF $30,000.







Initiated By: NYSE ARCA, INC




Docket/Case Number: HBD# 12-ARCA-7




Resolution:


Sanction Details: **08/03/2012**DECISION NO. 12-ARCA-7 ISSUED BY THE NYSE ARCAHEARING BOARD. : DURING THE PERIOD OF APRIL 1, 2009 THROUGH JULY30, 2009, CREDIT SUISSE SECURITIES (USA) LLC VIOLATED (I) NYSE AREAOPTION RULE 6.8 BY EFFECTING OPENING TRANSACTIONS FOR IN-CONCERT CUSTOMER ACCOUNTS THAT EXCEEDED THE 250,000CONTRACT POSITION LIMIT IN CITIGROUP, INC. OPTIONS, AND (II) NYSEOPTIONS RULE 11.18 FROM APRIL 1, 2009 TO JULY 31, 2009 AS THEWRITTEN SUPERVISORY PROCEDURES WERE INADEQUATE AT THE TIMETO ENSURE COMPLIANCE WITH APPLICABLE POSITION LIMITS.RESPONDENT CONSENTED TO A CENSURE AND A $30,000 FINE. THISDECISION IS FINAL AS THE DATE OF ISSUANCE OF THE DECISION.

Firm Statement **08/03/2012**THIS DECISION IS FINAL AS THE DATE OF ISSUANCE OF THEDECISION.


Decision


i


Allegations: THIS ACTION BY THE ILLINOIS SECURITIES DEPARTMENT IS PART OF THEGLOBAL SETTLEMENT THAT CREDIT SUISSE SECURITIES (USA) LLCREACHED IN 2008 WITH A MULTISTATE TASK FORCE COMPOSED OFMEMBERS OF THE NORTH AMERICAN SECURITIES ADMINISTRATORSASSOCIATION INC. AND THE NEW YORK ATTORNEY GENERAL REGARDINGTHE MARKETING AND SALE OF AUCTION RATE SECURITIES.







Initiated By: ILLINOIS SECURITIES DEPARTMENT


Cease and Desist



Docket/Case Number: NO. 0900085


Other Product Type(s): AUCTION RATE SECURITIES

THIS ACTION BY THE ILLINOIS SECURITIES DEPARTMENT IS PART OF THEGLOBAL SETTLEMENT THAT CREDIT SUISSE SECURITIES (USA) LLCREACHED IN 2008 WITH A MULTISTATE TASK FORCE COMPOSED OFMEMBERS OF THE NORTH AMERICAN SECURITIES ADMINISTRATORSASSOCIATION INC. AND THE NEW YORK ATTORNEY GENERAL REGARDINGTHE MARKETING AND SALE OF AUCTION RATE SECURITIES.


Resolution:

Other Sanctions Ordered: UNDERTAKINGS

Sanction Details: WITHOUT ADMITTING ADMITS NOR DENIES THE FINDINGS OF FACT ANDCONCLUSIONS OF LAW, THE FIRM CONSENTED TO THE ENTRY OF THEORDER DIRECTING IT, AMONG OTHER THINGS, TO CEASE AND DESISTFROM VIOLATIONS OF THE ILLINOIS SECURITIES LAW OF 1953 AND TOCOMPLY WITH CERTAIN UNDERTAKINGS, INCLUDING OFFERING TO BUYBACK ELIGIBLE AUCTION RATE SECURITIES FROM CERTAIN INVESTORS.IN JULY 2012, THE FIRM PAID THE ILLINOIS SECURITIES DEPARTMENT$1,307,410.16, WHICH REPRESENTS THE STATE OF ILLINOIS' ALLOCATEDPORTION OF THE TOTAL AMOUNT AGREED TO AS PART OF THE GLOBALSETTLEMENT

Firm Statement THIS ACTION BY THE ILLINOIS SECURITIES DEPARTMENT ("DEPARTMENT")IS PART OF THE GLOBAL SETTLEMENT THAT CREDIT SUISSE SECURITIES(USA) LLC (THE "FIRM") REACHED IN 2008 WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. AND THE NEW YORK ATTORNEYGENERAL REGARDING THE MARKETING AND SALE OF AUCTION RATESECURITIES ("ARS"). IN THIS INSTANCE, THE FIRM-WITHOUT ADMITTINGOR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAW-CONSENTED TO THE ENTRY OF AN ORDER ("CONSENT ORDER")PURSUANT TO SECTIONS 8.E(1)(B) AND 8.E.(1)(E)(1) OF THE ILLINOISSECURITIES LAW OF 1953 ("ILCS"). AMONG OTHER THINGS, THE CONSENTORDER DIRECTS THE FIRM TO CEASE AND DESIST FROM VIOLATIONS OFTHE ILCS AND TO COMPLY WITH CERTAIN UNDERTAKINGS, INCLUDINGOFFERING TO BUY BACK ELIGIBLE ARS FROM CERTAIN INVESTORS. INJULY 2012, THE FIRM PAID THE DEPARTMENT $1,307,410.16, WHICHREPRESENTS THE STATE OF ILLINOIS' ALLOCATED PORTION OF THETOTAL AMOUNT AGREED TO AS PART OF THE GLOBAL SETTLEMENT. THECONSENT ORDER PROVIDES THAT IT IS NOT INTENDED TO BE THE BASISFOR ANY DISQUALIFICATIONS UNDER STATE OR FEDERAL SECURITIESLAW, OR UNDER THE RULES OF ANY SELF-REGULATORY ORGANIZATION.

Sanctions Ordered: Monetary/Fine $1,307,410.16Cease and Desist/Injunction

Consent






THIS ACTION BY THE ILLINOIS SECURITIES DEPARTMENT ("DEPARTMENT")IS PART OF THE GLOBAL SETTLEMENT THAT CREDIT SUISSE SECURITIES(USA) LLC (THE "FIRM") REACHED IN 2008 WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. AND THE NEW YORK ATTORNEYGENERAL REGARDING THE MARKETING AND SALE OF AUCTION RATESECURITIES ("ARS"). IN THIS INSTANCE, THE FIRM-WITHOUT ADMITTINGOR DENYING THE FINDINGS OF FACT AND CONCLUSIONS OF LAW-CONSENTED TO THE ENTRY OF AN ORDER ("CONSENT ORDER")PURSUANT TO SECTIONS 8.E(1)(B) AND 8.E.(1)(E)(1) OF THE ILLINOISSECURITIES LAW OF 1953 ("ILCS"). AMONG OTHER THINGS, THE CONSENTORDER DIRECTS THE FIRM TO CEASE AND DESIST FROM VIOLATIONS OFTHE ILCS AND TO COMPLY WITH CERTAIN UNDERTAKINGS, INCLUDINGOFFERING TO BUY BACK ELIGIBLE ARS FROM CERTAIN INVESTORS. INJULY 2012, THE FIRM PAID THE DEPARTMENT $1,307,410.16, WHICHREPRESENTS THE STATE OF ILLINOIS' ALLOCATED PORTION OF THETOTAL AMOUNT AGREED TO AS PART OF THE GLOBAL SETTLEMENT. THECONSENT ORDER PROVIDES THAT IT IS NOT INTENDED TO BE THE BASISFOR ANY DISQUALIFICATIONS UNDER STATE OR FEDERAL SECURITIESLAW, OR UNDER THE RULES OF ANY SELF-REGULATORY ORGANIZATION.


i


Initiated By: AMERICAN STOCK EXCHANGE




Docket/Case Number: 12-AMEX-4



Allegations: **4/9/12** STIPULATION OF FACTS AND CONSENT TO PENALTY FILED BYTHE LEGAL SECTION OF THE MARKET REGULATION DEPARTMENT ATFINRA AND PENDING. NYSE AMEX CONSENTED TOFINDINGS: FOR THE SOLE PURPOSE OF SETTLING THIS DISCIPLINARYPROCEEDING, WITHOUT ADJUDICATION OF ANY ISSUES OF LAW OR FACT,AND WITHOUT ADMITTING OR DENYING ANY ALLEGATIONS OR FINDINGS,CREDIT SUISSE SECURITIES (USA) LLC STIPULATED THAT DURING THEPERIOD OF SEPTEMBER 15, 2006 THROUGH JUNE 30, 2008, IT: 1. VIOLATEDAMERICAN STOCK EXCHANGE RULES 30 AND 30A BY FAILING TO SUBMITACCURATE PERIODIC REPORTS WITH RESPECT TO SHORT POSITIONS INSECURITIES. 2. VIOLATED AMERICAN STOCK EXCHANGE RULE 320 BYFAILING TO ESTABLISH, MAINTAIN, ENFORCE AND KEEP CURRENT ASYSTEM OF COMPLIANCE AND SUPERVISORY CONTROLS, REASONABLYDESIGNED TO ACHIEVE COMPLIANCE WITH THE REQUIREMENT TOSUBMIT ACCURATE PERIODIC REPORTS WITH RESPECT TO SHORTPOSITIONS IN SECURITIES. STIPULATED SANCTION: CENSURE AND FINEIN THE AMOUNT OF $40,000.











Sanction Details: **5/14/2012** DURING THE PERIOD OF SEPTEMBER 15, 2006 THROUGHJUNE 30, 2008, CREDIT SUISSE SECURITIES (USA) LLC VIOLATEDAMERICAN STOCK EXCHANGE RULES 30 AND 30A BY FAILING TO SUBMITACCURATE PERIODIC REPORTS WITH RESPECT TO SHORT POSITIONS INSECURITIES; AND VIOLATED AMERICAN STOCK EXCHANGE RULE 320 BYFAILING TO ESTABLISH, MAINTAIN, ENFORCE AND KEEP CURRENT ASYSTEM OF COMPLIANCE AND SUPERVISORY CONTROLS, REASONABLYDESIGNED TO ACHIEVE COMPLIANCE WITH THE REQUIREMENT TOSUBMIT ACCURATE PERIODIC REPORTS WITH RESPECT TO SHORTPOSITIONS IN SECURITIES. CONSENTED TO A CENSURE AND A $40,000FINE.

Regulator Statement DECISION IS FINAL AND BECAME EFFECTIVE AT THE CLOSE OF BUSINESSON JUNE 8, 2012.


No



Allegations: **4/9/12** STIPULATION OF FACTS AND CONSENT TO PENALTY FILED BYTHE LEGAL SECTION OF THE MARKET REGULATION DEPARTMENT ATFINRA AND PENDING. NYSE AMEX CONSENTED TO FINDINGS: FOR THESOLE PURPOSE OF SETTLING THIS DISCIPLINARY PROCEEDING, WITHOUTADJUDICATION OF ANY ISSUES OF LAW OR FACT, AND WITHOUTADMITTING OR DENYING ANY ALLEGATIONS OR FINDINGS, CREDIT SUISSESECURITIES (USA) LLC STIPULATED THAT DURING THE PERIOD OFSEPTEMBER 15, 2006 THROUGH JUNE 30, 2008, IT: 1. VIOLATED AMERICANSTOCK EXCHANGE RULES 30 AND 30A BY FAILING TO SUBMIT ACCURATEPERIODIC REPORTS WITH RESPECT TO SHORT POSITIONS IN SECURITIES.2. VIOLATED AMERICAN STOCK EXCHANGE RULE 320 BY FAILING TOESTABLISH, MAINTAIN, ENFORCE AND KEEP CURRENT A SYSTEM OFCOMPLIANCE AND SUPERVISORY CONTROLS, REASONABLY DESIGNED TOACHIEVE COMPLIANCE WITH THE REQUIREMENT TO SUBMIT ACCURATEPERIODIC REPORTS WITH RESPECT TO SHORT POSITIONS IN SECURITIES.STIPULATED SANCTION: CENSURE AND FINE IN THE AMOUNT OF $40,000.











Docket/Case Number: 12-AMEX-4



**4/9/12** STIPULATION OF FACTS AND CONSENT TO PENALTY FILED BYTHE LEGAL SECTION OF THE MARKET REGULATION DEPARTMENT ATFINRA AND PENDING. NYSE AMEX CONSENTED TO FINDINGS: FOR THESOLE PURPOSE OF SETTLING THIS DISCIPLINARY PROCEEDING, WITHOUTADJUDICATION OF ANY ISSUES OF LAW OR FACT, AND WITHOUTADMITTING OR DENYING ANY ALLEGATIONS OR FINDINGS, CREDIT SUISSESECURITIES (USA) LLC STIPULATED THAT DURING THE PERIOD OFSEPTEMBER 15, 2006 THROUGH JUNE 30, 2008, IT: 1. VIOLATED AMERICANSTOCK EXCHANGE RULES 30 AND 30A BY FAILING TO SUBMIT ACCURATEPERIODIC REPORTS WITH RESPECT TO SHORT POSITIONS IN SECURITIES.2. VIOLATED AMERICAN STOCK EXCHANGE RULE 320 BY FAILING TOESTABLISH, MAINTAIN, ENFORCE AND KEEP CURRENT A SYSTEM OFCOMPLIANCE AND SUPERVISORY CONTROLS, REASONABLY DESIGNED TOACHIEVE COMPLIANCE WITH THE REQUIREMENT TO SUBMIT ACCURATEPERIODIC REPORTS WITH RESPECT TO SHORT POSITIONS IN SECURITIES.STIPULATED SANCTION: CENSURE AND FINE IN THE AMOUNT OF $40,000.


Resolution:


Sanction Details: **5/14/2012** DURING THE PERIOD OF SEPTEMBER 15, 2006 THROUGHJUNE 30, 2008, CREDIT SUISSE SECURITIES (USA) LLC VIOLATEDAMERICAN STOCK EXCHANGE RULES 30 AND 30A BY FAILING TO SUBMITACCURATE PERIODIC REPORTS WITH RESPECT TO SHORT POSITIONS INSECURITIES; AND VIOLATED AMERICAN STOCK EXCHANGE RULE 320 BYFAILING TO ESTABLISH, MAINTAIN, ENFORCE AND KEEP CURRENT ASYSTEM OF COMPLIANCE AND SUPERVISORY CONTROLS, REASONABLYDESIGNED TO ACHIEVE COMPLIANCE WITH THE REQUIREMENT TOSUBMIT ACCURATE PERIODIC REPORTS WITH RESPECT TO SHORTPOSITIONS IN SECURITIES. CONSENTED TO A CENSURE AND A $40,000FINE.

Firm Statement DECISION IS FINAL AND BECAME EFFECTIVE AT THE CLOSE OF BUSINESSON JUNE 8, 2012.


Decision


i


Allegations: FAILED TO REASONABLY SUPERVISE CERTAIN OF ITS REGISTEREDSALESMEN IN THEIR COMMUNICATION OF MATERIAL INFORMATIONCONCERNING ARS; AND, ENGAGED IN DISHONEST AND UNETHICALPRACTICES IN THAT RESPONDENT MEMBER, THROUGH THE ACTIVITIESOF CERTAIN OF ITS REGISTERED SALESMAN, FAILED TO ADEQUATELYSTATE COMPLETE FACTS CONCERNING ARS.







Initiated By: DISTRICT OF COLUMBIA


Other


ADMINISTRATIVE CONSENT ORDER


Docket/Case Number: SB-CO-13-11

URL for Regulatory Action:


Other Product Type(s): AUCTION RATE SECURITIES ("ARS")

FAILED TO REASONABLY SUPERVISE CERTAIN OF ITS REGISTEREDSALESMEN IN THEIR COMMUNICATION OF MATERIAL INFORMATIONCONCERNING ARS; AND, ENGAGED IN DISHONEST AND UNETHICALPRACTICES IN THAT RESPONDENT MEMBER, THROUGH THE ACTIVITIESOF CERTAIN OF ITS REGISTERED SALESMAN, FAILED TO ADEQUATELYSTATE COMPLETE FACTS CONCERNING ARS.


Resolution:

Other Sanctions Ordered: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTION AND TO THE ENTRY OF FINDINGS.; FIRMWAS FINED $30,372.98.

Sanction Details: RESPONDENT PAID FINE IN THE AMOUNT OF $30,372.98.

Regulator Statement DETAILS OF THE INVESTIGATION CAN BE FOUND IN ORDER NO. SB-CO-13-11.

CHECK NO. 503192 IN THE AMOUNT OF $30,372.98 RECEIVED ONDECEMBER 12,2011.


No


Order


Allegations: IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASAA, THE DISTRICT OF COLUMBIA ALLEGED THATTHE FIRM'S REGISTERED SALESMEN INACCURATELY DESCRIBEDAUCTION RATE SECURITIES ("ARS") IN VIOLATION OF THE DISTRICT OFCOLUMBIA BROKER-DEALER PROVISIONS OF THE D.C. OFFICIAL CODE(THE "CODE") SECTION 31-5602.07(A)(9) AND THE FIRM FAILED TOSUPERVISE THE COMMUNICATIONS OF ITS REGISTERED SALESMENPERTAINING TO THE SALE OF ARS IN VIOLATION OF SECTION 31-5602.07(A)(12) OF THE CODE.







Initiated By: DISTRICT OF COLUMBIA DEPARTMENT OF INSURANCE, SECURITIES ANDBANKING


Cease and Desist



Docket/Case Number: SB-CO-13-11



Allegations: IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASAA, THE DISTRICT OF COLUMBIA ALLEGED THATTHE FIRM'S REGISTERED SALESMEN INACCURATELY DESCRIBEDAUCTION RATE SECURITIES ("ARS") IN VIOLATION OF THE DISTRICT OFCOLUMBIA BROKER-DEALER PROVISIONS OF THE D.C. OFFICIAL CODE(THE "CODE") SECTION 31-5602.07(A)(9) AND THE FIRM FAILED TOSUPERVISE THE COMMUNICATIONS OF ITS REGISTERED SALESMENPERTAINING TO THE SALE OF ARS IN VIOLATION OF SECTION 31-5602.07(A)(12) OF THE CODE.


Resolution:


Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THECONSENT ORDER, AND CONSENTS TO THE ENTRY OF THE CONSENTORDER BY THE DISTRICT OF COLUMBIA DEPARTMENT OF INSURANCE,SECURITIES AND BANKING.

Firm Statement THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE DISTRICT OF COLUMBIA DEPARTMENT OFINSURANCE, SECURITIES AND BANKING (THE "DEPARTMENT") ALLEGEDTHAT THE FIRM'S CONDUCT IN CONNECTION WITH THE MARKETING ANDSALE OF ARS TO RETAIL AND OTHER CUSTOMERS VIOLATED THEDISTRICT OF COLUMBIA BROKER-DEALER PROVISIONS OF THE D.C.OFFICIAL CODE (THE "CODE") SECTIONS 31-5602.07(A)(9) AND 31-5602.07(A)(12). WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRMAGREED TO CEASE AND DESIST FROM VIOLATING THE CODE AND TOCERTAIN UNDERTAKINGS, INCLUDING OFFERING TO BUY BACK ELIGIBLEARS FROM CERTAIN INDIVIDUAL INVESTORS. THE FIRM ALSO AGREED TOPAY THE DEPARTMENT A SUM IN THE AMOUNT OF $30,372.98, THEDISTRICT OF COLUMBIA'S ALLOCATED PORTION OF THE AMOUNT AGREEDTO WITH NASAA. FINALLY, THE DEPARTMENT AND THE FIRM AGREED THATTHE CONSENT ORDER WOULD NOT SUBJECT THE FIRM TO ANYDISQUALIFICATIONS UNDER THE FEDERAL SECURITIES LAWS, WHICH WASALSO PART OF THE AGREEMENT WITH NASAA.


Consent






THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE DISTRICT OF COLUMBIA DEPARTMENT OFINSURANCE, SECURITIES AND BANKING (THE "DEPARTMENT") ALLEGEDTHAT THE FIRM'S CONDUCT IN CONNECTION WITH THE MARKETING ANDSALE OF ARS TO RETAIL AND OTHER CUSTOMERS VIOLATED THEDISTRICT OF COLUMBIA BROKER-DEALER PROVISIONS OF THE D.C.OFFICIAL CODE (THE "CODE") SECTIONS 31-5602.07(A)(9) AND 31-5602.07(A)(12). WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRMAGREED TO CEASE AND DESIST FROM VIOLATING THE CODE AND TOCERTAIN UNDERTAKINGS, INCLUDING OFFERING TO BUY BACK ELIGIBLEARS FROM CERTAIN INDIVIDUAL INVESTORS. THE FIRM ALSO AGREED TOPAY THE DEPARTMENT A SUM IN THE AMOUNT OF $30,372.98, THEDISTRICT OF COLUMBIA'S ALLOCATED PORTION OF THE AMOUNT AGREEDTO WITH NASAA. FINALLY, THE DEPARTMENT AND THE FIRM AGREED THATTHE CONSENT ORDER WOULD NOT SUBJECT THE FIRM TO ANYDISQUALIFICATIONS UNDER THE FEDERAL SECURITIES LAWS, WHICH WASALSO PART OF THE AGREEMENT WITH NASAA.


i


Allegations: SEC SECTION 17(A) OF EXCHANGE ACT AND RULE 17A-3, SECREGULATION SHO AND RULE 203(B)( 1) OF REG SHO, RULE 200(G) OF REGSHO, FINRA RULES 2010, 7230A, 7330, 7410(N), 7440, 7450(A), 8211, 8213,NASD RULES 2110, 3010, 3110(A), 6130, 6951(N), 6954, 6955(A), 8211, 8213:THE FIRM VIOLATED THE LOCATE REQUIREMENT ON AN ONGOING BASISACROSS MANY OF ITS TRADING SYSTEMS, AGGREGATION UNITS ANDDESKS FOR AN EXTENDED PERIOD OF TIME. THE FIRM IMPROPERLYPROGRAMMED THE TRADING SYSTEMS USED BY ITS AGGREGATIONUNITS SO THAT SHORT SALE ORDERS COULD BE ENTERED FOR ANUMBER OF SHARES IN EXCESS OF THE LOCATE GRANTED AND SO THATLOCATED SHARES AVAILABLE WERE NOT DECREASED TO ACCOUNT FORSHORT SALE ORDERS LIVE IN THE MARKET BUT UNEXECUTED. INSTEAD,THESE TRADING SYSTEMS DECREASED THE LOCATED SHARES AVAILABLEONLY BY THE NUMBER OF SHARES EXECUTED AS THE RESULT OF SHORTSALE ORDERS. THE RESULT OF THIS PROGRAMMING WAS THAT EACH OFTHESE AGGREGATION UNITS ENTERED AND HAD OPEN IN THE MARKETSHORT SALE ORDERS THAT, SINGULARLY OR JOINTLY, EXCEEDEDAVAILABLE LOCATED SHARES. AS A RESULT, SHORT SALES WEREEXECUTED WITHOUT A VALID LOCATE. ONLY AFTER FINRA IDENTIFIEDNUMEROUS UNEXPLAINED SHORT SALE VIOLATIONS DID THE FIRMCORRECT THIS VIOLATIVE USE OF LOCATES. THE TRADING SYSTEMSUSED BY THE FIRM'S AGGREGATION UNITS FAILED TO RECOGNIZE WHENA LOCATE REQUEST HAD BEEN REJECTED. DUE TO A DELAY IN THEAVAILABILITY OF AN AGGREGATION UNIT'S APPROVAL LIST FOR THECURRENT TRADING DAY, ON SEVERAL TRADING DAYS THE AGGREGATIONUNIT IMPROPERLY USED THE PRIOR DAY'S APPROVAL LIST AS THE BASISFOR SHORT SALE LOCATES. ORDER ENTRY SYSTEMS UTILIZED BY THEFIRM'S AGGREGATION UNITS DID NOT HAVE THE FUNCTIONALITY TOAUTOMATICALLY BLOCK OR STOP A SHORT SALE ORDER FROM BEINGRELEASED FOR EXECUTION IN THE EVENT THAT A VALID LOCATE DID NOTEXIST AT THE TIME OF ORDER ENTRY. IN ADDITION THE FIRM'SAGGREGATION UNITS ENTERED SHORT SALE ORDERS WITHOUT LOCATESIN SEVERAL STOCKS FOR WHICH A LOCATE HAD NOT EVEN BEENREQUESTED. THE FIRM PERMITTED AGGREGATION UNITS AND A TRADERON THE OPTIONS DESK IN THE DERIVATIVES AGGREGATION UNIT TOENTER ORDERS THROUGH A THIRD-PARTY TRADING SYSTEM, WHICH DIDNOT REQUIRE THE ENTRY OF LOCATE INFORMATION IN CONNECTIONWITH SHORT SALE ORDERS. THE FIRM WAS AWARE AT THE TIME THETRADING SYSTEM WAS INSTALLED THAT IT INCLUDED A FUNCTIONALITYTHAT PERMITTED THE ENTRY OF SHORT SALES WITHOUT LOCATES YETTOOK NO ACTION TO DETERMINE WHETHER LOCATES WERE OBTAINED INCONNECTION WITH SHORT SALES ENTERED THROUGH THIS SYSTEMUNTIL SEPTEMBER 2009. THE FIRM FAILED TO DEVELOP FUNCTIONALPOST-TRADE REPORTS OR ANY OTHER REVIEW SYSTEM FOR ITS ENTIRECUSTOMER AND PROPRIETARY TRADING TO IDENTIFY SHORT SALESENTERED INTO ITS ORDER ENTRY SYSTEMS WITHOUT LOCATES. THEFIRM FAILED TO PUT IN PLACE REASONABLE AND EFFECTIVE POST-TRADE EXCEPTION REPORTS TO REVIEW SHORT SALE ORDERS ENTEREDBY MULTIPLE AGGREGATION UNITS, TRADING DESKS AND TRADERS TODETERMINE WHETHER A VALID LOCATE HAD BEEN OBTAINED. THE FIRMMISAPPLIED AN EXCEPTION TO THE LOCATE REQUIREMENT BYIMPROPERLY TREATING SHORT SALES IN CERTAIN SECURITIES ASEXCEPTIONS TO THE LOCATE REQUIREMENT. THE FIRM INCORRECTLYDESIGNATED IN ITS SYSTEMS THAT IT WAS A MARKET MAKER INNUMEROUS SECURITIES, WHEN IT WAS NOT A MARKET-MAKER IN THOSESECURITIES. THE FIRM FAILED TO ADEQUATELY DOCUMENT LOCATESWHEN ITS PROGRAM TRADING UNIT/DESK ENTERED SHORT SALE HEDGEORDERS FOR ITS PRIME SERVICES CLIENT DESK WITHOUTDOCUMENTATION OF THE NUMBER OF SHARES FOR WHICH A LOCATEHAD BEEN OBTAINED OR THE TIME WHEN THE LOCATE HAD BEENOBTAINED. THE FIRM'S ORDER ENTRY SYSTEM MISMARKED SELL ORDERSIN THAT IT FAILED TO CHECK THE AGGREGATION UNIT'S POSITION TODETERMINE THE APPROPRIATE ORDER MARKING WHEN A TRADERCANCELLED AND REPLACED THE ORIGINAL ORDER TO INCREASE ITSSIZE. THE CASH/BLOCK DESK MISMARKED SHORT SALES AS LONG SALESAND LONG SALES AS SHORT SALES. (CONT. IN COMMENT SECTION)







Initiated By: FINRA



SEC SECTION 17(A) OF EXCHANGE ACT AND RULE 17A-3, SECREGULATION SHO AND RULE 203(B)( 1) OF REG SHO, RULE 200(G) OF REGSHO, FINRA RULES 2010, 7230A, 7330, 7410(N), 7440, 7450(A), 8211, 8213,NASD RULES 2110, 3010, 3110(A), 6130, 6951(N), 6954, 6955(A), 8211, 8213:THE FIRM VIOLATED THE LOCATE REQUIREMENT ON AN ONGOING BASISACROSS MANY OF ITS TRADING SYSTEMS, AGGREGATION UNITS ANDDESKS FOR AN EXTENDED PERIOD OF TIME. THE FIRM IMPROPERLYPROGRAMMED THE TRADING SYSTEMS USED BY ITS AGGREGATIONUNITS SO THAT SHORT SALE ORDERS COULD BE ENTERED FOR ANUMBER OF SHARES IN EXCESS OF THE LOCATE GRANTED AND SO THATLOCATED SHARES AVAILABLE WERE NOT DECREASED TO ACCOUNT FORSHORT SALE ORDERS LIVE IN THE MARKET BUT UNEXECUTED. INSTEAD,THESE TRADING SYSTEMS DECREASED THE LOCATED SHARES AVAILABLEONLY BY THE NUMBER OF SHARES EXECUTED AS THE RESULT OF SHORTSALE ORDERS. THE RESULT OF THIS PROGRAMMING WAS THAT EACH OFTHESE AGGREGATION UNITS ENTERED AND HAD OPEN IN THE MARKETSHORT SALE ORDERS THAT, SINGULARLY OR JOINTLY, EXCEEDEDAVAILABLE LOCATED SHARES. AS A RESULT, SHORT SALES WEREEXECUTED WITHOUT A VALID LOCATE. ONLY AFTER FINRA IDENTIFIEDNUMEROUS UNEXPLAINED SHORT SALE VIOLATIONS DID THE FIRMCORRECT THIS VIOLATIVE USE OF LOCATES. THE TRADING SYSTEMSUSED BY THE FIRM'S AGGREGATION UNITS FAILED TO RECOGNIZE WHENA LOCATE REQUEST HAD BEEN REJECTED. DUE TO A DELAY IN THEAVAILABILITY OF AN AGGREGATION UNIT'S APPROVAL LIST FOR THECURRENT TRADING DAY, ON SEVERAL TRADING DAYS THE AGGREGATIONUNIT IMPROPERLY USED THE PRIOR DAY'S APPROVAL LIST AS THE BASISFOR SHORT SALE LOCATES. ORDER ENTRY SYSTEMS UTILIZED BY THEFIRM'S AGGREGATION UNITS DID NOT HAVE THE FUNCTIONALITY TOAUTOMATICALLY BLOCK OR STOP A SHORT SALE ORDER FROM BEINGRELEASED FOR EXECUTION IN THE EVENT THAT A VALID LOCATE DID NOTEXIST AT THE TIME OF ORDER ENTRY. IN ADDITION THE FIRM'SAGGREGATION UNITS ENTERED SHORT SALE ORDERS WITHOUT LOCATESIN SEVERAL STOCKS FOR WHICH A LOCATE HAD NOT EVEN BEENREQUESTED. THE FIRM PERMITTED AGGREGATION UNITS AND A TRADERON THE OPTIONS DESK IN THE DERIVATIVES AGGREGATION UNIT TOENTER ORDERS THROUGH A THIRD-PARTY TRADING SYSTEM, WHICH DIDNOT REQUIRE THE ENTRY OF LOCATE INFORMATION IN CONNECTIONWITH SHORT SALE ORDERS. THE FIRM WAS AWARE AT THE TIME THETRADING SYSTEM WAS INSTALLED THAT IT INCLUDED A FUNCTIONALITYTHAT PERMITTED THE ENTRY OF SHORT SALES WITHOUT LOCATES YETTOOK NO ACTION TO DETERMINE WHETHER LOCATES WERE OBTAINED INCONNECTION WITH SHORT SALES ENTERED THROUGH THIS SYSTEMUNTIL SEPTEMBER 2009. THE FIRM FAILED TO DEVELOP FUNCTIONALPOST-TRADE REPORTS OR ANY OTHER REVIEW SYSTEM FOR ITS ENTIRECUSTOMER AND PROPRIETARY TRADING TO IDENTIFY SHORT SALESENTERED INTO ITS ORDER ENTRY SYSTEMS WITHOUT LOCATES. THEFIRM FAILED TO PUT IN PLACE REASONABLE AND EFFECTIVE POST-TRADE EXCEPTION REPORTS TO REVIEW SHORT SALE ORDERS ENTEREDBY MULTIPLE AGGREGATION UNITS, TRADING DESKS AND TRADERS TODETERMINE WHETHER A VALID LOCATE HAD BEEN OBTAINED. THE FIRMMISAPPLIED AN EXCEPTION TO THE LOCATE REQUIREMENT BYIMPROPERLY TREATING SHORT SALES IN CERTAIN SECURITIES ASEXCEPTIONS TO THE LOCATE REQUIREMENT. THE FIRM INCORRECTLYDESIGNATED IN ITS SYSTEMS THAT IT WAS A MARKET MAKER INNUMEROUS SECURITIES, WHEN IT WAS NOT A MARKET-MAKER IN THOSESECURITIES. THE FIRM FAILED TO ADEQUATELY DOCUMENT LOCATESWHEN ITS PROGRAM TRADING UNIT/DESK ENTERED SHORT SALE HEDGEORDERS FOR ITS PRIME SERVICES CLIENT DESK WITHOUTDOCUMENTATION OF THE NUMBER OF SHARES FOR WHICH A LOCATEHAD BEEN OBTAINED OR THE TIME WHEN THE LOCATE HAD BEENOBTAINED. THE FIRM'S ORDER ENTRY SYSTEM MISMARKED SELL ORDERSIN THAT IT FAILED TO CHECK THE AGGREGATION UNIT'S POSITION TODETERMINE THE APPROPRIATE ORDER MARKING WHEN A TRADERCANCELLED AND REPLACED THE ORIGINAL ORDER TO INCREASE ITSSIZE. THE CASH/BLOCK DESK MISMARKED SHORT SALES AS LONG SALESAND LONG SALES AS SHORT SALES. (CONT. IN COMMENT SECTION)








Other


N/A




Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS,THEREFORE THE FIRM IS CENSURED AND FINED $1,750,000. FINE PAID INFULL JANUARY 4, 2012.

Regulator Statement THE FIRM WAS UNABLE TO QUANTIFY THE NUMBER OF SHORT SALEORDERS MISMARKED AS LONG AS THE RESULT OF PAIRS-TRADINGRELATED PROGRAMMING ERROR. AN UNANTICIPATED RESULT TO APROGRAMMING CHANGE CAUSED SEVERAL PROPRIETARY SHORT SALEORDERS ENTERED BY THE FIRM'S AGGREGATION UNIT TO BE MISMARKEDAS LONG SALES. THE UNIT FAILED TO OBTAIN LOCATES IN CONNECTIONWITH SEVERAL OF THESE MISMARKED SHORT SALE ORDERS. REVIEWSINITIATED BY THE FIRM REVEALED THAT SOME TRADERS ON THE ETFDESK, AND ONE TRADER ON EACH OF THE DERIVATIVES ANDCONVERTIBLES DESKS, HAD MARKED A DISPROPORTIONATELY SMALLNUMBER OF SALE ORDERS AS SHORT. THE FIRM'S TRADERS USING ATHIRD-PARTY ORDER ENTRY SYSTEM, DESIGNED PRIMARILY FORTRADING IN PINK SHEET STOCKS FAILED TO ENTER THE SHORT SALEORDER DESIGNATION. THE FIRM INACCURATELY REPORTED SELLORDERS IN VIOLATION OF ITS REPORTING REQUIREMENTS. THE FIRMMISMARKED SELL ORDERS THAT FLOWED THROUGH TO THE FIRM'S BLUESHEET SUBMISSIONS AND CAUSED THE FIRM TO MAKE INACCURATE BLUESHEET SUBMISSIONS OF TRADING DATA TO FINRA. THE FIRM FAILED TOACCURATELY REPORT SELLS ORDERS PLUS AN UN-QUANTIFIED NUMBEROF MISMARKED SELL ORDERS DUE TO VARIOUS CAUSES IN ITS BLUESHEETS. THE FIRM MISMARKED SHORT SALE ORDERS AS LONG SALESAND LONG SALE ORDERS AS SHORT SALES. THESE MISMARKINGS WEREPASSED THROUGH TO THE DATA SYSTEMS FROM WHICH THE FIRMCREATED ITS AUTOMATED CONFIRMATION TRANSACTION SERVICE (ACT)REPORTS AND ORDER AUDIT TRAIL SYSTEM (OATS) REPORTS CAUSINGTHE INACCURATE REPORTING OF SUCH SELL ORDERS. THE FIRM FAILEDTO ACCURATELY REPORT SELLS ORDERS PLUS AN UN-QUANTIFIEDNUMBER OF MISMARKED SELL ORDERS DUE TO VARIOUS CAUSES TOACT. THE FIRM FAILED TO MAINTAIN ACCURATE ACCURATELY MARKEDSALE ORDERS. IN ADDITION, DUE TO A PROGRAMMING ERRORCUSTOMER SALE ORDERS EXECUTED THROUGH RISKLESS PRINCIPALTRANSACTIONS WERE MISMARKED IN THE FIRM'S INTERNAL RECORDS.THE FIRM'S WRITTEN SUPERVISORY PROCEDURES (WSPS), RELATING TOREG SHO, WERE DEFICIENT IN THAT THEY FAILED TO SET FORTHADEQUATE PROCEDURES TO DETERMINE THAT: (I) LOCATES WEREOBTAINED FOR SHORT SALES, (II) SALE ORDERS WERE PROPERLYMARKED, AND (III) THAT THE TRADING SYSTEMS WERE REG SHOCOMPLIANT. IN ADDITION TO HAVING INADEQUATE WSPS, THE FIRMFAILED TO REASONABLY SUPERVISE ITS COMPLIANCE WITH REG SHO.THE FIRM FAILED TO: (I) PREVENT SHORT SALES FROM BEING ENTEREDWITHOUT LOCATES AND PERFORM ADEQUATE POST-TRADE MONITORINGOF SHORT SALES; (II) PREVENT THE MISMARKING OF ORDERS; AND (III)MAINTAIN INFORMATION TECHNOLOGY (IT) PROTOCOLS TO SUPERVISECHANGES AND ADDITIONS TO ITS TRADING SYSTEMS AND STRATEGIES.THE FIRM FAILED TO REASONABLY SUPERVISE TO MAINTAIN AND FAILEDTO MAINTAIN ACCURATE BOOKS AND RECORDS AND SUBMIT ACCURATETRADE DATA ON ITS BLUE SHEETS, ACT AND OATS REPORTS. THE FIRMFAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM,INCLUDING WRITTEN SUPERVISORY PROCEDURES, REASONABLYDESIGNED TO ACHIEVE COMPLIANCE WITH THE APPLICABLE SECURITIESLAWS, REGULATIONS AND SRO RULES.


No








THE FIRM WAS UNABLE TO QUANTIFY THE NUMBER OF SHORT SALEORDERS MISMARKED AS LONG AS THE RESULT OF PAIRS-TRADINGRELATED PROGRAMMING ERROR. AN UNANTICIPATED RESULT TO APROGRAMMING CHANGE CAUSED SEVERAL PROPRIETARY SHORT SALEORDERS ENTERED BY THE FIRM'S AGGREGATION UNIT TO BE MISMARKEDAS LONG SALES. THE UNIT FAILED TO OBTAIN LOCATES IN CONNECTIONWITH SEVERAL OF THESE MISMARKED SHORT SALE ORDERS. REVIEWSINITIATED BY THE FIRM REVEALED THAT SOME TRADERS ON THE ETFDESK, AND ONE TRADER ON EACH OF THE DERIVATIVES ANDCONVERTIBLES DESKS, HAD MARKED A DISPROPORTIONATELY SMALLNUMBER OF SALE ORDERS AS SHORT. THE FIRM'S TRADERS USING ATHIRD-PARTY ORDER ENTRY SYSTEM, DESIGNED PRIMARILY FORTRADING IN PINK SHEET STOCKS FAILED TO ENTER THE SHORT SALEORDER DESIGNATION. THE FIRM INACCURATELY REPORTED SELLORDERS IN VIOLATION OF ITS REPORTING REQUIREMENTS. THE FIRMMISMARKED SELL ORDERS THAT FLOWED THROUGH TO THE FIRM'S BLUESHEET SUBMISSIONS AND CAUSED THE FIRM TO MAKE INACCURATE BLUESHEET SUBMISSIONS OF TRADING DATA TO FINRA. THE FIRM FAILED TOACCURATELY REPORT SELLS ORDERS PLUS AN UN-QUANTIFIED NUMBEROF MISMARKED SELL ORDERS DUE TO VARIOUS CAUSES IN ITS BLUESHEETS. THE FIRM MISMARKED SHORT SALE ORDERS AS LONG SALESAND LONG SALE ORDERS AS SHORT SALES. THESE MISMARKINGS WEREPASSED THROUGH TO THE DATA SYSTEMS FROM WHICH THE FIRMCREATED ITS AUTOMATED CONFIRMATION TRANSACTION SERVICE (ACT)REPORTS AND ORDER AUDIT TRAIL SYSTEM (OATS) REPORTS CAUSINGTHE INACCURATE REPORTING OF SUCH SELL ORDERS. THE FIRM FAILEDTO ACCURATELY REPORT SELLS ORDERS PLUS AN UN-QUANTIFIEDNUMBER OF MISMARKED SELL ORDERS DUE TO VARIOUS CAUSES TOACT. THE FIRM FAILED TO MAINTAIN ACCURATE ACCURATELY MARKEDSALE ORDERS. IN ADDITION, DUE TO A PROGRAMMING ERRORCUSTOMER SALE ORDERS EXECUTED THROUGH RISKLESS PRINCIPALTRANSACTIONS WERE MISMARKED IN THE FIRM'S INTERNAL RECORDS.THE FIRM'S WRITTEN SUPERVISORY PROCEDURES (WSPS), RELATING TOREG SHO, WERE DEFICIENT IN THAT THEY FAILED TO SET FORTHADEQUATE PROCEDURES TO DETERMINE THAT: (I) LOCATES WEREOBTAINED FOR SHORT SALES, (II) SALE ORDERS WERE PROPERLYMARKED, AND (III) THAT THE TRADING SYSTEMS WERE REG SHOCOMPLIANT. IN ADDITION TO HAVING INADEQUATE WSPS, THE FIRMFAILED TO REASONABLY SUPERVISE ITS COMPLIANCE WITH REG SHO.THE FIRM FAILED TO: (I) PREVENT SHORT SALES FROM BEING ENTEREDWITHOUT LOCATES AND PERFORM ADEQUATE POST-TRADE MONITORINGOF SHORT SALES; (II) PREVENT THE MISMARKING OF ORDERS; AND (III)MAINTAIN INFORMATION TECHNOLOGY (IT) PROTOCOLS TO SUPERVISECHANGES AND ADDITIONS TO ITS TRADING SYSTEMS AND STRATEGIES.THE FIRM FAILED TO REASONABLY SUPERVISE TO MAINTAIN AND FAILEDTO MAINTAIN ACCURATE BOOKS AND RECORDS AND SUBMIT ACCURATETRADE DATA ON ITS BLUE SHEETS, ACT AND OATS REPORTS. THE FIRMFAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM,INCLUDING WRITTEN SUPERVISORY PROCEDURES, REASONABLYDESIGNED TO ACHIEVE COMPLIANCE WITH THE APPLICABLE SECURITIESLAWS, REGULATIONS AND SRO RULES.


Initiated By: FINANCIAL INDUSTRY REGULATORY AUTHORITY, INC. (FINRA)


Allegations: FINRA ALLEGED THAT THE FIRM DID NOT COMPLY WITH SECTION 17(A)AND RULE 17A-3 OF THE EXCHANGE ACT; RULES 203(B)(1) AND 200(G) OFREGULATION SHO; FINRA RULES 2010, 7230A, 7330, 7410(N), 7440, 7450(A),8211, 8213; AND NASD RULES 2110, 3010, 3110(A), 6130, 6591(N), 6954,6955(A), 8211, 8213.










CENSURE





Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE ENTRY OF THE DESCRIBED SANCTIONS AND FINDINGS. THE FIRMWAS CENSURED AND PAID A FINE IN THE AMOUNT OF $1,750,000 INWHOLE.

Firm Statement THIS ACTION WAS RESOLVED ON DECEMBER 27, 2011 VIA THE EXECUTIONOF AN AWC. WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRMCONSENTED TO THE DESCRIBED SANCTIONS AND FINDINGS. THE FIRMWAS CENSURED AND PAID A FINE IN THE AMOUNT OF $1,750,000 INWHOLE. FINRA FOUND THAT DURING THE PERIOD COVERING, IN WHOLEOR IN PART, JUNE 1, 2006 THROUGH AT LEAST DECEMBER 2010, THE FIRMFAILED TO COMPLY WITH RULE 200(G) OF REGULATION SHO, NASD RULE2110, AND FINRA RULE 2010 BY MISMARKING AS LONG/SHORT AT LEAST48,700 SALE ORDERS PLUS AN UNQUANTIFIED NUMBER OF SALE ORDERSAND WITH RULE 203(B)(1) OF REGULATION SHO, NASD RULE 2110, ANDFINRA RULE 2010 BY ENTERING APPROXIMATELY 9.92 MILLION SHORTSALE ORDERS PLUS AN UNQUANTIFIED NUMBER OF ORDERS WITHOUTLOCATES. AS A RESULT OF THE MISMARKED SALE ORDERS, THE FIRMFAILED TO COMPLY WITH SEC AND FINRA RECORDKEEPING RULES ANDFINRA REPORTING RULES RELATED TO BLUE SHEETS, ACT, AND OATS.THE FIRM FAILED TO COMPLY WITH NASD RULES 3010 AND 2110 ANDFINRA RULE 2010 IN THAT IT DID NOT ESTABLISH AND MAINTAIN ASUPERVISORY SYSTEM, INCLUDING WRITTEN SUPERVISORYPROCEDURES, REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHRELEVANT SECURITIES LAWS, REGULATIONS AND SRO RULES BECAUSEIT DID NOT DETECT OR PREVENT THE ENTRY OF SHORT SALES WITHOUTLOCATES, MISMARKED ORDERS, AND TRADING SYSTEM PROGRAMMINGISSUES THAT CONTRIBUTED TO THE LOCATE AND ORDER MARKINGVIOLATIONS.









THIS ACTION WAS RESOLVED ON DECEMBER 27, 2011 VIA THE EXECUTIONOF AN AWC. WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRMCONSENTED TO THE DESCRIBED SANCTIONS AND FINDINGS. THE FIRMWAS CENSURED AND PAID A FINE IN THE AMOUNT OF $1,750,000 INWHOLE. FINRA FOUND THAT DURING THE PERIOD COVERING, IN WHOLEOR IN PART, JUNE 1, 2006 THROUGH AT LEAST DECEMBER 2010, THE FIRMFAILED TO COMPLY WITH RULE 200(G) OF REGULATION SHO, NASD RULE2110, AND FINRA RULE 2010 BY MISMARKING AS LONG/SHORT AT LEAST48,700 SALE ORDERS PLUS AN UNQUANTIFIED NUMBER OF SALE ORDERSAND WITH RULE 203(B)(1) OF REGULATION SHO, NASD RULE 2110, ANDFINRA RULE 2010 BY ENTERING APPROXIMATELY 9.92 MILLION SHORTSALE ORDERS PLUS AN UNQUANTIFIED NUMBER OF ORDERS WITHOUTLOCATES. AS A RESULT OF THE MISMARKED SALE ORDERS, THE FIRMFAILED TO COMPLY WITH SEC AND FINRA RECORDKEEPING RULES ANDFINRA REPORTING RULES RELATED TO BLUE SHEETS, ACT, AND OATS.THE FIRM FAILED TO COMPLY WITH NASD RULES 3010 AND 2110 ANDFINRA RULE 2010 IN THAT IT DID NOT ESTABLISH AND MAINTAIN ASUPERVISORY SYSTEM, INCLUDING WRITTEN SUPERVISORYPROCEDURES, REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHRELEVANT SECURITIES LAWS, REGULATIONS AND SRO RULES BECAUSEIT DID NOT DETECT OR PREVENT THE ENTRY OF SHORT SALES WITHOUTLOCATES, MISMARKED ORDERS, AND TRADING SYSTEM PROGRAMMINGISSUES THAT CONTRIBUTED TO THE LOCATE AND ORDER MARKINGVIOLATIONS.


i


Allegations: NASD RULES 2110, 2210, 2211, AND 3010: THE FIRM MAINTAINED A PRIVATEBANKING USA UNIT (PBUSA) THAT OFFERED AND SOLD ALTERNATIVEINVESTMENTS, INCLUDING HEDGE FUNDS AND FUNDS OF HEDGE FUNDS,TO CUSTOMERS. FUNDS OF HEDGE FUNDS ARE INVESTMENT COMPANIESTHAT MAY BE REGISTERED CLOSED-END FUNDS OR UNREGISTEREDFUNDS THAT CONTAIN LARGELY UNREGISTERED HEDGE FUNDS ASUNDERLYING INVESTMENTS. THE FIRM MARKETED THESE PRODUCTSPRIMARILY TO HIGH NET WORTH INDIVIDUALS AND INSTITUTIONS THATMET THE ACCREDITED INVESTOR STANDARD AS DEFINED BY THESECURITIES ACT OF 1933 AND/OR THE QUALIFIED PURCHASER STANDARDUNDER THE INVESTMENT COMPANY ACT OF 1940.

PBUSA RELATIONSHIP MANAGERS USED A MARKETING PITCH BOOK TOMARKET THE FIRM ALTERNATIVE INVESTMENT PRODUCTS, INCLUDINGHEDGE FUNDS AND FUNDS OF HEDGE FUNDS, TO CUSTOMERS ANDPROSPECTIVE CUSTOMERS.

THE PITCH BOOK'S PURPOSE WAS TO INTRODUCE QUALIFIED, HIGH NETWORTH CUSTOMERS AND PROSPECTIVE CUSTOMERS TO, AMONG OTHERTHINGS, THE VARIOUS TYPES OF HEDGE FUNDS AND FUNDS OF HEDGEFUNDS OFFERED BY THE FIRM. THE PITCH BOOK DESCRIBED IN GENERALTERMS THE BENEFITS OF THE VARIOUS PRODUCT CATEGORIES FORPBUSA CUSTOMERS, CONTAINED A DISCUSSION OF HEDGE FUNDS ASPART OF AN OVERALL INVESTMENT PORTFOLIO, PROVIDED BRIEFOVERVIEW INFORMATION ABOUT CERTAIN REPRESENTATIVE OFFERINGS,DESCRIBED THE GENERAL DUE DILIGENCE PROCESS AT THE FIRM, ANDCONTAINED A SUMMARY DESCRIPTION OF ALTERNATIVE INVESTMENTOFFERINGS AT THE FIRM. THE PITCH BOOK WAS OFTEN USED BY PBUSAREGISTERED REPRESENTATIVES TO GUIDE THEIR DISCUSSIONS ATINTRODUCTORY PRESENTATIONS WITH PROSPECTIVE OR EXISTINGCUSTOMERS AND TO DESCRIBE THE FIRM'S OFFERINGS OF ANDCAPABILITIES WITH RESPECT TO ALTERNATIVE INVESTMENTS. THE PITCHBOOK CONTAINED A NUMBER OF STATEMENTS REGARDING THE FIRM'SDUE DILIGENCE EFFORTS. IN PARTICULAR, DURING THE PERIOD FROMAPPROXIMATELY NOVEMBER 2007 TO DECEMBER 2008, THE PITCH BOOKREPRESENTED THAT THE FIRM HAD PERFORMED OR WAS PERFORMINGCONTINUOUS AND ONGOING DUE DILIGENCE OF HEDGE FUNDS ANDFUNDS OF HEDGE FUND PRODUCTS.THE STATEMENTS WERE NOT ACCURATE. IN FACT, FOR CERTAIN FUNDS,THE FIRM PERFORMED LITTLE ONGOING DUE DILIGENCE AND WHEN ITWAS PERFORMED IT WAS DONE ON A SPORADIC AND IRREGULAR BASIS.IN THE CASE OF AT LEAST ONE FUND, THE FIRM DID NOT PERFORM ANYONGOING DUE DILIGENCE.IN ADDITION, DURING THE PERIOD FROM APPROXIMATELY NOVEMBER2007 TO DECEMBER 2008, THE FIRM FAILED TO HAVE SUFFICIENTPROCEDURES AND SYSTEMS TO ENSURE THAT THE DUE DILIGENCEEFFORTS IT PROMISED IN THE MATERIALS WERE OCCURRING. IN FACT,THE FIRM DID NOT MAINTAIN ANY WRITTEN PROCEDURES DETAILINGSPECIFIC STEPS AND REQUIREMENTS FOR UNDERTAKING, MONITORING,OR ENSURING THAT THE DUE DILIGENCE ACTIVITIES ITS MATERIALSSTATED IT WOULD UNDERTAKE WERE IN FACT OCCURRING. THE FIRMTHUS FAILED TO ESTABLISH AND MAINTAIN PROCEDURES REASONABLYDESIGNED TO ENSURE THAT THE MATERIALS WERE ACCURATE AND THATIT WAS PERFORMING THE DUE DILIGENCE IT REPRESENTED TOCUSTOMERS IT WOULD PERFORM.







Initiated By: FINRA


Other


N/A




Other Product Type(s): HEDGE FUNDS

NASD RULES 2110, 2210, 2211, AND 3010: THE FIRM MAINTAINED A PRIVATEBANKING USA UNIT (PBUSA) THAT OFFERED AND SOLD ALTERNATIVEINVESTMENTS, INCLUDING HEDGE FUNDS AND FUNDS OF HEDGE FUNDS,TO CUSTOMERS. FUNDS OF HEDGE FUNDS ARE INVESTMENT COMPANIESTHAT MAY BE REGISTERED CLOSED-END FUNDS OR UNREGISTEREDFUNDS THAT CONTAIN LARGELY UNREGISTERED HEDGE FUNDS ASUNDERLYING INVESTMENTS. THE FIRM MARKETED THESE PRODUCTSPRIMARILY TO HIGH NET WORTH INDIVIDUALS AND INSTITUTIONS THATMET THE ACCREDITED INVESTOR STANDARD AS DEFINED BY THESECURITIES ACT OF 1933 AND/OR THE QUALIFIED PURCHASER STANDARDUNDER THE INVESTMENT COMPANY ACT OF 1940.

PBUSA RELATIONSHIP MANAGERS USED A MARKETING PITCH BOOK TOMARKET THE FIRM ALTERNATIVE INVESTMENT PRODUCTS, INCLUDINGHEDGE FUNDS AND FUNDS OF HEDGE FUNDS, TO CUSTOMERS ANDPROSPECTIVE CUSTOMERS.

THE PITCH BOOK'S PURPOSE WAS TO INTRODUCE QUALIFIED, HIGH NETWORTH CUSTOMERS AND PROSPECTIVE CUSTOMERS TO, AMONG OTHERTHINGS, THE VARIOUS TYPES OF HEDGE FUNDS AND FUNDS OF HEDGEFUNDS OFFERED BY THE FIRM. THE PITCH BOOK DESCRIBED IN GENERALTERMS THE BENEFITS OF THE VARIOUS PRODUCT CATEGORIES FORPBUSA CUSTOMERS, CONTAINED A DISCUSSION OF HEDGE FUNDS ASPART OF AN OVERALL INVESTMENT PORTFOLIO, PROVIDED BRIEFOVERVIEW INFORMATION ABOUT CERTAIN REPRESENTATIVE OFFERINGS,DESCRIBED THE GENERAL DUE DILIGENCE PROCESS AT THE FIRM, ANDCONTAINED A SUMMARY DESCRIPTION OF ALTERNATIVE INVESTMENTOFFERINGS AT THE FIRM. THE PITCH BOOK WAS OFTEN USED BY PBUSAREGISTERED REPRESENTATIVES TO GUIDE THEIR DISCUSSIONS ATINTRODUCTORY PRESENTATIONS WITH PROSPECTIVE OR EXISTINGCUSTOMERS AND TO DESCRIBE THE FIRM'S OFFERINGS OF ANDCAPABILITIES WITH RESPECT TO ALTERNATIVE INVESTMENTS. THE PITCHBOOK CONTAINED A NUMBER OF STATEMENTS REGARDING THE FIRM'SDUE DILIGENCE EFFORTS. IN PARTICULAR, DURING THE PERIOD FROMAPPROXIMATELY NOVEMBER 2007 TO DECEMBER 2008, THE PITCH BOOKREPRESENTED THAT THE FIRM HAD PERFORMED OR WAS PERFORMINGCONTINUOUS AND ONGOING DUE DILIGENCE OF HEDGE FUNDS ANDFUNDS OF HEDGE FUND PRODUCTS.THE STATEMENTS WERE NOT ACCURATE. IN FACT, FOR CERTAIN FUNDS,THE FIRM PERFORMED LITTLE ONGOING DUE DILIGENCE AND WHEN ITWAS PERFORMED IT WAS DONE ON A SPORADIC AND IRREGULAR BASIS.IN THE CASE OF AT LEAST ONE FUND, THE FIRM DID NOT PERFORM ANYONGOING DUE DILIGENCE.IN ADDITION, DURING THE PERIOD FROM APPROXIMATELY NOVEMBER2007 TO DECEMBER 2008, THE FIRM FAILED TO HAVE SUFFICIENTPROCEDURES AND SYSTEMS TO ENSURE THAT THE DUE DILIGENCEEFFORTS IT PROMISED IN THE MATERIALS WERE OCCURRING. IN FACT,THE FIRM DID NOT MAINTAIN ANY WRITTEN PROCEDURES DETAILINGSPECIFIC STEPS AND REQUIREMENTS FOR UNDERTAKING, MONITORING,OR ENSURING THAT THE DUE DILIGENCE ACTIVITIES ITS MATERIALSSTATED IT WOULD UNDERTAKE WERE IN FACT OCCURRING. THE FIRMTHUS FAILED TO ESTABLISH AND MAINTAIN PROCEDURES REASONABLYDESIGNED TO ENSURE THAT THE MATERIALS WERE ACCURATE AND THATIT WAS PERFORMING THE DUE DILIGENCE IT REPRESENTED TOCUSTOMERS IT WOULD PERFORM.


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS,THEREFORE, THE FIRM IS CENSURED AND FINED $350,000.


No











Initiated By: FINRA


Other


N/A




Other Product Type(s): HEDGE FUNDS

Allegations: NASD RULES 2110, 2210, 2211, AND 3010: THE FIRM'S MARKETING PITCHBOOKS FOR ALTERNATIVE INVESTMENT PRODUCTS CONTAINEDINACCURATE STATEMENTS CONCERNING THE FIRM'S DUE DILIGENCE OFHEDGE FUNDS AND FUNDS OF HEDGE FUNDS. IN ADDITION, THE FIRMFAILED TO HAVE SUFFICIENT PROCEDURES AND SYSTEMS TO ENSURETHAT THE DUE DILIGENCE EFFORTS IT REFERENCED IN THE MATERIALSWERE OCCURRING.



Resolution:






i


Allegations: IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASAA, THE STATE OF GEORGIA ALLEGED THAT THEFIRM'S AGENTS INACCURATELY DESCRIBED AUCTION RATE SECURITIES("ARS") IN VIOLATION OF THE GEORGIA UNIFORM SECURITIES ACT, (THE "ACT"), SECTION 10-5-4(A)(8) AND RULE 590-4-2-.14(1) AND THE FIRMFAILED TO SUPERVISE THE COMMUNICATIONS OF ITS AGENTSPERTAINING TO THE SALE OF ARS IN VIOLATION OF SECTION 10-5-4(A)(11)AND RULE 590-4-2-.07(1) OF THE ACT.








Initiated By: OFFICE OF THE SECRETARY OF STATE, COMMISSIONER OF SECURITIES,STATE OF GEORGIA


Cease and Desist



Docket/Case Number: ENSC-110057



Allegations: IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASAA, THE STATE OF GEORGIA ALLEGED THAT THEFIRM'S AGENTS INACCURATELY DESCRIBED AUCTION RATE SECURITIES("ARS") IN VIOLATION OF THE GEORGIA UNIFORM SECURITIES ACT, (THE "ACT"), SECTION 10-5-4(A)(8) AND RULE 590-4-2-.14(1) AND THE FIRMFAILED TO SUPERVISE THE COMMUNICATIONS OF ITS AGENTSPERTAINING TO THE SALE OF ARS IN VIOLATION OF SECTION 10-5-4(A)(11)AND RULE 590-4-2-.07(1) OF THE ACT.


Resolution:


Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THECONSENT ORDER, AND CONSENTS TO THE ENTRY OF THE CONSENTORDER BY THE GEORGIA SECURITIES DIVISION.

Firm Statement THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE GEORGIA SECURITIES DIVISION (THE "DIVISION")ALLEGED THAT THE FIRM'S CONDUCT IN CONNECTION WITH THEMARKETING AND SALE OF ARS TO RETAIL AND OTHER CUSTOMERSVIOLATED SECTIONS 10-5-4(A)(8) AND 10-5-4(A)(11) AND RULES 590-4-2-.14(1) AND 590-4-2-.07(1) OF THE ACT. WITHOUT ADMITTING OR DENYINGTHE ALLEGATIONS, THE FIRM AGREED TO CEASE AND DESIST FROMVIOLATING THE GEORGIA UNIFORM SECURITIES ACT AND TO CERTAINUNDERTAKINGS, INCLUDING OFFERING TO BUY BACK ELIGIBLE ARS FROMCERTAIN INDIVIDUAL INVESTORS. THE FIRM ALSO AGREED TO PAY THEDIVISION A SUM IN THE AMOUNT OF $139,097.47. THE $139,097.47 ISCOMPROMISED OF A $124,097.47 CIVIL PENALTY, THIS STATE'S ALLOCATEDPORTION OF THE AMOUNT AGREED TO WITH NASAA, AND A $15,000PAYMENT TO REIMBURSE THE DIVISION FOR ITS INVESTIGATIVE COSTS.FINALLY, THE DIVISION AND THE FIRM AGREED THAT THE CONSENTORDER WOULD NOT SUBJECT THE FIRM TO ANY DISQUALIFICATIONSUNDER THE FEDERAL SECURITIES LAWS, WHICH WAS ALSO PART OF THEAGREEMENT WITH NASAA.


Consent






THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE GEORGIA SECURITIES DIVISION (THE "DIVISION")ALLEGED THAT THE FIRM'S CONDUCT IN CONNECTION WITH THEMARKETING AND SALE OF ARS TO RETAIL AND OTHER CUSTOMERSVIOLATED SECTIONS 10-5-4(A)(8) AND 10-5-4(A)(11) AND RULES 590-4-2-.14(1) AND 590-4-2-.07(1) OF THE ACT. WITHOUT ADMITTING OR DENYINGTHE ALLEGATIONS, THE FIRM AGREED TO CEASE AND DESIST FROMVIOLATING THE GEORGIA UNIFORM SECURITIES ACT AND TO CERTAINUNDERTAKINGS, INCLUDING OFFERING TO BUY BACK ELIGIBLE ARS FROMCERTAIN INDIVIDUAL INVESTORS. THE FIRM ALSO AGREED TO PAY THEDIVISION A SUM IN THE AMOUNT OF $139,097.47. THE $139,097.47 ISCOMPROMISED OF A $124,097.47 CIVIL PENALTY, THIS STATE'S ALLOCATEDPORTION OF THE AMOUNT AGREED TO WITH NASAA, AND A $15,000PAYMENT TO REIMBURSE THE DIVISION FOR ITS INVESTIGATIVE COSTS.FINALLY, THE DIVISION AND THE FIRM AGREED THAT THE CONSENTORDER WOULD NOT SUBJECT THE FIRM TO ANY DISQUALIFICATIONSUNDER THE FEDERAL SECURITIES LAWS, WHICH WAS ALSO PART OF THEAGREEMENT WITH NASAA.


i


Initiated By: OFFICE OF THE SECRETARY OF THE COMMONWEALTH OFMASSACHUSETTS, SECURITIES DIVISION


Cease and Desist



Docket/Case Number: E-2011-0019



Allegations: IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASAA, THE STATE OF MASSACHUSETTS ALLEGEDTHAT THE FIRM'S AGENTS INACCURATELY DESCRIBED AUCTION RATESECURITIES ("ARS") IN VIOLATION OF THE MASSACHUSETTS UNIFORMSECURITIES ACT, (THE "ACT"), MASS. GEN LAWS CH. 110A, § 204(A)(2)(G)AND THE FIRM FAILED TO SUPERVISE THE SALE OF ARS IN VIOLATION OFMASS. GEN LAWS CH. 110A § 204(A)(2)(J).



Resolution:



Consent






Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THECONSENT ORDER, AND CONSENTS TO THE ENTRY OF THE CONSENTORDER BY THE MASSACHUSETTS SECURITIES DIVISION.

Firm Statement THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE MASSACHUSETTS SECURITIES DIVISION (THE "DIVISION") ALLEGED THAT THE FIRM'S CONDUCT IN CONNECTION WITHTHE MARKETING AND SALE OF ARS TO RETAIL AND OTHER CUSTOMERSVIOLATED MASS. GEN. LAWS CH. 110A SECTIONS 204(A)(2)(G) AND204(A)(2)(J). WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THEFIRM AGREED TO CEASE AND DESIST FROM VIOLATING THEMASSACHUSETTS UNIFORM SECURITIES ACT AND TO CERTAINUNDERTAKINGS, INCLUDING OFFERING TO BUY BACK ELIGIBLE ARS FROMCERTAIN INDIVIDUAL INVESTORS. THE FIRM ALSO AGREED TO PAY THEDIVISION A CIVIL PENALTY OF $997,480.10, THIS STATE'S ALLOCATEDPORTION OF THE AMOUNT AGREED TO WITH NASAA. FINALLY, THEDIVISION AND THE FIRM AGREED THAT THE CONSENT ORDER WOULD NOTSUBJECT THE FIRM TO ANY DISQUALIFICATIONS UNDER THE FEDERALSECURITIES LAWS, WHICH WAS ALSO PART OF THE AGREEMENT WITHNASAA.


i


Initiated By: SECURITIES DIVISION OF THE OFFICE OF THE MARYLAND ATTORNEYGENERAL


Docket/Case Number: NO. 2009-0424

Allegations: IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASAA, THE STATE OF MARYLAND ALLEGED THAT THEFIRM'S AGENTS INACCURATELY DESCRIBED AUCTION RATE SECURITIES("ARS") IN VIOLATION OF THE MARYLAND SECURITIES ACT ("M.S.A."), SEC.11-412(A)(7) AND THE FIRM FAILED TO SUPERVISE ITS REGISTEREDREPRESENTATIVES IN THEIR COMMUNICATIONS CONCERNING ARS INVIOLATION OF M.S.A., SEC. 11-412(A)(10).








Cease and Desist


Docket/Case Number: NO. 2009-0424




Resolution:


Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THECONSENT ORDER, AND CONSENTS TO THE ENTRY OF THE CONSENTORDER BY THE MARYLAND SECURITIES DIVISION.

Firm Statement THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE MARYLAND SECURITIES DIVISION (THE "DIVISION")ALLEGED THAT THE FIRM'S CONDUCT IN CONNECTION WITH THEMARKETING AND SALE OF ARS TO RETAIL AND OTHER CUSTOMERSVIOLATED M.S.A., SECTIONS 11-412(A)(7) AND 11-412(A)(10). WITHOUTADMITTING OR DENYING THE ALLEGATIONS, THE FIRM AGREED TO CEASEAND DESIST FROM VIOLATING THE MARYLAND SECURITIES ACT AND TOCERTAIN UNDERTAKINGS, INCLUDING OFFERING TO BUY BACK ELIGIBLEARS FROM CERTAIN INDIVIDUAL INVESTORS. THE FIRM ALSO AGREED TOPAY THE DIVISION A CIVIL PENALTY OF $321,579.31, THIS STATE'SALLOCATED PORTION OF THE AMOUNT AGREED TO WITH NASAA. FINALLY,THE DIVISION AND THE FIRM AGREED THAT THE CONSENT ORDER WOULDNOT SUBJECT THE FIRM TO ANY DISQUALIFICATIONS UNDER THEFEDERAL SECURITIES LAWS, WHICH WAS ALSO PART OF THE AGREEMENTWITH NASAA.


Consent


i







Initiated By: NEW JERSEY BUREAU OF SECURITIES




CEASE AND DESIST





Other Product Type(s): AUCTION RATE SECURITIES (ARS)

Allegations: IN CERTAIN INSTANCES, CREDIT SUISSE REPRESENTATIVES TOLDCERTAIN OF THE FIRM'S CUSTOMERS THAT ARS WERE LIQUIDINVESTMENTS THAT WERE ALTERNATIVES TO MONEY MARKET FUNDS ASPART OF A STRATEGY FOR CASH MANAGEMENT. SPECIFICALLY, CERTAINEMPLOYEES ACTING ON BEHALF OF CREDIT SUISSE REPRESENTED TOCERTAIN INVESTORS THAT ARS WERE HIGHLY LIQUID, HIGHLY RATEDALTERNATIVES TO MONEY MARKET INVESTMENTS AND OTHER CASH-EQUIVALENT INVESTMENTS. IN FEBRUARY 2008, CREDIT SUISSE ANDOTHER BROKER-DEALERS STOPPED SUPPORTING THE AUCTIONS.WITHOUT THE BENEFIT OF SUPPORT BIDS, THE ARS MARKET COLLAPSED,LEAVING INVESTORS WHO THOUGHT THEY WERE BUYING LIQUID, SHORT-TERM INVESTMENTSINSTEAD HOLDING LONG-TERM OR PERPETUAL SECURITIES THAT THEYWERE UNABLE TO SELL AT PAR VALUE.



Resolution:

Other Sanctions Ordered: CREDIT SUISSE ("CS") WILL HAVE OFFERED TO PURCHASE AT PAR ARSTHAT SINCE FEBRUARY 14, 2008, HAVE NOT BEEN SUCCESSFULLYAUCTIONING FROM INDIVIDUAL INVESTORS WHO PURCHASED THOSE ARSFROM OR THROUGH A CS ACCOUNT PRIOR TO FEBRUARY 14, 2008;CS SHALL HAVE PURCHASED SUCH SECURITIES FROM INVESTORS WHOACCEPTED THIS OFFER PRIOR TO DECEMBER 11, 2008, BY THAT DATE;CS SHALL HAVE KEPT SUCH OFFER OPEN UNTIL DECEMBER 31, 2009, ANDPROMPTLY SHALL HAVE PURCHASED SUCH SECURITIES FROM ANYINDIVIDUAL INVESTOR WHO ACCEPTS THE OFFER BETWEEN DECEMBER11, 2008, AND DECEMBER 31,2009;CS PROMPTLY WILL HAVE PROVIDED NOTICE TO CUSTOMERS OF THESETTLEMENT TERMS PUBLICLY ANNOUNCED ON SEPTEMBER 16, 2008,AND CS PROMPTLY WILL HAVE ESTABLISHED A DEDICATED TELEPHONEASSISTANCE LINE, WITH APPROPRIATE STAFF, TO RESPOND TOQUESTIONS FROM CUSTOMERS CONCERNING THE TERMS OF THESETTLEMENT;NO LATER THAN DECEMBER 11, 2008, ANY INDIVIDUAL INVESTOR THAT CSCOULD REASONABLY IDENTIFY WHO SOLD ARS IN A CS ACCOUNT BELOWPAR BETWEEN FEBRUARY 14, 2008, AND SEPTEMBER 16, 2008, WILL HAVEBEEN PAID BY CS THE DIFFERENCE BETWEEN PAR AND THE PRICE ATWHICH THE INDIVIDUAL INVESTOR SOLD THOSE ARS;NO LATER THAN DECEMBER 11,2008, CS SHALL HAVE NOTIFIED ALLINDIVIDUAL INVESTORS THAT A PUBLIC ARBITRATOR UNDER THEAUSPICES OF THE FINRA, WILL BE AVAILABLE FOR THE EXCLUSIVEPURPOSE OF ARBITRATING ANY INDIVIDUAL INVESTOR'S CONSEQUENTIALDAMAGES CLAIM. ARBITRATION SHALL BECONDUCTED BY PUBLIC ARBITRATORS AND CS WILL PAY ALL APPLICABLEFORUM AND FILING FEES. ANY INDIVIDUAL INVESTORS WHO CHOOSE TOPURSUE SUCH CLAIMS SHALL BEAR THE BURDEN OF PROVING THAT THEYSUFFERED CONSEQUENTIAL DAMAGES AND THAT SUCH DAMAGES WERECAUSED BY INVESTORS' INABILITY TO ACCESS FUNDS CONSISTING OFINVESTORS' ARS HOLDINGS IN CS ACCOUNTS. (CONTINUED IN #14BELOW)


No


Consent






Other Sanctions Ordered: CREDIT SUISSE ("CS") WILL HAVE OFFERED TO PURCHASE AT PAR ARSTHAT SINCE FEBRUARY 14, 2008, HAVE NOT BEEN SUCCESSFULLYAUCTIONING FROM INDIVIDUAL INVESTORS WHO PURCHASED THOSE ARSFROM OR THROUGH A CS ACCOUNT PRIOR TO FEBRUARY 14, 2008;CS SHALL HAVE PURCHASED SUCH SECURITIES FROM INVESTORS WHOACCEPTED THIS OFFER PRIOR TO DECEMBER 11, 2008, BY THAT DATE;CS SHALL HAVE KEPT SUCH OFFER OPEN UNTIL DECEMBER 31, 2009, ANDPROMPTLY SHALL HAVE PURCHASED SUCH SECURITIES FROM ANYINDIVIDUAL INVESTOR WHO ACCEPTS THE OFFER BETWEEN DECEMBER11, 2008, AND DECEMBER 31,2009;CS PROMPTLY WILL HAVE PROVIDED NOTICE TO CUSTOMERS OF THESETTLEMENT TERMS PUBLICLY ANNOUNCED ON SEPTEMBER 16, 2008,AND CS PROMPTLY WILL HAVE ESTABLISHED A DEDICATED TELEPHONEASSISTANCE LINE, WITH APPROPRIATE STAFF, TO RESPOND TOQUESTIONS FROM CUSTOMERS CONCERNING THE TERMS OF THESETTLEMENT;NO LATER THAN DECEMBER 11, 2008, ANY INDIVIDUAL INVESTOR THAT CSCOULD REASONABLY IDENTIFY WHO SOLD ARS IN A CS ACCOUNT BELOWPAR BETWEEN FEBRUARY 14, 2008, AND SEPTEMBER 16, 2008, WILL HAVEBEEN PAID BY CS THE DIFFERENCE BETWEEN PAR AND THE PRICE ATWHICH THE INDIVIDUAL INVESTOR SOLD THOSE ARS;NO LATER THAN DECEMBER 11,2008, CS SHALL HAVE NOTIFIED ALLINDIVIDUAL INVESTORS THAT A PUBLIC ARBITRATOR UNDER THEAUSPICES OF THE FINRA, WILL BE AVAILABLE FOR THE EXCLUSIVEPURPOSE OF ARBITRATING ANY INDIVIDUAL INVESTOR'S CONSEQUENTIALDAMAGES CLAIM. ARBITRATION SHALL BECONDUCTED BY PUBLIC ARBITRATORS AND CS WILL PAY ALL APPLICABLEFORUM AND FILING FEES. ANY INDIVIDUAL INVESTORS WHO CHOOSE TOPURSUE SUCH CLAIMS SHALL BEAR THE BURDEN OF PROVING THAT THEYSUFFERED CONSEQUENTIAL DAMAGES AND THAT SUCH DAMAGES WERECAUSED BY INVESTORS' INABILITY TO ACCESS FUNDS CONSISTING OFINVESTORS' ARS HOLDINGS IN CS ACCOUNTS. (CONTINUED IN #14BELOW)

Sanction Details: 1. CREDIT SUISSE'S CONDUCT DESCRIBED ABOVE CONSTITUTESDISHONEST OR UNETHICAL CONDUCT IN THE SECURITIES BUSINESS,PURSUANT TO NJ.S.A. 49:3-S8(A)(2)(VII).2. CREDIT SUISSE'S CONDUCT DESCRIBED ABOVE CONSTITUTES AFAILURE TO REASONABLY SUPERVISE ITS AGENTS, PURSUANT TO NJ.S.A.49:3-S8(A)(2)(XI).

Regulator Statement CS SHALL BE ABLE TO DEFEND ITSELF AGAINST SUCH CLAIMS; PROVIDED,HOWEVER, THAT CS SHALL NOT CONTEST IN THESE ARBITRATIONSLIABILITY RELATED TO THE SALE OF ARS; AND FURTHER PROVIDED THATCS SHALL NOT BE ABLE TO USE AS PART OF ITS DEFENSE AN INDIVIDUALINVESTOR'S DECISION NOT TO BORROW MONEY FROM CS. PUNITIVEDAMAGES SHALL NOT BE AVAILABLE IN THE ARBITRATION PROCEEDINGS;CS SHALL ENDEAVOR TO WORK WITH ISSUERS AND OTHER INTERESTEDPARTIES, INCLUDING REGULATORY AND GOVERNMENTAL ENTITIES, TOEXPEDITIOUSLY PROVIDE LIQUIDITY SOLUTIONS FOR INSTITUTIONALINVESTORS;BEGINNING DECEMBER 11, 2008, AND THEN QUARTERLY AFTER THAT, CSSHALL HAVE SUBMITTED A WRITTEN REPORT TO THE REPRESENTATIVESPECIFIED BY NASAA OUTLINING THE EFFORTS IN WHICH CS HASENGAGED AND THE RESULTS OF THOSE EFFORTS WITH RESPECT TO CS'SINSTITUTIONAL INVESTORS' HOLDINGS INARS;CS SHALL HAVE CONFERRED, AS REQUESTED, WITH THEREPRESENTATIVE SPECIFIED BY NASAA NO LESS FREQUENTLY THANQUARTERLY TO DISCUSS CS'S PROGRESS TO DATE;SUCH QUARTERLY REPORTS SHALL HAVE CONTINUED UNTIL NO LATERTHAN DECEMBER 31, 2009;






CS SHALL BE ABLE TO DEFEND ITSELF AGAINST SUCH CLAIMS; PROVIDED,HOWEVER, THAT CS SHALL NOT CONTEST IN THESE ARBITRATIONSLIABILITY RELATED TO THE SALE OF ARS; AND FURTHER PROVIDED THATCS SHALL NOT BE ABLE TO USE AS PART OF ITS DEFENSE AN INDIVIDUALINVESTOR'S DECISION NOT TO BORROW MONEY FROM CS. PUNITIVEDAMAGES SHALL NOT BE AVAILABLE IN THE ARBITRATION PROCEEDINGS;CS SHALL ENDEAVOR TO WORK WITH ISSUERS AND OTHER INTERESTEDPARTIES, INCLUDING REGULATORY AND GOVERNMENTAL ENTITIES, TOEXPEDITIOUSLY PROVIDE LIQUIDITY SOLUTIONS FOR INSTITUTIONALINVESTORS;BEGINNING DECEMBER 11, 2008, AND THEN QUARTERLY AFTER THAT, CSSHALL HAVE SUBMITTED A WRITTEN REPORT TO THE REPRESENTATIVESPECIFIED BY NASAA OUTLINING THE EFFORTS IN WHICH CS HASENGAGED AND THE RESULTS OF THOSE EFFORTS WITH RESPECT TO CS'SINSTITUTIONAL INVESTORS' HOLDINGS INARS;CS SHALL HAVE CONFERRED, AS REQUESTED, WITH THEREPRESENTATIVE SPECIFIED BY NASAA NO LESS FREQUENTLY THANQUARTERLY TO DISCUSS CS'S PROGRESS TO DATE;SUCH QUARTERLY REPORTS SHALL HAVE CONTINUED UNTIL NO LATERTHAN DECEMBER 31, 2009;




Cease and Desist






Allegations: IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASAA, THE STATE OF NEW JERSEY ALLEGED THATTHE FIRM'S AGENTS INACCURATELY DESCRIBED AUCTION RATESECURITIES ("ARS") IN VIOLATION OF THE NEW JERSEY UNIFORMSECURITIES LAW, N.J.S.A. ("N.J.S.A.") 49:3-58(A)(2)(VII) AND THE FIRMFAILED TO SUPERVISE THE SALE OF ARS IN VIOLATION OF N.J.S.A. 49:3-58(A)(2)(XI).



Resolution:



Consent







Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THECONSENT ORDER, AND CONSENTS TO THE ENTRY OF THE CONSENTORDER BY THE NEW JERSEY BUREAU OF SECURITIES.

Firm Statement THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE NEW JERSEY BUREAU OF SECURITIES (THE "BUREAU") ALLEGED THAT THE FIRM'S CONDUCT IN CONNECTION WITHTHE MARKETING AND SALE OF ARS TO RETAIL AND OTHER CUSTOMERSVIOLATED N.J.S.A. 49:3-58(A)(2)(VII) AND 49:3-58(A)(2)(XI). WITHOUTADMITTING OR DENYING THE ALLEGATIONS, THE FIRM AGREED TO CEASEAND DESIST FROM VIOLATING THE NEW JERSEY UNIFORM SECURITIESLAW AND TO CERTAIN UNDERTAKINGS, INCLUDING OFFERING TO BUYBACK ELIGIBLE ARS FROM CERTAIN INDIVIDUAL INVESTORS. THE FIRMALSO AGREED TO PAY THE BUREAU A CIVIL PENALTY OF $1,057,996.56,THIS STATE'S ALLOCATED PORTION OF THE AMOUNT AGREED TO WITHNASAA. FINALLY, THE BUREAU AND THE FIRM AGREED THAT THECONSENT ORDER WOULD NOT SUBJECT THE FIRM TO ANYDISQUALIFICATIONS UNDER THE FEDERAL SECURITIES LAWS, WHICH WASALSO PART OF THE AGREEMENT WITH NASAA.


i


Allegations: **07/21/2011** STIPULATION OF FACTS AND CONSENT TO PENALTY FILEDBY THE LEGAL SECTION OF THE MARKET REGULATION DEPARTMENT ATFINRA AND PENDING. FOR THE SOLE PURPOSE OF SETTLING THISDISCIPLINARY PROCEEDING, WITHOUT ADJUDICATION OF ANY ISSUES OFLAW OR FACT, AND WITHOUT ADMITTING OR DENYING ANY ALLEGATIONSOR FINDINGS, CREDIT SUISSE SECURITIES (USA) LLC STIPULATED THATDURING THE PERIOD OF JULY 3, 2008 THROUGH AUGUST 18, 2010, IT1.VIOLATED NYSE RULE 123C BY, FOR 94 MOC/LOC ORDERS, FAILING TOCOMPLY WITH THE REQUIREMENTS GOVERNING THE ENTRY ANDCANCELATION OF MARKET-ON-CLOSE AND LIMIT-ON-CLOSE ORDERS; AND2.VIOLATED NYSE RULE 342 BY FAILING TO REASONABLY SUPERVISE ANDIMPLEMENT ADEQUATE CONTROLS, INCLUDING A SEPARATE SYSTEM OFFOLLOW-UP AND REVIEW, REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH NYSE RULES WITH RESPECT TO THE ENTRY AND/ORCANCELLATION OF MARKET-ON-CLOSE AND LIMIT-ON-CLOSE ORDERS.STIPULATED SANCTION: CENSURE AND FINE IN THE AMOUNT OF $50,000











Docket/Case Number: 11-NYSE-05



**07/21/2011** STIPULATION OF FACTS AND CONSENT TO PENALTY FILEDBY THE LEGAL SECTION OF THE MARKET REGULATION DEPARTMENT ATFINRA AND PENDING. FOR THE SOLE PURPOSE OF SETTLING THISDISCIPLINARY PROCEEDING, WITHOUT ADJUDICATION OF ANY ISSUES OFLAW OR FACT, AND WITHOUT ADMITTING OR DENYING ANY ALLEGATIONSOR FINDINGS, CREDIT SUISSE SECURITIES (USA) LLC STIPULATED THATDURING THE PERIOD OF JULY 3, 2008 THROUGH AUGUST 18, 2010, IT1.VIOLATED NYSE RULE 123C BY, FOR 94 MOC/LOC ORDERS, FAILING TOCOMPLY WITH THE REQUIREMENTS GOVERNING THE ENTRY ANDCANCELATION OF MARKET-ON-CLOSE AND LIMIT-ON-CLOSE ORDERS; AND2.VIOLATED NYSE RULE 342 BY FAILING TO REASONABLY SUPERVISE ANDIMPLEMENT ADEQUATE CONTROLS, INCLUDING A SEPARATE SYSTEM OFFOLLOW-UP AND REVIEW, REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH NYSE RULES WITH RESPECT TO THE ENTRY AND/ORCANCELLATION OF MARKET-ON-CLOSE AND LIMIT-ON-CLOSE ORDERS.STIPULATED SANCTION: CENSURE AND FINE IN THE AMOUNT OF $50,000


Resolution:


Sanction Details: **9/14/11** DECISION NO. 11-NYSE-05 ISSUED BY NYSE HEARING BOARDDECISION: DURING THE PERIOD OF JULY 3, 2008 THROUGH AUGUST 18,2010, CREDIT SUISSE SECURITIES (USA) LLC VIOLATED NYSE RULE 123CBY FAILING TO COMPLY WITH THE REQUIREMENTS GOVERNING THEENTRY AND CANCELLATION OF MARKET-ON-CLOSE AND LIMIT-ON-CLOSEORDERS IN 94 TRANSACTIONS, AND VIOLATED NYSE RULE 342 IN THAT ITFAILED TO REASONABLY SUPERVISE AND IMPLEMENT ADEQUATECONTROLS FOR COMPLIANCE WITH NYSE RULES WITH RESPECT TO THEENTRY AND/OR CANCELLATION OF MARKET-ON-CLOSE AND LIMIT-ON-CLOSE ORDERS. CONSENT TO CENSURE AND $50,000 FINE.

Regulator Statement **9/14/11**UNLESS A REVIEW HAS BEEN REQUESTED BY ANY PERSON ORBODY AUTHORIZED BY NYSE RULE 476(G), THIS DECISION WILL BECOMEFINAL 25 CALENDAR DAYS AFTER NOTICE OF THE HEARING BOARD'SDETERMINATION HAS BEEN SERVED UPON THE RESPONDENT.**10/11/11** SINCE A REVIEW OF THE DECISION OF THE HEARING BOARDWAS NOT REQUESTED, THE DECISION BECAME FINAL AS OF THE CLOSEOF BUSINESS ON OCTOBER 10, 2011.


Decision














Allegations: **07/21/2011** STIPULATION OF FACTS AND CONSENT TO PENALTY FILEDBY THE LEGAL SECTION OF THE MARKET REGULATION DEPARTMENT ATFINRA AND PENDING. FOR THE SOLE PURPOSE OF SETTLING THISDISCIPLINARY PROCEEDING, WITHOUT ADJUDICATION OF ANY ISSUES OFLAW OR FACT, AND WITHOUT ADMITTING OR DENYING ANY ALLEGATIONSOR FINDINGS, CREDIT SUISSE SECURITIES (USA) LLC STIPULATED THATDURING THE PERIOD OF JULY 3, 2008 THROUGH AUGUST 18, 2010, IT1.VIOLATED NYSE RULE 123C BY, FOR 94 MOC/LOC ORDERS, FAILING TOCOMPLY WITH THE REQUIREMENTS GOVERNING THE ENTRY ANDCANCELATION OF MARKET-ON-CLOSE AND LIMIT-ON-CLOSE ORDERS; AND2.VIOLATED NYSE RULE 342 BY FAILING TO REASONABLY SUPERVISE ANDIMPLEMENT ADEQUATE CONTROLS, INCLUDING A SEPARATE SYSTEM OFFOLLOW-UP AND REVIEW, REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH NYSE RULES WITH RESPECT TO THE ENTRY AND/ORCANCELLATION OF MARKET-ON-CLOSE AND LIMIT-ON-CLOSE ORDERS.STIPULATED SANCTION: CENSURE AND FINE IN THE AMOUNT OF $50,000



Resolution:


Sanction Details: **9/14/11** DECISION NO. 11-NYSE-05 ISSUED BY NYSE HEARING BOARDDECISION: DURING THE PERIOD OF JULY 3, 2008 THROUGH AUGUST 18,2010, CREDIT SUISSE SECURITIES (USA) LLC VIOLATED NYSE RULE 123CBY FAILING TO COMPLY WITH THE REQUIREMENTS GOVERNING THEENTRY AND CANCELLATION OF MARKET-ON-CLOSE AND LIMIT-ON-CLOSEORDERS IN 94 TRANSACTIONS, AND VIOLATED NYSE RULE 342 IN THAT ITFAILED TO REASONABLY SUPERVISE AND IMPLEMENT ADEQUATECONTROLS FOR COMPLIANCE WITH NYSE RULES WITH RESPECT TO THEENTRY AND/OR CANCELLATION OF MARKET-ON-CLOSE AND LIMIT-ON-CLOSE ORDERS. CONSENT TO CENSURE AND $50,000 FINE.


Decision






**9/14/11** DECISION NO. 11-NYSE-05 ISSUED BY NYSE HEARING BOARDDECISION: DURING THE PERIOD OF JULY 3, 2008 THROUGH AUGUST 18,2010, CREDIT SUISSE SECURITIES (USA) LLC VIOLATED NYSE RULE 123CBY FAILING TO COMPLY WITH THE REQUIREMENTS GOVERNING THEENTRY AND CANCELLATION OF MARKET-ON-CLOSE AND LIMIT-ON-CLOSEORDERS IN 94 TRANSACTIONS, AND VIOLATED NYSE RULE 342 IN THAT ITFAILED TO REASONABLY SUPERVISE AND IMPLEMENT ADEQUATECONTROLS FOR COMPLIANCE WITH NYSE RULES WITH RESPECT TO THEENTRY AND/OR CANCELLATION OF MARKET-ON-CLOSE AND LIMIT-ON-CLOSE ORDERS. CONSENT TO CENSURE AND $50,000 FINE.

Firm Statement **9/14/11**UNLESS A REVIEW HAS BEEN REQUESTED BY ANY PERSON ORBODY AUTHORIZED BY NYSE RULE 476(G), THIS DECISION WILL BECOMEFINAL 25 CALENDAR DAYS AFTER NOTICE OF THE HEARING BOARD'SDETERMINATION HAS BEEN SERVED UPON THE RESPONDENT. **10/11/11**SINCE A REVIEW OF THE DECISION OF THE HEARING BOARD WAS NOTREQUESTED, THE DECISION BECAME FINAL AS OF THE CLOSE OFBUSINESS ON OCTOBER 10, 2011.


i


Allegations: NASD RULES 2110, 3010: REGULATION AB REQUIRED THE FIRM TOMAINTAIN A WEBSITE FOR EACH NEWLY-ISSUED SUBPRIME RESIDENTIALMORTGAGE BACKED SECURITIES ("RMBS" OR "SECURITIZATIONS") THATPRESENTED HISTORICAL DELINQUENCY DATA, ALSO KNOWN AS STATICPOOL INFORMATION, FOR PRIOR SIMILAR DEALS TO ILLUSTRATE THEPAST PERFORMANCE OF SECURITIZATIONS THAT CONTAINED SIMILARCOLLATERAL. REGULATION AB ALSO REQUIRED THAT EACH RMBSDISCLOSE THE METHOD EMPLOYED FOR CALCULATING DELINQUENCIES.THE FIRM FAILED TO PROVIDE ACCURATE DELINQUENCY RATES WITHREGARD TO 21 SUBPRIME SECURITIZATIONS THAT WERE REFERENCEDON ITS REGULATION AB WEBSITE (REG AB WEBSITE). FOR THESESECURITIZATIONS, THE REG AB WEBSITE DISPLAYED UP TO NINE MONTHSOF INACCURATE HISTORICAL DELINQUENCY DATA, FOR THE PERIOD OFJANUARY THROUGH SEPTEMBER 2006, VARIOUSLY UNDERREPORTINGAND OVERREPORTING DELINQUENCIES FOR DIFFERENTSECURITIZATIONS WITHIN THIS PERIOD. THE DELINQUENCY REPORTINGERRORS FOR SIX OF THESE SECURITIZATIONS MAY HAVE AFFECTED ANINVESTOR'S ASSESSMENT OF SUBSEQUENT SECURITIZATIONS. THESEERRORS WERE REFERENCED AS STATIC POOL INFORMATION IN FOURSUBPRIME SECURITIZATIONS AFTER THE FIRM HAD LEARNED OF THEERRORS. THE FIRM WAS INFORMED THAT ONE OF ITS MASTERSERVICERS HAD PROVIDED ERRONEOUS INFORMATION TO A TRUSTEE INCONNECTION WITH DELINQUENCY DATA FOR CERTAIN SUBPRIME RMBS.THE MASTER SERVICER DETERMINED THAT FOR THE PERIOD BETWEENJANUARY 2006 AND SEPTEMBER 2006, IT HAD PROVIDED INACCURATEDELINQUENCY DATA FOR APPROXIMATELY 21 SUBPRIME RMBS. THESESECURITIZATIONS WERE FIRST ISSUED ON THE FIRM'S HOME EQUITYASSET TRUST (HEAT) SHELF AND WERE REFERENCED ON THE FIRM'SREG AB WEBSITE. THE MASTER SERVICER ADVISED THE FIRM THAT ITHAD ALREADY IDENTIFIED AND CORRECTED THE CAUSE OF THOSEERRORS. THE MASTER SERVICER'S CORRECTION OF THE CAUSE OF THEERRORS DID NOT CORRECT THE ERRORS IN THE STATIC POOLINFORMATION POSTED ON THE REG AB WEBSITE. UPON LEARNING OFTHE ERRORS FROM THE MASTER SERVICER, THE FIRM DISCUSSED THEISSUE INTERNALLY, FOLLOWED UP WITH THE MASTER SERVICER, ANDRECEIVED DATA FROM THE MASTER SERVICER QUANTIFYING THEERRORS FOR THE PARTICULAR SECURITIZATIONS AND MONTHS. AFTERFURTHER ANALYSIS AND DISCUSSION WITH THE FIRM, THE MASTERSERVICER AND TRUSTEE INFORMED THE FIRM THAT THEY BELIEVED THATTHE ERRORS WERE IMMATERIAL AND THAT THEY DID NOT INTEND TOPROVIDE INVESTORS WITH AMENDED MONTHLY REPORTS. THEDEPOSITOR, A FIRM AFFILIATE, MADE FORM 10-K FILINGS WITH THESECURITIES AND EXCHANGE COMMISSION (SEC) DESCRIBING THEINACCURACIES AS A GENERAL PLATFORM ERROR AFFECTING THEMASTER SERVICER'S OPERATIONS. SOME OF THESE FORM 10-K FILINGSINCLUDED SERVICER ATTESTATIONS THAT DESCRIBED THE NATURE OFTHE ERROR AND LISTED SECURITIZATIONS THAT MIGHT HAVE BEENAFFECTED BUT THESE FILINGS DID NOT SET FORTH SPECIFICINACCURACIES IN THE DELINQUENCY DATA FOR ANY INDIVIDUALSECURITIZATION. AFTER THE FIRM LEARNED THAT INACCURATEDELINQUENCY CALCULATIONS HAD BEEN POSTED ON ITS REG ABWEBSITE FOR THE ABOVE PERIOD, THE FIRM FAILED TO INVESTIGATEWHETHER STATIC POOL INFORMATION POSTED ON THE WEBSITE FORTHE PERIOD FROM FEBRUARY 2001 THROUGH DECEMBER 2005 ALSOCONTAINED INACCURACIES. THE FIRM DID NOT SUFFICIENTLYINVESTIGATE THESE DELINQUENCY ERRORS, HAS NOT DIRECTLYINFORMED CLIENTS WHO INVESTED IN THESE SECURITIZATIONS OF THESPECIFIC REPORTING DISCREPANCIES AND HAS NOT REVISED ITS REGAB WEBSITE TO CORRECT THESE ERRORS. SPECIFICALLY, THEINACCURATE INFORMATION FOR THE SIX HEAT SECURITIZATIONS WASHYPERLINKED TO FOUR SUBSEQUENT RMBS SECURITIZATIONSINVOLVING A COMBINED TOTAL OF $3,764,275,250 IN NOTES ISSUED ANDRESULTED IN THESE FOUR SUBSEQUENT SECURITIZATIONS BEING SOLDWITH REFERENCE TO INACCURATE DATA. [CONTINUED IN COMMENT]







Initiated By: FINRA


Other




Other Product Type(s): SUBPRIME RESIDENTIAL MORTGAGE BACKED SECURITIES

NASD RULES 2110, 3010: REGULATION AB REQUIRED THE FIRM TOMAINTAIN A WEBSITE FOR EACH NEWLY-ISSUED SUBPRIME RESIDENTIALMORTGAGE BACKED SECURITIES ("RMBS" OR "SECURITIZATIONS") THATPRESENTED HISTORICAL DELINQUENCY DATA, ALSO KNOWN AS STATICPOOL INFORMATION, FOR PRIOR SIMILAR DEALS TO ILLUSTRATE THEPAST PERFORMANCE OF SECURITIZATIONS THAT CONTAINED SIMILARCOLLATERAL. REGULATION AB ALSO REQUIRED THAT EACH RMBSDISCLOSE THE METHOD EMPLOYED FOR CALCULATING DELINQUENCIES.THE FIRM FAILED TO PROVIDE ACCURATE DELINQUENCY RATES WITHREGARD TO 21 SUBPRIME SECURITIZATIONS THAT WERE REFERENCEDON ITS REGULATION AB WEBSITE (REG AB WEBSITE). FOR THESESECURITIZATIONS, THE REG AB WEBSITE DISPLAYED UP TO NINE MONTHSOF INACCURATE HISTORICAL DELINQUENCY DATA, FOR THE PERIOD OFJANUARY THROUGH SEPTEMBER 2006, VARIOUSLY UNDERREPORTINGAND OVERREPORTING DELINQUENCIES FOR DIFFERENTSECURITIZATIONS WITHIN THIS PERIOD. THE DELINQUENCY REPORTINGERRORS FOR SIX OF THESE SECURITIZATIONS MAY HAVE AFFECTED ANINVESTOR'S ASSESSMENT OF SUBSEQUENT SECURITIZATIONS. THESEERRORS WERE REFERENCED AS STATIC POOL INFORMATION IN FOURSUBPRIME SECURITIZATIONS AFTER THE FIRM HAD LEARNED OF THEERRORS. THE FIRM WAS INFORMED THAT ONE OF ITS MASTERSERVICERS HAD PROVIDED ERRONEOUS INFORMATION TO A TRUSTEE INCONNECTION WITH DELINQUENCY DATA FOR CERTAIN SUBPRIME RMBS.THE MASTER SERVICER DETERMINED THAT FOR THE PERIOD BETWEENJANUARY 2006 AND SEPTEMBER 2006, IT HAD PROVIDED INACCURATEDELINQUENCY DATA FOR APPROXIMATELY 21 SUBPRIME RMBS. THESESECURITIZATIONS WERE FIRST ISSUED ON THE FIRM'S HOME EQUITYASSET TRUST (HEAT) SHELF AND WERE REFERENCED ON THE FIRM'SREG AB WEBSITE. THE MASTER SERVICER ADVISED THE FIRM THAT ITHAD ALREADY IDENTIFIED AND CORRECTED THE CAUSE OF THOSEERRORS. THE MASTER SERVICER'S CORRECTION OF THE CAUSE OF THEERRORS DID NOT CORRECT THE ERRORS IN THE STATIC POOLINFORMATION POSTED ON THE REG AB WEBSITE. UPON LEARNING OFTHE ERRORS FROM THE MASTER SERVICER, THE FIRM DISCUSSED THEISSUE INTERNALLY, FOLLOWED UP WITH THE MASTER SERVICER, ANDRECEIVED DATA FROM THE MASTER SERVICER QUANTIFYING THEERRORS FOR THE PARTICULAR SECURITIZATIONS AND MONTHS. AFTERFURTHER ANALYSIS AND DISCUSSION WITH THE FIRM, THE MASTERSERVICER AND TRUSTEE INFORMED THE FIRM THAT THEY BELIEVED THATTHE ERRORS WERE IMMATERIAL AND THAT THEY DID NOT INTEND TOPROVIDE INVESTORS WITH AMENDED MONTHLY REPORTS. THEDEPOSITOR, A FIRM AFFILIATE, MADE FORM 10-K FILINGS WITH THESECURITIES AND EXCHANGE COMMISSION (SEC) DESCRIBING THEINACCURACIES AS A GENERAL PLATFORM ERROR AFFECTING THEMASTER SERVICER'S OPERATIONS. SOME OF THESE FORM 10-K FILINGSINCLUDED SERVICER ATTESTATIONS THAT DESCRIBED THE NATURE OFTHE ERROR AND LISTED SECURITIZATIONS THAT MIGHT HAVE BEENAFFECTED BUT THESE FILINGS DID NOT SET FORTH SPECIFICINACCURACIES IN THE DELINQUENCY DATA FOR ANY INDIVIDUALSECURITIZATION. AFTER THE FIRM LEARNED THAT INACCURATEDELINQUENCY CALCULATIONS HAD BEEN POSTED ON ITS REG ABWEBSITE FOR THE ABOVE PERIOD, THE FIRM FAILED TO INVESTIGATEWHETHER STATIC POOL INFORMATION POSTED ON THE WEBSITE FORTHE PERIOD FROM FEBRUARY 2001 THROUGH DECEMBER 2005 ALSOCONTAINED INACCURACIES. THE FIRM DID NOT SUFFICIENTLYINVESTIGATE THESE DELINQUENCY ERRORS, HAS NOT DIRECTLYINFORMED CLIENTS WHO INVESTED IN THESE SECURITIZATIONS OF THESPECIFIC REPORTING DISCREPANCIES AND HAS NOT REVISED ITS REGAB WEBSITE TO CORRECT THESE ERRORS. SPECIFICALLY, THEINACCURATE INFORMATION FOR THE SIX HEAT SECURITIZATIONS WASHYPERLINKED TO FOUR SUBSEQUENT RMBS SECURITIZATIONSINVOLVING A COMBINED TOTAL OF $3,764,275,250 IN NOTES ISSUED ANDRESULTED IN THESE FOUR SUBSEQUENT SECURITIZATIONS BEING SOLDWITH REFERENCE TO INACCURATE DATA. [CONTINUED IN COMMENT]








Other


N/A


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE IT IS CENSURED AND FINED $4,500,000.

Regulator Statement [CONTINUED FROM ALLEGATIONS]: BECAUSE OF THESE ERRORS, WHICHVARIOUSLY UNDERREPORTED AND OVERREPORTED THE EXTENT OFDELINQUENT LOANS IN THE REFERENCED SECURITIZATIONS, THE FAIRMARKET VALUE, THE YIELDS ON CERTIFICATES AND THE ANTICIPATEDHOLDING PERIODS OF EACH OF THE FOUR HEAT RMBS MAY HAVE BEENIMPROPERLY EVALUATED BY POTENTIAL INVESTORS.FURTHER, THE FIRM FAILED TO NAME OR DEFINE THE METHODOLOGY ITUSED TO CALCULATE THE MORTGAGE DELINQUENCY RATES FOR FIVESUBPRIME RMBS IT UNDERWROTE AND SOLD IN 2006, AS REQUIRED BYREGULATION AB. THE FIRM USED THE MORTGAGE BANKER ASSOCIATION(MBA) METHOD TO CALCULATE THE NUMBER OF DELINQUENT LOANSTHAT WERE DEPOSITED INTO THE TRUSTS FOR THE FIVE SUBPRIMERMBS AS OF THE CUT-OFF DATE FOR ESTABLISHING THE MORTGAGEPOOL. THE FIRM, HOWEVER, FAILED TO NAME OR DEFINE ITS USE OF THEMBA METHOD TO CALCULATE MORTGAGE DELINQUENCY RATES FORTHESE SECURITIZATIONS. THE VALUE OF THESE FIVE SECURITIZATIONSIS APPROXIMATELY $5,673,200,250. SINCE THE DELINQUENCY FIGURESREFERENCED IN THE FIVE PROSPECTUS SUPPLEMENTS WERECALCULATED USING THE MBA METHOD, THE FIRM REPORTED BETWEEN0.8% AND 1.5% MORE DELINQUENCIES THAN WOULD HAVE BEENREPORTED HAD THE OFFICE OF THRIFT SUPERVISION (OTS) METHODBEEN EMPLOYED. IN CONNECTION WITH THESE FIVE HEAT RMBS, THEFIRM FAILED TO PROVIDE INVESTORS WITH ADEQUATE GUIDANCEREGARDING THE METHOD OF DELINQUENCY CALCULATION. AS A RESULT,THE FAIR MARKET VALUE, THE YIELDS ON THE CERTIFICATES AND THEANTICIPATED HOLDING PERIOD OF EACH OF THE FIVE HEAT RMBS MAYHAVE BEEN IMPROPERLY EVALUATED BY POTENTIAL INVESTORS.THE FIRM FAILED TO ESTABLISH A REASONABLE SYSTEM TO SUPERVISETHE MAINTENANCE AND UPDATING OF ITS REG AB WEBSITE AND DID NOTACT REASONABLY TO ENSURE THAT ITS REG AB WEBSITE PRESENTEDACCURATE STATIC POOL INFORMATION. AS THE UNDERWRITER ANDSELLER OF SUBPRIME RMBS, THE FIRM FAILED TO: (1) PROVIDE ANADEQUATE SYSTEM FOR FOLLOW-UP AND REVIEW TO ENSURE THAT ITSREG AB WEBSITE PRESENTED ACCURATE STATIC POOL INFORMATION; (2)PROVIDE ACCURATE INFORMATION ON RMBS DELINQUENCY RATES ONTHE REG AB WEBSITE; AND (3) PURSUE ITS OWN REVIEW OF THEACCURACY OF POSTED INFORMATION FOR RMBS DEALS THAT THE FIRMSHOULD HAVE KNOWN WERE LIKELY TO CONTAIN ERRONEOUSCALCULATIONS. AS PART OF THE FIRM'S UNDERWRITING OBLIGATIONS, ITWAS REQUIRED TO INCLUDE STATIC POOL INFORMATION FOR NEWSUBPRIME SECURITIZATIONS IT WAS OFFERING. ALTHOUGH THE FIRMWAS AWARE THAT DELINQUENCY DATA WAS INACCURATE FOR CERTAINRMBS SECURITIZATIONS, THE FIRM CONTINUED TO REFERENCEDELINQUENCY DATA THAT HAD BEEN VARIOUSLY UNDERREPORTEDAND/OR OVERREPORTED AS PART OF STATIC POOL INFORMATION FORSUBSEQUENT SECURITIZATIONS UNDERWRITTEN AND SOLD BY THE FIRM.IN ADDITION, THE FIRM DID NOT REVIEW OTHER STATIC POOLINFORMATION THAT THE FIRM WAS AWARE WAS POTENTIALLYINACCURATE AND WAS POSTED ON THE REG AB WEBSITE. THE FIRMFAILED TO TAKE ADEQUATE STEPS TO REVIEW AND CORRECT THEINACCURATE STATIC POOL INFORMATION CONTAINED ON ITS REG ABWEBSITE AND INCORPORATED BY REFERENCE IN PROSPECTUSSUPPLEMENTS FOR FOUR SECURITIZATIONS.


No








[CONTINUED FROM ALLEGATIONS]: BECAUSE OF THESE ERRORS, WHICHVARIOUSLY UNDERREPORTED AND OVERREPORTED THE EXTENT OFDELINQUENT LOANS IN THE REFERENCED SECURITIZATIONS, THE FAIRMARKET VALUE, THE YIELDS ON CERTIFICATES AND THE ANTICIPATEDHOLDING PERIODS OF EACH OF THE FOUR HEAT RMBS MAY HAVE BEENIMPROPERLY EVALUATED BY POTENTIAL INVESTORS.FURTHER, THE FIRM FAILED TO NAME OR DEFINE THE METHODOLOGY ITUSED TO CALCULATE THE MORTGAGE DELINQUENCY RATES FOR FIVESUBPRIME RMBS IT UNDERWROTE AND SOLD IN 2006, AS REQUIRED BYREGULATION AB. THE FIRM USED THE MORTGAGE BANKER ASSOCIATION(MBA) METHOD TO CALCULATE THE NUMBER OF DELINQUENT LOANSTHAT WERE DEPOSITED INTO THE TRUSTS FOR THE FIVE SUBPRIMERMBS AS OF THE CUT-OFF DATE FOR ESTABLISHING THE MORTGAGEPOOL. THE FIRM, HOWEVER, FAILED TO NAME OR DEFINE ITS USE OF THEMBA METHOD TO CALCULATE MORTGAGE DELINQUENCY RATES FORTHESE SECURITIZATIONS. THE VALUE OF THESE FIVE SECURITIZATIONSIS APPROXIMATELY $5,673,200,250. SINCE THE DELINQUENCY FIGURESREFERENCED IN THE FIVE PROSPECTUS SUPPLEMENTS WERECALCULATED USING THE MBA METHOD, THE FIRM REPORTED BETWEEN0.8% AND 1.5% MORE DELINQUENCIES THAN WOULD HAVE BEENREPORTED HAD THE OFFICE OF THRIFT SUPERVISION (OTS) METHODBEEN EMPLOYED. IN CONNECTION WITH THESE FIVE HEAT RMBS, THEFIRM FAILED TO PROVIDE INVESTORS WITH ADEQUATE GUIDANCEREGARDING THE METHOD OF DELINQUENCY CALCULATION. AS A RESULT,THE FAIR MARKET VALUE, THE YIELDS ON THE CERTIFICATES AND THEANTICIPATED HOLDING PERIOD OF EACH OF THE FIVE HEAT RMBS MAYHAVE BEEN IMPROPERLY EVALUATED BY POTENTIAL INVESTORS.THE FIRM FAILED TO ESTABLISH A REASONABLE SYSTEM TO SUPERVISETHE MAINTENANCE AND UPDATING OF ITS REG AB WEBSITE AND DID NOTACT REASONABLY TO ENSURE THAT ITS REG AB WEBSITE PRESENTEDACCURATE STATIC POOL INFORMATION. AS THE UNDERWRITER ANDSELLER OF SUBPRIME RMBS, THE FIRM FAILED TO: (1) PROVIDE ANADEQUATE SYSTEM FOR FOLLOW-UP AND REVIEW TO ENSURE THAT ITSREG AB WEBSITE PRESENTED ACCURATE STATIC POOL INFORMATION; (2)PROVIDE ACCURATE INFORMATION ON RMBS DELINQUENCY RATES ONTHE REG AB WEBSITE; AND (3) PURSUE ITS OWN REVIEW OF THEACCURACY OF POSTED INFORMATION FOR RMBS DEALS THAT THE FIRMSHOULD HAVE KNOWN WERE LIKELY TO CONTAIN ERRONEOUSCALCULATIONS. AS PART OF THE FIRM'S UNDERWRITING OBLIGATIONS, ITWAS REQUIRED TO INCLUDE STATIC POOL INFORMATION FOR NEWSUBPRIME SECURITIZATIONS IT WAS OFFERING. ALTHOUGH THE FIRMWAS AWARE THAT DELINQUENCY DATA WAS INACCURATE FOR CERTAINRMBS SECURITIZATIONS, THE FIRM CONTINUED TO REFERENCEDELINQUENCY DATA THAT HAD BEEN VARIOUSLY UNDERREPORTEDAND/OR OVERREPORTED AS PART OF STATIC POOL INFORMATION FORSUBSEQUENT SECURITIZATIONS UNDERWRITTEN AND SOLD BY THE FIRM.IN ADDITION, THE FIRM DID NOT REVIEW OTHER STATIC POOLINFORMATION THAT THE FIRM WAS AWARE WAS POTENTIALLYINACCURATE AND WAS POSTED ON THE REG AB WEBSITE. THE FIRMFAILED TO TAKE ADEQUATE STEPS TO REVIEW AND CORRECT THEINACCURATE STATIC POOL INFORMATION CONTAINED ON ITS REG ABWEBSITE AND INCORPORATED BY REFERENCE IN PROSPECTUSSUPPLEMENTS FOR FOUR SECURITIZATIONS.


Allegations: NASD RULES 2110, 3010: REGULATION AB REQUIRED THE FIRM TOMAINTAIN A WEBSITE FOR EACH NEWLY-ISSUED SUBPRIME RESIDENTIALMORTGAGE BACKED SECURITIES ("RMBS" OR "SECURITIZATIONS") THATPRESENTED HISTORICAL DELINQUENCY DATA, ALSO KNOWN AS STATICPOOL INFORMATION, FOR PRIOR SIMILAR DEALS TO ILLUSTRATE THEPAST PERFORMANCE OF SECURITIZATIONS THAT CONTAINED SIMILARCOLLATERAL. REGULATION AB ALSO REQUIRED THAT EACH RMBSDISCLOSE THE METHOD EMPLOYED FOR CALCULATING DELINQUENCIES.THE FIRM FAILED TO PROVIDE ACCURATE DELINQUENCY RATES WITHREGARD TO 21 SUBPRIME SECURITIZATIONS THAT WERE REFERENCEDON ITS REGULATION AB WEBSITE (REG AB WEBSITE). FOR THESESECURITIZATIONS, THE REG AB WEBSITE DISPLAYED UP TO NINE MONTHSOF INACCURATE HISTORICAL DELINQUENCY DATA, FOR THE PERIOD OFJANUARY THROUGH SEPTEMBER 2006, VARIOUSLY UNDERREPORTINGAND OVERREPORTING DELINQUENCIES FOR DIFFERENTSECURITIZATIONS WITHIN THIS PERIOD. THE DELINQUENCY REPORTINGERRORS FOR SIX OF THESE SECURITIZATIONS MAY HAVE AFFECTED ANINVESTOR'S ASSESSMENT OF SUBSEQUENT SECURITIZATIONS. THESEERRORS WERE REFERENCED AS STATIC POOL INFORMATION IN FOURSUBPRIME SECURITIZATIONS AFTER THE FIRM HAD LEARNED OF THEERRORS. THE FIRM WAS INFORMED THAT ONE OF ITS MASTERSERVICERS HAD PROVIDED ERRONEOUS INFORMATION TO A TRUSTEE INCONNECTION WITH DELINQUENCY DATA FOR CERTAIN SUBPRIME RMBS.THE MASTER SERVICER DETERMINED THAT FOR THE PERIOD BETWEENJANUARY 2006 AND SEPTEMBER 2006, IT HAD PROVIDED INACCURATEDELINQUENCY DATA FOR APPROXIMATELY 21 SUBPRIME RMBS. THESESECURITIZATIONS WERE FIRST ISSUED ON THE FIRM'S HOME EQUITYASSET TRUST (HEAT) SHELF AND WERE REFERENCED ON THE FIRM'SREG AB WEBSITE. THE MASTER SERVICER ADVISED THE FIRM THAT ITHAD ALREADY IDENTIFIED AND CORRECTED THE CAUSE OF THOSEERRORS. THE MASTER SERVICER'S CORRECTION OF THE CAUSE OF THEERRORS DID NOT CORRECT THE ERRORS IN THE STATIC POOLINFORMATION POSTED ON THE REG AB WEBSITE. UPON LEARNING OFTHE ERRORS FROM THE MASTER SERVICER, THE FIRM DISCUSSED THEISSUE INTERNALLY, FOLLOWED UP WITH THE MASTER SERVICER, ANDRECEIVED DATA FROM THE MASTER SERVICER QUANTIFYING THEERRORS FOR THE PARTICULAR SECURITIZATIONS AND MONTHS. AFTERFURTHER ANALYSIS AND DISCUSSION WITH THE FIRM, THE MASTERSERVICER AND TRUSTEE INFORMED THE FIRM THAT THEY BELIEVED THATTHE ERRORS WERE IMMATERIAL AND THAT THEY DID NOT INTEND TOPROVIDE INVESTORS WITH AMENDED MONTHLY REPORTS. THEDEPOSITOR, A FIRM AFFILIATE, MADE FORM 10-K FILINGS WITH THESECURITIES AND EXCHANGE COMMISSION (SEC) DESCRIBING THEINACCURACIES AS A GENERAL PLATFORM ERROR AFFECTING THEMASTER SERVICER'S OPERATIONS. SOME OF THESE FORM 10-K FILINGSINCLUDED SERVICER ATTESTATIONS THAT DESCRIBED THE NATURE OFTHE ERROR AND LISTED SECURITIZATIONS THAT MIGHT HAVE BEENAFFECTED BUT THESE FILINGS DID NOT SET FORTH SPECIFICINACCURACIES IN THE DELINQUENCY DATA FOR ANY INDIVIDUALSECURITIZATION. AFTER THE FIRM LEARNED THAT INACCURATEDELINQUENCY CALCULATIONS HAD BEEN POSTED ON ITS REG ABWEBSITE FOR THE ABOVE PERIOD, THE FIRM FAILED TO INVESTIGATEWHETHER STATIC POOL INFORMATION POSTED ON THE WEBSITE FORTHE PERIOD FROM FEBRUARY 2001 THROUGH DECEMBER 2005 ALSOCONTAINED INACCURACIES. THE FIRM DID NOT SUFFICIENTLYINVESTIGATE THESE DELINQUENCY ERRORS, HAS NOT DIRECTLYINFORMED CLIENTS WHO INVESTED IN THESE SECURITIZATIONS OF THESPECIFIC REPORTING DISCREPANCIES AND HAS NOT REVISED ITS REGAB WEBSITE TO CORRECT THESE ERRORS. SPECIFICALLY, THEINACCURATE INFORMATION FOR THE SIX HEAT SECURITIZATIONS WASHYPERLINKED TO FOUR SUBSEQUENT RMBS SECURITIZATIONSINVOLVING A COMBINED TOTAL OF $3,764,275,250 IN NOTES ISSUED ANDRESULTED IN THESE FOUR SUBSEQUENT SECURITIZATIONS BEING SOLDWITH REFERENCE TO INACCURATE DATA. [CONTINUED IN COMMENT]













Initiated By: FINRA


Other


N/A




Other Product Type(s): SUBPRIME RESIDENTIAL MORTGAGE BACKED SECURITIES



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE IT IS CENSURED AND FINED $4,500,000.

Firm Statement [CONTINUED FROM ALLEGATIONS]: BECAUSE OF THESE ERRORS, WHICHVARIOUSLY UNDERREPORTED AND OVERREPORTED THE EXTENT OFDELINQUENT LOANS IN THE REFERENCED SECURITIZATIONS, THE FAIRMARKET VALUE, THE YIELDS ON CERTIFICATES AND THE ANTICIPATEDHOLDING PERIODS OF EACH OF THE FOUR HEAT RMBS MAY HAVE BEENIMPROPERLY EVALUATED BY POTENTIAL INVESTORS. FURTHER, THE FIRMFAILED TO NAME OR DEFINE THE METHODOLOGY IT USED TO CALCULATETHE MORTGAGE DELINQUENCY RATES FOR FIVE SUBPRIME RMBS ITUNDERWROTE AND SOLD IN 2006, AS REQUIRED BY REGULATION AB. THEFIRM USED THE MORTGAGE BANKER ASSOCIATION (MBA) METHOD TOCALCULATE THE NUMBER OF DELINQUENT LOANS THAT WEREDEPOSITED INTO THE TRUSTS FOR THE FIVE SUBPRIME RMBS AS OF THECUT-OFF DATE FOR ESTABLISHING THE MORTGAGE POOL. THE FIRM,HOWEVER, FAILED TO NAME OR DEFINE ITS USE OF THE MBA METHOD TOCALCULATE MORTGAGE DELINQUENCY RATES FOR THESESECURITIZATIONS. THE VALUE OF THESE FIVE SECURITIZATIONS ISAPPROXIMATELY $5,673,200,250. SINCE THE DELINQUENCY FIGURESREFERENCED IN THE FIVE PROSPECTUS SUPPLEMENTS WERECALCULATED USING THE MBA METHOD, THE FIRM REPORTED BETWEEN0.8% AND 1.5% MORE DELINQUENCIES THAN WOULD HAVE BEENREPORTED HAD THE OFFICE OF THRIFT SUPERVISION (OTS) METHODBEEN EMPLOYED. IN CONNECTION WITH THESE FIVE HEAT RMBS, THEFIRM FAILED TO PROVIDE INVESTORS WITH ADEQUATE GUIDANCEREGARDING THE METHOD OF DELINQUENCY CALCULATION. AS A RESULT,THE FAIR MARKET VALUE, THE YIELDS ON THE CERTIFICATES AND THEANTICIPATED HOLDING PERIOD OF EACH OF THE FIVE HEAT RMBS MAYHAVE BEEN IMPROPERLY EVALUATED BY POTENTIAL INVESTORS. THEFIRM FAILED TO ESTABLISH A REASONABLE SYSTEM TO SUPERVISE THEMAINTENANCE AND UPDATING OF ITS REG AB WEBSITE AND DID NOT ACTREASONABLY TO ENSURE THAT ITS REG AB WEBSITE PRESENTEDACCURATE STATIC POOL INFORMATION. AS THE UNDERWRITER ANDSELLER OF SUBPRIME RMBS, THE FIRM FAILED TO: (1) PROVIDE ANADEQUATE SYSTEM FOR FOLLOW-UP AND REVIEW TO ENSURE THAT ITSREG AB WEBSITE PRESENTED ACCURATE STATIC POOL INFORMATION; (2)PROVIDE ACCURATE INFORMATION ON RMBS DELINQUENCY RATES ONTHE REG AB WEBSITE; AND (3) PURSUE ITS OWN REVIEW OF THEACCURACY OF POSTED INFORMATION FOR RMBS DEALS THAT THE FIRMSHOULD HAVE KNOWN WERE LIKELY TO CONTAIN ERRONEOUSCALCULATIONS. AS PART OF THE FIRM'S UNDERWRITING OBLIGATIONS, ITWAS REQUIRED TO INCLUDE STATIC POOL INFORMATION FOR NEWSUBPRIME SECURITIZATIONS IT WAS OFFERING. ALTHOUGH THE FIRMWAS AWARE THAT DELINQUENCY DATA WAS INACCURATE FOR CERTAINRMBS SECURITIZATIONS, THE FIRM CONTINUED TO REFERENCEDELINQUENCY DATA THAT HAD BEEN VARIOUSLY UNDERREPORTEDAND/OR OVERREPORTED AS PART OF STATIC POOL INFORMATION FORSUBSEQUENT SECURITIZATIONS UNDERWRITTEN AND SOLD BY THE FIRM.IN ADDITION, THE FIRM DID NOT REVIEW OTHER STATIC POOLINFORMATION THAT THE FIRM WAS AWARE WAS POTENTIALLYINACCURATE AND WAS POSTED ON THE REG AB WEBSITE. THE FIRMFAILED TO TAKE ADEQUATE STEPS TO REVIEW AND CORRECT THEINACCURATE STATIC POOL INFORMATION CONTAINED ON ITS REG ABWEBSITE AND INCORPORATED BY REFERENCE IN PROSPECTUSSUPPLEMENTS FOR FOUR SECURITIZATIONS.









[CONTINUED FROM ALLEGATIONS]: BECAUSE OF THESE ERRORS, WHICHVARIOUSLY UNDERREPORTED AND OVERREPORTED THE EXTENT OFDELINQUENT LOANS IN THE REFERENCED SECURITIZATIONS, THE FAIRMARKET VALUE, THE YIELDS ON CERTIFICATES AND THE ANTICIPATEDHOLDING PERIODS OF EACH OF THE FOUR HEAT RMBS MAY HAVE BEENIMPROPERLY EVALUATED BY POTENTIAL INVESTORS. FURTHER, THE FIRMFAILED TO NAME OR DEFINE THE METHODOLOGY IT USED TO CALCULATETHE MORTGAGE DELINQUENCY RATES FOR FIVE SUBPRIME RMBS ITUNDERWROTE AND SOLD IN 2006, AS REQUIRED BY REGULATION AB. THEFIRM USED THE MORTGAGE BANKER ASSOCIATION (MBA) METHOD TOCALCULATE THE NUMBER OF DELINQUENT LOANS THAT WEREDEPOSITED INTO THE TRUSTS FOR THE FIVE SUBPRIME RMBS AS OF THECUT-OFF DATE FOR ESTABLISHING THE MORTGAGE POOL. THE FIRM,HOWEVER, FAILED TO NAME OR DEFINE ITS USE OF THE MBA METHOD TOCALCULATE MORTGAGE DELINQUENCY RATES FOR THESESECURITIZATIONS. THE VALUE OF THESE FIVE SECURITIZATIONS ISAPPROXIMATELY $5,673,200,250. SINCE THE DELINQUENCY FIGURESREFERENCED IN THE FIVE PROSPECTUS SUPPLEMENTS WERECALCULATED USING THE MBA METHOD, THE FIRM REPORTED BETWEEN0.8% AND 1.5% MORE DELINQUENCIES THAN WOULD HAVE BEENREPORTED HAD THE OFFICE OF THRIFT SUPERVISION (OTS) METHODBEEN EMPLOYED. IN CONNECTION WITH THESE FIVE HEAT RMBS, THEFIRM FAILED TO PROVIDE INVESTORS WITH ADEQUATE GUIDANCEREGARDING THE METHOD OF DELINQUENCY CALCULATION. AS A RESULT,THE FAIR MARKET VALUE, THE YIELDS ON THE CERTIFICATES AND THEANTICIPATED HOLDING PERIOD OF EACH OF THE FIVE HEAT RMBS MAYHAVE BEEN IMPROPERLY EVALUATED BY POTENTIAL INVESTORS. THEFIRM FAILED TO ESTABLISH A REASONABLE SYSTEM TO SUPERVISE THEMAINTENANCE AND UPDATING OF ITS REG AB WEBSITE AND DID NOT ACTREASONABLY TO ENSURE THAT ITS REG AB WEBSITE PRESENTEDACCURATE STATIC POOL INFORMATION. AS THE UNDERWRITER ANDSELLER OF SUBPRIME RMBS, THE FIRM FAILED TO: (1) PROVIDE ANADEQUATE SYSTEM FOR FOLLOW-UP AND REVIEW TO ENSURE THAT ITSREG AB WEBSITE PRESENTED ACCURATE STATIC POOL INFORMATION; (2)PROVIDE ACCURATE INFORMATION ON RMBS DELINQUENCY RATES ONTHE REG AB WEBSITE; AND (3) PURSUE ITS OWN REVIEW OF THEACCURACY OF POSTED INFORMATION FOR RMBS DEALS THAT THE FIRMSHOULD HAVE KNOWN WERE LIKELY TO CONTAIN ERRONEOUSCALCULATIONS. AS PART OF THE FIRM'S UNDERWRITING OBLIGATIONS, ITWAS REQUIRED TO INCLUDE STATIC POOL INFORMATION FOR NEWSUBPRIME SECURITIZATIONS IT WAS OFFERING. ALTHOUGH THE FIRMWAS AWARE THAT DELINQUENCY DATA WAS INACCURATE FOR CERTAINRMBS SECURITIZATIONS, THE FIRM CONTINUED TO REFERENCEDELINQUENCY DATA THAT HAD BEEN VARIOUSLY UNDERREPORTEDAND/OR OVERREPORTED AS PART OF STATIC POOL INFORMATION FORSUBSEQUENT SECURITIZATIONS UNDERWRITTEN AND SOLD BY THE FIRM.IN ADDITION, THE FIRM DID NOT REVIEW OTHER STATIC POOLINFORMATION THAT THE FIRM WAS AWARE WAS POTENTIALLYINACCURATE AND WAS POSTED ON THE REG AB WEBSITE. THE FIRMFAILED TO TAKE ADEQUATE STEPS TO REVIEW AND CORRECT THEINACCURATE STATIC POOL INFORMATION CONTAINED ON ITS REG ABWEBSITE AND INCORPORATED BY REFERENCE IN PROSPECTUSSUPPLEMENTS FOR FOUR SECURITIZATIONS.


i







Initiated By: WASHINGTON


Cease and Desist



Docket/Case Number: S-09-379-09-CO01




Allegations: ON AUGUST 30, 2010, THE SECURITIES DIVISION ENTERED INTO ACONSENT ORDER WITH CREDIT SUISSE SECURITIES (USA) LLC("RESPONDENT"), IN ORDER TO SETTLE THE ALLEGATIONS THAT THERESPONDENT ENGAGED IN DISHONEST AND UNETHICAL PRACTICES INTHE SALE OF AUCTION RATE SECURITIES ("ARS"), AND FAILED TOREASONABLY SUPERVISE ITS SALESPERSONS IN THE MARKETING ANDSALE OF ARS. THE RESPONDENT NEITHER ADMITTED NOR DENIED THEALLEGATIONS, BUT AGREED TO CEASE AND DESIST FROM VIOLATING THESECURITIES ACT OF WASHINGTON. THE RESPONDENT AGREED TOOFFER TO PURCHASE AT PAR ARS THAT SINCE FEBRUARY 14, 2008 HAVENOT BEEN AUCTIONING FROM INDIVIDUAL INVESTORS WHO PURCHASEDTHOSE ARS FROM THE RESPONDENT PRIOR TO FEBRUARY 14, 2008. THERESPONDENT AGREED TO PAY $80,707.01 AS A CIVIL MONETARY PENALTY.THE RESPONDENT WAIVED ITS RIGHT TO A HEARING AND TO JUDICIALREVIEW OF THIS MATTER.



Resolution:


Sanction Details: CIVIL MONETARY PENALTY OF $80,707.01 PAID 9-9-2010

Regulator Statement BRIDGETT FISHER 360-902-8783


Yes


Consent






Regulator Statement BRIDGETT FISHER 360-902-8783


Initiated By: STATE OF WASHINGTON DEPARTMENT OF FINANCIAL INSTITUTIONS -SECURITIES DIVISION


Cease and Desist



Docket/Case Number: ORDER NO. S-09-379-09-CO01



Allegations: IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASAA, THE STATE OF WASHINGTON ALLEGED THATTHE FIRM'S AGENTS INACCURATELY DESCRIBED ARS IN VIOLATION OFREVISED CODE OF WASHINGTON ("RCW") 21.20.110(1)(G) AND THE FIRMFAILED TO SUPERVISE THE SALE OF ARS IN VIOLATION OF RCW 21.20.110(1)(J).



Resolution:


Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THEORDER, AND CONSENTS TO THE ENTRY OF THE ORDER BY THE STATE OFWASHINGTON DEPARTMENT OF FINANCIAL INSTITUTIONS - SECURITIESDIVISION. CIVIL MONETARY PENALTY OF $80,707.01 PAID 9-9-2010.

Firm Statement THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE STATE OF WASHINGTON DEPARTMENT OF FINANCIALINSTITUTIONS - SECURITIES DIVISION ("DIVISION") ALLEGED THAT THEFIRM'S CONDUCT IN CONNECTION WITH THE MARKETING AND SALE OFARS TO RETAIL AND OTHER CUSTOMERS VIOLATED RCW 21.20.110(1)(G)AND 21.20.110(1)(J). WITHOUT ADMITTING OR DENYING THE ALLEGATIONS,THE FIRM AGREED TO CEASE AND DESIST FROM VIOLATING THESECURITIES ACT OF WASHINGTON, AND TO CERTAIN UNDERTAKINGS,INCLUDING OFFERING TO BUY BACK ELIGIBLE ARS FROM CERTAININDIVIDUAL INVESTORS. THE FIRM ALSO AGREED TO PAY THE DIVISION ACIVIL PENALTY OF $80,707.01, THIS STATE'S ALLOCATED PORTION OF THEAMOUNT AGREED TO WITH NASAA. FINALLY, THE DIVISION AND THE FIRMAGREED THAT THE CONSENT ORDER WOULD NOT SUBJECT THE FIRM TOANY DISQUALIFICATIONS UNDER THE FEDERAL SECURITIES LAWS, WHICHWAS ALSO PART OF THE AGREEMENT WITH NASAA.


Settled






THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE STATE OF WASHINGTON DEPARTMENT OF FINANCIALINSTITUTIONS - SECURITIES DIVISION ("DIVISION") ALLEGED THAT THEFIRM'S CONDUCT IN CONNECTION WITH THE MARKETING AND SALE OFARS TO RETAIL AND OTHER CUSTOMERS VIOLATED RCW 21.20.110(1)(G)AND 21.20.110(1)(J). WITHOUT ADMITTING OR DENYING THE ALLEGATIONS,THE FIRM AGREED TO CEASE AND DESIST FROM VIOLATING THESECURITIES ACT OF WASHINGTON, AND TO CERTAIN UNDERTAKINGS,INCLUDING OFFERING TO BUY BACK ELIGIBLE ARS FROM CERTAININDIVIDUAL INVESTORS. THE FIRM ALSO AGREED TO PAY THE DIVISION ACIVIL PENALTY OF $80,707.01, THIS STATE'S ALLOCATED PORTION OF THEAMOUNT AGREED TO WITH NASAA. FINALLY, THE DIVISION AND THE FIRMAGREED THAT THE CONSENT ORDER WOULD NOT SUBJECT THE FIRM TOANY DISQUALIFICATIONS UNDER THE FEDERAL SECURITIES LAWS, WHICHWAS ALSO PART OF THE AGREEMENT WITH NASAA.


i


Allegations: SEC RULE 10B-10, FINRA RULE 6622, NASD RULES 6620, 6955(A) - CREDITSUISSE SECURITIES (USA)LLC TRANSMITTED NUMEROUS REPORTS TOTHE ORDER AUDIT TRAIL SYSTEM (OATS) THAT CONTAINED INACCURATE,INCOMPLETE OR IMPROPERLY FORMATTED DATA: THE FIRM SUBMITTEDEXECUTION OR COMBINED ORDER/EXECUTION REPORTS WITH AREPORTING EXCEPTION CODE (REC) OF "P," REPRESENTING ATRANSACTION BETWEEN TWO PROPRIETARY ACCOUNTS BUT WITH ACAPACITY CODE OTHER THAN "P," REPRESENTING A PRINCIPAL CAPACITY;SUBMITTED EXECUTION OR COMBINED ORDER/EXECUTION REPORTSFOR ORDERS THAT HAD BEEN ROUTED TO A NATIONAL SECURITIESEXCHANGE FOR EXECUTION; IMPROPERLY SUBMITTED EXECUTION ORCOMBINED ORDER/EXECUTION REPORTS WITH A REC OR A REC OF "P"WHEN THEY WERE REQUIRED TO BE MATCHED TO A RELATED TRADEREPORT IN A FINRA TRANSACTION REPORTING SYSTEM; SUBMITTEDEXECUTION OR COMBINED ORDER/EXECUTION REPORTS FORPROPRIETARY ORDERS THAT HAD BEEN ROUTED AWAY FROM THE FIRMFOR EXECUTION; IMPROPERLY SUBMITTED EXECUTION OR COMBINEDORDER/EXECUTION REPORTS WITH A REC OF "P" FOR EXECUTIONS THATDID NOT REPRESENT A TRADE BETWEEN TWO FIRM ACCOUNTS;SUBMITTED EXECUTION OR COMBINED ORDER/EXECUTION REPORTSWITH A REC OF "A," REPRESENTING AN AGENCY AVERAGE PRICETRANSACTION BUT WITH A CAPACITY CODE OTHER THAN "A,"REPRESENTING AN AGENCY CAPACITY; SUBMITTED EXECUTION ORCOMBINED ORDER/EXECUTION REPORTS FOR ORDERS THAT HAD BEENROUTED AWAY FROM THE FIRM FOR EXECUTION AND/OR REPORTED THEINACCURATE PRICE AND EXECUTION TIME FOR AGENCY AVERAGE PRICEEXECUTIONS; AND IMPROPERLY SUBMITTED EXECUTION OR COMBINEDORDER/EXECUTION REPORTS WITH A REC OF "A" FOR EXECUTIONS THATDID NOT REPRESENT AN AGENCY AVERAGE PRICE TRANSACTION. THEFIRM FAILED TO PROVIDE ACCURATE WRITTEN NOTIFICATIONDISCLOSING TO ITS CUSTOMER THE CORRECT COMPENSATION TYPEAND/OR THE CORRECT CAPACITY IN TRANSACTIONS. THE FIRMERRONEOUSLY DOUBLE REPORTED LAST SALE REPORTS TO THE OTCREPORTING FACILITY.







Initiated By: FINRA







SEC RULE 10B-10, FINRA RULE 6622, NASD RULES 6620, 6955(A) - CREDITSUISSE SECURITIES (USA)LLC TRANSMITTED NUMEROUS REPORTS TOTHE ORDER AUDIT TRAIL SYSTEM (OATS) THAT CONTAINED INACCURATE,INCOMPLETE OR IMPROPERLY FORMATTED DATA: THE FIRM SUBMITTEDEXECUTION OR COMBINED ORDER/EXECUTION REPORTS WITH AREPORTING EXCEPTION CODE (REC) OF "P," REPRESENTING ATRANSACTION BETWEEN TWO PROPRIETARY ACCOUNTS BUT WITH ACAPACITY CODE OTHER THAN "P," REPRESENTING A PRINCIPAL CAPACITY;SUBMITTED EXECUTION OR COMBINED ORDER/EXECUTION REPORTSFOR ORDERS THAT HAD BEEN ROUTED TO A NATIONAL SECURITIESEXCHANGE FOR EXECUTION; IMPROPERLY SUBMITTED EXECUTION ORCOMBINED ORDER/EXECUTION REPORTS WITH A REC OR A REC OF "P"WHEN THEY WERE REQUIRED TO BE MATCHED TO A RELATED TRADEREPORT IN A FINRA TRANSACTION REPORTING SYSTEM; SUBMITTEDEXECUTION OR COMBINED ORDER/EXECUTION REPORTS FORPROPRIETARY ORDERS THAT HAD BEEN ROUTED AWAY FROM THE FIRMFOR EXECUTION; IMPROPERLY SUBMITTED EXECUTION OR COMBINEDORDER/EXECUTION REPORTS WITH A REC OF "P" FOR EXECUTIONS THATDID NOT REPRESENT A TRADE BETWEEN TWO FIRM ACCOUNTS;SUBMITTED EXECUTION OR COMBINED ORDER/EXECUTION REPORTSWITH A REC OF "A," REPRESENTING AN AGENCY AVERAGE PRICETRANSACTION BUT WITH A CAPACITY CODE OTHER THAN "A,"REPRESENTING AN AGENCY CAPACITY; SUBMITTED EXECUTION ORCOMBINED ORDER/EXECUTION REPORTS FOR ORDERS THAT HAD BEENROUTED AWAY FROM THE FIRM FOR EXECUTION AND/OR REPORTED THEINACCURATE PRICE AND EXECUTION TIME FOR AGENCY AVERAGE PRICEEXECUTIONS; AND IMPROPERLY SUBMITTED EXECUTION OR COMBINEDORDER/EXECUTION REPORTS WITH A REC OF "A" FOR EXECUTIONS THATDID NOT REPRESENT AN AGENCY AVERAGE PRICE TRANSACTION. THEFIRM FAILED TO PROVIDE ACCURATE WRITTEN NOTIFICATIONDISCLOSING TO ITS CUSTOMER THE CORRECT COMPENSATION TYPEAND/OR THE CORRECT CAPACITY IN TRANSACTIONS. THE FIRMERRONEOUSLY DOUBLE REPORTED LAST SALE REPORTS TO THE OTCREPORTING FACILITY.


Resolution:




No












Initiated By: FINRA
















Resolution:






i


Initiated By: NASDAQ OMX BX, INC.


Other


N/A


Docket/Case Number: 20090176295/20090176294



Allegations: BOX TRADING RULES CHAPTER III, SECTION 2, CHAPTER VI, SECTION 6(D):RESPONDENT FAILED TO ENTER CONTINUOUS QUOTATIONS IN AT LEAST60% OF THE OPTIONS CLASSES TO WHICH IT HAD BEEN APPOINTED, INTHAT RESPONDENT FAILED TO QUOTE 63 OPTIONS CLASSES AT ALL ON ATLEAST ONE TRADING DATE, WITH 43 OF THOSE OPTIONS CLASSES NEVERQUOTED BY THE RESPONDENT AT ALL. RESPONDENT FAILED TOADEQUATELY PARTICIPATE IN THE EXCHANGE'S PRE-OPENING PHASE, INTHAT IT QUOTED LESS THAN 80% OF THE SERIES IN GREATER THAN 10%OR MORE OF THEIR ASSIGNED PRODUCTS ON A TOTAL OF 117 TRADINGDAYS. IN ADDITION, RESPONDENT FAILED TO MAINTAIN SATISFACTORYWRITTEN PROCEDURES TO ENSURE COMPLIANCE WITH EXCHANGERULES RELATING TO THE QUOTING OBLIGATIONS OF AN EXCHANGEMARKET MAKER.








Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTION AND TO THE ENTRY OF FINDINGS;THEREFORE IT IS FINED $30,000.


No




Initiated By: NASDAQ OMX BX, INC


Other


N/A


Docket/Case Number: 20090176295/20090176294



Allegations: BOX TRADING RULES CHAPTER III, SECTION 2, CHAPTER VI, SECTION 6(D):RESPONDENT FAILED TO ENTER CONTINUOUS QUOTATIONS IN AT LEAST60% OF THE OPTIONS CLASSES TO WHICH IT HAD BEEN APPOINTED, INTHAT RESPONDENT FAILED TO QUOTE 63 OPTIONS CLASSES AT ALL ON ATLEAST ONE TRADING DATE, WITH 43 OF THOSE OPTIONS CLASSES NEVERQUOTED BY THE RESPONDENT AT ALL. RESPONDENT FAILED TOADEQUATELY PARTICIPATE IN THE EXCHANGE'S PRE-OPENING PHASE, INTHAT IT QUOTED LESS THAN 80% OF THE SERIES IN GREATER THAN 10%OR MORE OF THEIR ASSIGNED PRODUCTS ON A TOTAL OF 117 TRADINGDAYS. IN ADDITION, RESPONDENT FAILED TO MAINTAIN SATISFACTORYWRITTEN PROCEDURES TO ENSURE COMPLIANCE WITH EXCHANGERULES RELATING TO THE QUOTING OBLIGATIONS OF AN EXCHANGEMARKET MAKER.








N/A


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTION AND TO THE ENTRY OF FINDINGS;THEREFORE IT IS FINED $30,000.




i


Initiated By: STATE OF ALASKA DEPARTMENT OF COMMERCE, COMMUNITY, ANDECONOMIC DEVELOPMENT - DIVISION OF BANKING AND SECURITIES


Cease and Desist



Docket/Case Number: ORDER NO.: 10-09-S



Allegations: IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASAA, THE STATE OF ALASKA ALLEGED THAT THEFIRM'S AGENTS INACCURATELY DESCRIBED ARS IN VIOLATION OF THEALASKA SECURITIES ACT, ALASKA STATUES ("AS") 45.55.025 AND THE FIRMFAILED TO SUPERVISE THE SALE OF ARS IN VIOLATION OF AS 45.55.060(B)(1).



Resolution:


Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THEORDER, AND CONSENTS TO THE ENTRY OF THE ORDER BY THE STATE OFALASKA DEPARTMENT OF COMMERCE, COMMUNITY, AND ECONOMICDEVELOPMENT - DIVISION OF BANKING AND SECURITIES.


Consent






Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THEORDER, AND CONSENTS TO THE ENTRY OF THE ORDER BY THE STATE OFALASKA DEPARTMENT OF COMMERCE, COMMUNITY, AND ECONOMICDEVELOPMENT - DIVISION OF BANKING AND SECURITIES.

Firm Statement THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE STATE OF ALASKA DEPARTMENT OF COMMERCE,COMMUNITY, AND ECONOMIC DEVELOPMENT - DIVISION OF BANKING ANDSECURITIES ("DIVISION") ALLEGED THAT THE FIRM'S CONDUCT INCONNECTION WITH THE MARKETING AND SALE OF ARS TO RETAIL ANDOTHER CUSTOMERS VIOLATED AS 45.55.060(B)(1) AND 45.55.025. WITHOUTADMITTING OR DENYING THE ALLEGATIONS, THE FIRM AGREED TO CEASEAND DESIST FROM VIOLATING THE ALASKA SECURITIES ACT AND TOCERTAIN UNDERTAKINGS, INCLUDING OFFERING TO BUY BACK ELIGIBLEARS FROM CERTAIN INDIVIDUAL INVESTORS. THE FIRM ALSO AGREED TOPAY THE DIVISION A CIVIL PENALTY OF $30,372.98, THIS STATE'SALLOCATED PORTION OF THE AMOUNT AGREED TO WITH NASAA. FINALLY,THE DIVISION AND THE FIRM AGREED THAT THE CONSENT ORDER WOULDNOT SUBJECT THE FIRM TO ANY DISQUALIFICATIONS UNDER THEFEDERAL SECURITIES LAWS, WHICH WAS ALSO PART OF THE AGREEMENTWITH NASAA.


i


Initiated By: US VIRGIN ISLANDS DIVISION OF BANKING AND INSURANCE


Docket/Case Number: ORDER NO. 09-10



Allegations: THIS SETTLEMENT IS IN CONNECTION WITH COORDINATEDINVESTIGATIONS BY A MULTI-STATE TASK FORCE WITH NASAAREGARDING CREDIT SUISSE SECURITIES (USA) LLC'S SALES OF AUCTIONRATE SECURITIES.












Resolution:


Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THEORDER, AND CONSENTS TO THE ENTRY OF THE ORDER BY THE UNITEDSTATES VIRGIN ISLANDS DIVISION OF BANKING AND INSURANCE.

Firm Statement THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES AND TERRITORIES MAY ENTERCONSENT ORDERS, IN WHICH THE FIRM NEITHER ADMITS NOR DENIESTHE ALLEGATIONS. IN THIS INSTANCE, THE UNITED STATES VIRGINISLANDS DIVISION OF BANKING AND INSURANCE ("DIVISION") REACHEDAN AGREEMENT WITH THE FIRM IN WHICH THE FIRM, WITHOUT ADMITTINGOR DENYING THE ALLEGATIONS, AGREED TO PAY THE DIVISION A CIVILPENALTY OF $30,000.00, THIS TERRITORY'S ALLOCATED PORTION OF THEAMOUNT AGREED TO WITH NASAA. THE DIVISION AND THE FIRM ALSOAGREED THAT THE CONSENT ORDER WOULD NOT SUBJECT THE FIRM TOANY DISQUALIFICATIONS UNDER THE FEDERAL SECURITIES LAWS, WHICHWAS ALSO PART OF THE AGREEMENT WITH NASAA.


Settled


i


Allegations: **07/29/2010**STIPULATION OF FACTS AND CONSENT TO PENALTY FILEDBY FINRA'S MARKET REGULATION DEPARTMENT - LEGAL SECTION, ONBEHALF OF NYSE REGULATION INC. AND PENDING.FOR THE SOLE PURPOSE OF SETTLING THIS DISCIPLINARY PROCEEDING,WITHOUT ADJUDICATION OF ANY ISSUES OF LAW OR FACT, AND WITHOUTADMITTING OR DENYING ANY ALLEGATIONS OR FINDINGS, CREDIT SUISSESECURITIES (USA) LLC STIPULATED THAT IT (1) VIOLATED NYSE RULE476(A)(8) BY ENTERING A TOTAL OF 9.35 MILLION SHARES OF NINEEXCHANGE-LISTED COMMON STOCKS AS MARKET-ON-CLOSE SELL ANDBUY ORDERS, THE EXECUTION OF WHICH RESULTED IN NO CHANGE OFBENEFICIAL OWNERSHIP AND (2) VIOLATED NYSE RULE 342(A) AND (B) BYFAILING TO REASONABLY SUPERVISE AND IMPLEMENT ADEQUATECONTROLS, INCLUDING A REASONABLE SYSTEM OF FOLLOW-UP ANDREVIEW, DESIGNED TO ACHIEVE COMPLIANCE WITH NYSE RULESPERTAINING TO WASH TRADES.CENSURE AND FINE IN THE AMOUNT OF $100,000.














**07/29/2010**STIPULATION OF FACTS AND CONSENT TO PENALTY FILEDBY FINRA'S MARKET REGULATION DEPARTMENT - LEGAL SECTION, ONBEHALF OF NYSE REGULATION INC. AND PENDING.FOR THE SOLE PURPOSE OF SETTLING THIS DISCIPLINARY PROCEEDING,WITHOUT ADJUDICATION OF ANY ISSUES OF LAW OR FACT, AND WITHOUTADMITTING OR DENYING ANY ALLEGATIONS OR FINDINGS, CREDIT SUISSESECURITIES (USA) LLC STIPULATED THAT IT (1) VIOLATED NYSE RULE476(A)(8) BY ENTERING A TOTAL OF 9.35 MILLION SHARES OF NINEEXCHANGE-LISTED COMMON STOCKS AS MARKET-ON-CLOSE SELL ANDBUY ORDERS, THE EXECUTION OF WHICH RESULTED IN NO CHANGE OFBENEFICIAL OWNERSHIP AND (2) VIOLATED NYSE RULE 342(A) AND (B) BYFAILING TO REASONABLY SUPERVISE AND IMPLEMENT ADEQUATECONTROLS, INCLUDING A REASONABLE SYSTEM OF FOLLOW-UP ANDREVIEW, DESIGNED TO ACHIEVE COMPLIANCE WITH NYSE RULESPERTAINING TO WASH TRADES.CENSURE AND FINE IN THE AMOUNT OF $100,000.


Resolution:


Sanction Details: **9/22/10** DECISION NO. 10-NYSE-19 ISSUED FOR THE NYSE HEARINGBOARD NAME OF SRO: NYSE DECISION: CSSU (I) VIOLATED NYSE RULE476(A)(8) ON APRIL 15, 2008 BY ENTERING A TOTAL OF 9.35 MILLIONSHARES OF NINE EXCHANGE-LISTED COMMON STOCKS AS MARKET-ON-CLOSE SELL AND BUY ORDERS, THE EXECUTION OF WHICH RESULTED INNO CHANGE OF BENEFICIAL OWNERSHIP AND (II) VIOLATED NYSE RULES342(A) AND (B) BY FAILING TO REASONABLY SUPERVISE AND IMPLEMENTADEQUATE CONTROLS, INCLUDING A REASONABLE SYSTEM OF FOLLOW-UP AND REVIEW, DESIGNED TO ACHIEVE COMPLIANCE WITH NYSE RULESAND POLICIES PERTAINING TO WASH TRADES. CONSENTED TO ACENSURE AND $100,000 FINE.


No


Decision






**9/22/10** DECISION NO. 10-NYSE-19 ISSUED FOR THE NYSE HEARINGBOARD NAME OF SRO: NYSE DECISION: CSSU (I) VIOLATED NYSE RULE476(A)(8) ON APRIL 15, 2008 BY ENTERING A TOTAL OF 9.35 MILLIONSHARES OF NINE EXCHANGE-LISTED COMMON STOCKS AS MARKET-ON-CLOSE SELL AND BUY ORDERS, THE EXECUTION OF WHICH RESULTED INNO CHANGE OF BENEFICIAL OWNERSHIP AND (II) VIOLATED NYSE RULES342(A) AND (B) BY FAILING TO REASONABLY SUPERVISE AND IMPLEMENTADEQUATE CONTROLS, INCLUDING A REASONABLE SYSTEM OF FOLLOW-UP AND REVIEW, DESIGNED TO ACHIEVE COMPLIANCE WITH NYSE RULESAND POLICIES PERTAINING TO WASH TRADES. CONSENTED TO ACENSURE AND $100,000 FINE.

Regulator Statement **10/22/2010**THE DECISION BECAME FINAL AS OF THE CLOSE OFBUSINESS ON OCTOBER 18, 2010 AND THE FINE BECAME PAYABLE ONTHAT SAME DATE.




Censure


MONETARY FINE





Allegations: **07/29/2010**STIPULATION OF FACTS AND CONSENT TO PENALTY FILEDBY FINRA'S MARKET REGULATION DEPARTMENT - LEGAL SECTION, ONBEHALF OF NYSE REGULATION INC. AND PENDING. FOR THE SOLEPURPOSE OF SETTLING THIS DISCIPLINARY PROCEEDING, WITHOUTADJUDICATION OF ANY ISSUES OF LAW OR FACT, AND WITHOUTADMITTING OR DENYING ANY ALLEGATIONS OR FINDINGS, CREDIT SUISSESECURITIES (USA) LLC STIPULATED THAT IT (1) VIOLATED NYSE RULE476(A)(8) BY ENTERING A TOTAL OF 9.35 MILLION SHARES OF NINEEXCHANGE-LISTED COMMON STOCKS AS MARKET-ON-CLOSE SELL ANDBUY ORDERS, THE EXECUTION OF WHICH RESULTED IN NO CHANGE OFBENEFICIAL OWNERSHIP AND (2) VIOLATED NYSE RULE 342(A) AND (B) BYFAILING TO REASONABLY SUPERVISE AND IMPLEMENT ADEQUATECONTROLS, INCLUDING A REASONABLE SYSTEM OF FOLLOW-UP ANDREVIEW, DESIGNED TO ACHIEVE COMPLIANCE WITH NYSE RULESPERTAINING TO WASH TRADES. CENSURE AND FINE IN THE AMOUNT OF$100,000.



Resolution:


Decision







Sanction Details: **9/22/10** DECISION NO. 10-NYSE-19 ISSUED FOR THE NYSE HEARINGBOARD NAME OF SRO: NYSE DECISION: CSSU (I) VIOLATED NYSE RULE476(A)(8) ON APRIL 15, 2008 BY ENTERING A TOTAL OF 9.35 MILLIONSHARES OF NINE EXCHANGE-LISTED COMMON STOCKS AS MARKET-ON-CLOSE SELL AND BUY ORDERS, THE EXECUTION OF WHICH RESULTED INNO CHANGE OF BENEFICIAL OWNERSHIP AND (II) VIOLATED NYSE RULES342(A) AND (B) BY FAILING TO REASONABLY SUPERVISE AND IMPLEMENTADEQUATE CONTROLS, INCLUDING A REASONABLE SYSTEM OF FOLLOW-UP AND REVIEW, DESIGNED TO ACHIEVE COMPLIANCE WITH NYSE RULESAND POLICIES PERTAINING TO WASH TRADES. CONSENTED TO ACENSURE AND $100,000 FINE.

Firm Statement **10/22/10** THE DECISION BECAME FINAL AS OF THE CLOSE OF BUSINESSON OCTOBER 18, 2010 AND THE FINE BECAME FINAL ON THAT SAME DATE.



i


Initiated By: CONNECTICUT




Docket/Case Number: CO-10-7801-S




Allegations: ON JULY 21, 2010, THE BANKING COMMISSIONER ENTERED A CONSENTORDER WITH RESPECT TO CREDIT SUISSE SECURITIES (USA) LLC. THECONSENT ORDER FOLLOWED AN INVESTIGATION BY A MULTISTATE TASKFORCE INTO THE MARKETING AND SALE OF AUCTION RATE SECURITIES(ARS) BY THE FIRM. THE CONSENT ORDER ALLEGED THAT, INCONJUNCTION WITH THE MARKETING OF ARS, THE FIRM 1) FAILED TOREASONABLY SUPERVISE CERTAIN OF ITS REGISTERED AGENTS IN THEIRCOMMUNICATION OF MATERIAL INFORMATION CONCERNING ARS, AND 2)ENGAGED IN DISHONEST OR UNETHICAL PRACTICES, THROUGH THEACTIVITIES OF CERTAIN REGISTERED AGENTS, BY FAILING TOADEQUATELY STATE COMPLETE FACTS CONCERNING ARS.











Resolution:

Other Sanctions Ordered: THE CONSENT ORDER FINED THE FIRM $196,070.59, AND DIRECTED IT TOCEASE AND DESIST FROM REGULATORY VIOLATIONS.

Sanction Details: SEE RESPONSE TO ITEM 13.B.


Yes


Consent


Initiated By: STATE OF CONNECTICUT DEPARTMENT OF BANKING


Cease and Desist



Docket/Case Number: DOCKET NO. CO-10-7801-S



Allegations: IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASAA, THE STATE OF CONNECTICUT ALLEGED THATTHE FIRM'S AGENTS INACCURATELY DESCRIBED ARS IN VIOLATION OFCONNECTICUT UNIFORM SECURITIES ACT §§ 36B-4 AND 36B-15(A)(2)(H),AND THE FIRM FAILED TO SUPERVISE THE SALE OF ARS IN VIOLATION OFTHE REGULATIONS OF CONNECTICUT STATE AGENCIES § 36B-31-6F(B).








Resolution:


Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THEORDER, AND CONSENTS TO THE ENTRY OF THE ORDER BY THECONNECTICUT DEPARTMENT OF BANKING.

Firm Statement THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE STATE OF CONNECTICUT DEPARTMENT OF BANKING("DEPARTMENT") ALLEGED THAT THE FIRM'S CONDUCT IN CONNECTIONWITH THE MARKETING AND SALE OF ARS TO RETAIL AND OTHERCUSTOMERS VIOLATED CONNECTICUT UNIFORM SECURITIES ACT §§ 36-4AND 36B-15(A)(2)(H), AND § 36B-31-6F(B) OF THE REGULATIONS OFCONNECTICUT STATE AGENCIES. WITHOUT ADMITTING OR DENYING THEALLEGATIONS, THE FIRM AGREED TO CEASE AND DESIST FROMVIOLATING THE CONNECTICUT UNIFORM SECURITIES ACT, AND TOCERTAIN UNDERTAKINGS, INCLUDING OFFERING TO BUY BACK ELIGIBLEARS FROM CERTAIN INDIVIDUAL INVESTORS. THE FIRM ALSO AGREED TOPAY THE DEPARTMENT A CIVIL PENALTY OF $196,070.59, THIS STATE'SALLOCATED PORTION OF THE AMOUNT AGREED TO WITH NASAA. FINALLY,THE DEPARTMENT AND THE FIRM AGREED THAT THE CONSENT ORDERWOULD NOT SUBJECT THE FIRM TO ANY DISQUALIFICATIONS UNDER THEFEDERAL SECURITIES LAWS, WHICH WAS ALSO PART OF THE AGREEMENTWITH NASAA.


Consent


i


Allegations: IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASAA, THE STATE OF WYOMING ALLEGED THAT THEFIRM'S AGENTS INACCURATELY DESCRIBED ARS IN VIOLATION OFWYOMING SECURITIES ACT § 17-4-106(A)(II)(G), AND THE FIRM FAILED TOSUPERVISE THE SALE OF ARS IN VIOLATION OF WYOMING SECURITIESACT § 17-4-106(B)(II)(A).







Initiated By: WYOMING SECRETARY OF STATE, SECURITIES DIVISION


Cease and Desist






IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASAA, THE STATE OF WYOMING ALLEGED THAT THEFIRM'S AGENTS INACCURATELY DESCRIBED ARS IN VIOLATION OFWYOMING SECURITIES ACT § 17-4-106(A)(II)(G), AND THE FIRM FAILED TOSUPERVISE THE SALE OF ARS IN VIOLATION OF WYOMING SECURITIESACT § 17-4-106(B)(II)(A).


Resolution:


Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THEORDER, AND CONSENTS TO THE ENTRY OF THE ORDER BY THE WYOMINGSECRETARY OF STATE, SECURITIES DIVISION.

Firm Statement THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE WYOMING SECRETARY OF STATE, SECURITIESDIVISION ("DIVISION") ALLEGED THAT THE FIRM'S CONDUCT INCONNECTION WITH THE MARKETING AND SALE OF ARS TO RETAIL ANDOTHER CUSTOMERS VIOLATED WYOMING SECURITIES ACT §§ 17-4-106(B)(II)(A) AND 17-4-106(A)(II)(G). WITHOUT ADMITTING OR DENYING THEALLEGATIONS, THE FIRM AGREED TO CEASE AND DESIST FROMVIOLATING THE WYOMING SECURITIES ACT, AND TO CERTAINUNDERTAKINGS, INCLUDING OFFERING TO BUY BACK ELIGIBLE ARS FROMCERTAIN INDIVIDUAL INVESTORS. THE FIRM ALSO AGREED TO PAY THEDIVISION A CIVIL PENALTY OF $30,000.00, THIS STATE'S ALLOCATEDPORTION OF THE AMOUNT AGREED TO WITH NASAA. FINALLY, THEDIVISION AND THE FIRM AGREED THAT THE CONSENT ORDER WOULD NOTSUBJECT THE FIRM TO ANY DISQUALIFICATIONS UNDER THE FEDERALSECURITIES LAWS, WHICH WAS ALSO PART OF THE AGREEMENT WITHNASAA.


Settled






THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE WYOMING SECRETARY OF STATE, SECURITIESDIVISION ("DIVISION") ALLEGED THAT THE FIRM'S CONDUCT INCONNECTION WITH THE MARKETING AND SALE OF ARS TO RETAIL ANDOTHER CUSTOMERS VIOLATED WYOMING SECURITIES ACT §§ 17-4-106(B)(II)(A) AND 17-4-106(A)(II)(G). WITHOUT ADMITTING OR DENYING THEALLEGATIONS, THE FIRM AGREED TO CEASE AND DESIST FROMVIOLATING THE WYOMING SECURITIES ACT, AND TO CERTAINUNDERTAKINGS, INCLUDING OFFERING TO BUY BACK ELIGIBLE ARS FROMCERTAIN INDIVIDUAL INVESTORS. THE FIRM ALSO AGREED TO PAY THEDIVISION A CIVIL PENALTY OF $30,000.00, THIS STATE'S ALLOCATEDPORTION OF THE AMOUNT AGREED TO WITH NASAA. FINALLY, THEDIVISION AND THE FIRM AGREED THAT THE CONSENT ORDER WOULD NOTSUBJECT THE FIRM TO ANY DISQUALIFICATIONS UNDER THE FEDERALSECURITIES LAWS, WHICH WAS ALSO PART OF THE AGREEMENT WITHNASAA.


i


Initiated By: NEBRASKA DEPARTMENT OF BANKING & FINANCE


Cease and Desist



Docket/Case Number: N/A



Allegations: IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASAA, THE STATE OF NEBRASKA ALLEGED THAT THEFIRM'S AGENTS INACCURATELY DESCRIBED ARS IN VIOLATION OFNEBRASKA SECURITIES ACT § 8-1102(1), AND THE FIRM FAILED TOSUPERVISE THE SALE OF ARS IN VIOLATION OF NEBRASKA SECURITIESACT § 8-1103(9)(A)(XI).



Resolution:


Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THEORDER, AND CONSENTS TO THE ENTRY OF THE ORDER BY THENEBRASKA DEPARTMENT OF BANKING & FINANCE.

Firm Statement THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE NEBRASKA DEPARTMENT OF BANKING & FINANCE("DEPARTMENT") ALLEGED THAT THE FIRM'S CONDUCT IN CONNECTIONWITH THE MARKETING AND SALE OF ARS TO RETAIL AND OTHERCUSTOMERS VIOLATED NEBRASKA SECURITIES ACT §§ 8-1103(9)(A)(XI)AND 8-1102(1). WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THEFIRM AGREED TO CEASE AND DESIST FROM VIOLATING THE NEBRASKASECURITIES ACT, AND TO CERTAIN UNDERTAKINGS, INCLUDING OFFERINGTO BUY BACK ELIGIBLE ARS FROM CERTAIN INDIVIDUAL INVESTORS. THEFIRM ALSO AGREED TO PAY THE DEPARTMENT A CIVIL PENALTY OF$107,766.91, THIS STATE'S ALLOCATED PORTION OF THE AMOUNT AGREEDTO WITH NASAA. FINALLY, THE DEPARTMENT AND THE FIRM AGREED THATTHE CONSENT ORDER WOULD NOT SUBJECT THE FIRM TO ANYDISQUALIFICATIONS UNDER THE FEDERAL SECURITIES LAWS, WHICH WASALSO PART OF THE AGREEMENT WITH NASAA.


Settled






THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE NEBRASKA DEPARTMENT OF BANKING & FINANCE("DEPARTMENT") ALLEGED THAT THE FIRM'S CONDUCT IN CONNECTIONWITH THE MARKETING AND SALE OF ARS TO RETAIL AND OTHERCUSTOMERS VIOLATED NEBRASKA SECURITIES ACT §§ 8-1103(9)(A)(XI)AND 8-1102(1). WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THEFIRM AGREED TO CEASE AND DESIST FROM VIOLATING THE NEBRASKASECURITIES ACT, AND TO CERTAIN UNDERTAKINGS, INCLUDING OFFERINGTO BUY BACK ELIGIBLE ARS FROM CERTAIN INDIVIDUAL INVESTORS. THEFIRM ALSO AGREED TO PAY THE DEPARTMENT A CIVIL PENALTY OF$107,766.91, THIS STATE'S ALLOCATED PORTION OF THE AMOUNT AGREEDTO WITH NASAA. FINALLY, THE DEPARTMENT AND THE FIRM AGREED THATTHE CONSENT ORDER WOULD NOT SUBJECT THE FIRM TO ANYDISQUALIFICATIONS UNDER THE FEDERAL SECURITIES LAWS, WHICH WASALSO PART OF THE AGREEMENT WITH NASAA.


i


Initiated By: MISSISSIPPI SECRETARY OF STATE - SECURITIES AND CHARITIESDIVISION


Cease and Desist



Docket/Case Number: ADMIN. PROC. NO. S-09-0330



Allegations: IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASAA, THE STATE OF LOUISIANA ALLEGED THAT THEFIRM'S AGENTS INACCURATELY DESCRIBED ARS IN VIOLATION OFLOUISIANA SECURITIES ACT § 51:712A.(2) AND THE FIRM FAILED TOSUPERVISE THE SALE OF ARS UNDER THE ACT.



Resolution:



Settled







Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THEORDER, AND CONSENTS TO THE ENTRY OF THE ORDER BY THE STATE OFLOUISIANA - OFFICE OF FINANCIAL INSTITUTIONS - SECURITIES DIVISION.

Firm Statement THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE STATE OF LOUISIANA - OFFICE OF FINANCIALINSTITUTIONS - SECURITIES DIVISION ("DIVISION") ALLEGED THAT THEFIRM'S CONDUCT IN CONNECTION WITH THE MARKETING AND SALE OFARS TO RETAIL AND OTHER CUSTOMERS VIOLATED LOUISIANASECURITIES ACT § 51:712A.(2). WITHOUT ADMITTING OR DENYING THEALLEGATIONS, THE FIRM AGREED TO CEASE AND DESIST FROMVIOLATING THE LOUISIANA SECURITIES ACT, AND TO CERTAINUNDERTAKINGS, INCLUDING OFFERING TO BUY BACK ELIGIBLE ARS FROMCERTAIN INDIVIDUAL INVESTORS. THE FIRM ALSO AGREED TO PAY THEDIVISION A CIVIL PENALTY OF $43,893.61, THIS STATE'S ALLOCATEDPORTION OF THE AMOUNT AGREED TO WITH NASAA. FINALLY, THEDIVISION AND THE FIRM AGREED THAT THE CONSENT ORDER WOULD NOTSUBJECT THE FIRM TO ANY DISQUALIFICATIONS UNDER THE FEDERALSECURITIES LAWS, WHICH WAS ALSO PART OF THE AGREEMENT WITHNASAA.


i


Initiated By: LOUISIANA OFFICE OF FINANCIAL INSTITUTIONS - SECURITIES DIVISION


Docket/Case Number: CASE NO. OFI - 2010 - 009


Allegations: IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASAA, THE STATE OF LOUISIANA ALLEGED THAT THEFIRM'S AGENTS INACCURATELY DESCRIBED ARS IN VIOLATION OFLOUISIANA SECURITIES ACT § 51:712A.(2) AND THE FIRM FAILED TOSUPERVISE THE SALE OF ARS UNDER THE ACT.








Cease and Desist





Resolution:


Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THEORDER, AND CONSENTS TO THE ENTRY OF THE ORDER BY THE STATE OFLOUISIANA - OFFICE OF FINANCIAL INSTITUTIONS - SECURITIES DIVISION.

Firm Statement THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE STATE OF LOUISIANA - OFFICE OF FINANCIALINSTITUTIONS - SECURITIES DIVISION ("DIVISION") ALLEGED THAT THEFIRM'S CONDUCT IN CONNECTION WITH THE MARKETING AND SALE OFARS TO RETAIL AND OTHER CUSTOMERS VIOLATED LOUISIANASECURITIES ACT § 51:712A.(2). WITHOUT ADMITTING OR DENYING THEALLEGATIONS, THE FIRM AGREED TO CEASE AND DESIST FROMVIOLATING THE LOUISIANA SECURITIES ACT, AND TO CERTAINUNDERTAKINGS, INCLUDING OFFERING TO BUY BACK ELIGIBLE ARS FROMCERTAIN INDIVIDUAL INVESTORS. THE FIRM ALSO AGREED TO PAY THEDIVISION A CIVIL PENALTY OF $43,893.61, THIS STATE'S ALLOCATEDPORTION OF THE AMOUNT AGREED TO WITH NASAA. FINALLY, THEDIVISION AND THE FIRM AGREED THAT THE CONSENT ORDER WOULD NOTSUBJECT THE FIRM TO ANY DISQUALIFICATIONS UNDER THE FEDERALSECURITIES LAWS, WHICH WAS ALSO PART OF THE AGREEMENT WITHNASAA.


Settled


i







Initiated By: MICHIGAN OFFICE OF FINANCIAL AND INSURANCE REGULATION


Cease and Desist



Docket/Case Number: ENFORCEMENT CASE NO. 10-771



Allegations: IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASAA, THE STATE OF MICHIGAN ALLEGED THAT THEFIRM'S AGENTS INACCURATELY DESCRIBED ARS IN VIOLATION OFMICHIGAN UNIFORM SECURITIES ACT § 204(A)(1)(G), MCL 451.604(A)(1)(G),AND THE FIRM FAILED TO SUPERVISE THE SALE OF ARS IN VIOLATION OFMICHIGAN UNIFORM SECURITIES ACT § 204(A)(2), MCL 451.604(A)(2).



Resolution:


Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THEORDER, AND CONSENTS TO THE ENTRY OF THE ORDER BY THECOMMISSIONER OF THE MICHIGAN OFFICE OF FINANCIAL ANDINSURANCE REGULATION

Firm Statement THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE COMMISSIONER OF THE MICHIGAN OFFICE OFFINANCIAL AND INSURANCE REGULATION ("COMMISSIONER") ALLEGEDTHAT THE FIRM'S CONDUCT IN CONNECTION WITH THE MARKETING ANDSALE OF ARS TO RETAIL AND OTHER CUSTOMERS VIOLATED MICHIGANUNIFORM SECURITIES ACT § 204(A)(2), MCL 451.604(A)(2), AND §204(A)(1)(G), MCL 451.604(A)(1)(G). WITHOUT ADMITTING OR DENYING THEALLEGATIONS, THE FIRM AGREED TO CEASE AND DESIST FROMVIOLATING THE MICHIGAN UNIFORM SECURITIES ACT, AND TO CERTAINUNDERTAKINGS, INCLUDING OFFERING TO BUY BACK ELIGIBLE ARS FROMCERTAIN INDIVIDUAL INVESTORS. THE FIRM ALSO AGREED TO PAY THECOMMISSIONER A CIVIL PENALTY OF $131,637.81, THIS STATE'SALLOCATED PORTION OF THE AMOUNT AGREED TO WITH NASAA. FINALLY,THE COMMISSIONER AND THE FIRM AGREED THAT THE CONSENT ORDERWOULD NOT SUBJECT THE FIRM TO ANY DISQUALIFICATIONS UNDER THEFEDERAL SECURITIES LAWS, WHICH WAS ALSO PART OF THE AGREEMENTWITH NASAA.


Settled






THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE COMMISSIONER OF THE MICHIGAN OFFICE OFFINANCIAL AND INSURANCE REGULATION ("COMMISSIONER") ALLEGEDTHAT THE FIRM'S CONDUCT IN CONNECTION WITH THE MARKETING ANDSALE OF ARS TO RETAIL AND OTHER CUSTOMERS VIOLATED MICHIGANUNIFORM SECURITIES ACT § 204(A)(2), MCL 451.604(A)(2), AND §204(A)(1)(G), MCL 451.604(A)(1)(G). WITHOUT ADMITTING OR DENYING THEALLEGATIONS, THE FIRM AGREED TO CEASE AND DESIST FROMVIOLATING THE MICHIGAN UNIFORM SECURITIES ACT, AND TO CERTAINUNDERTAKINGS, INCLUDING OFFERING TO BUY BACK ELIGIBLE ARS FROMCERTAIN INDIVIDUAL INVESTORS. THE FIRM ALSO AGREED TO PAY THECOMMISSIONER A CIVIL PENALTY OF $131,637.81, THIS STATE'SALLOCATED PORTION OF THE AMOUNT AGREED TO WITH NASAA. FINALLY,THE COMMISSIONER AND THE FIRM AGREED THAT THE CONSENT ORDERWOULD NOT SUBJECT THE FIRM TO ANY DISQUALIFICATIONS UNDER THEFEDERAL SECURITIES LAWS, WHICH WAS ALSO PART OF THE AGREEMENTWITH NASAA.


i


Initiated By: OREGON





Docket/Case Number: S-09-0053




Allegations: FAILURE TO SUPERVISE AND DISHONEST / UNETHICAL PRACTICES.



Resolution:

Other Sanctions Ordered: BUY BACK OF AUCTION RATE SECURITIES PAYMENT TO INVESTORSEDUCATION PROGRAM FUND.


No


Consent






Other Sanctions Ordered: BUY BACK OF AUCTION RATE SECURITIES PAYMENT TO INVESTORSEDUCATION PROGRAM FUND.

Sanction Details: PAYMENT OF $114,853.59; INCLUDES CIVIL PENALTY OF $109,110.91, ANDPAYMENT OF $5,742.68 FOR INVESTOR EDUCATION PROGRAM FUND.

Regulator Statement AUCTION RATE SECURITIES CASH RESOLVED BY CONSENT ORDER


Initiated By: OREGON DEPARTMENT OF CONSUMER AND BUSINESS SERVICES -DIVISION OF FINANCE AND CORPORATE SECURITIES


Cease and Desist



Docket/Case Number: FILE NO. S-09-0053



Allegations: IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASAA, THE STATE OF OREGON ALLEGED THAT THEFIRM'S AGENTS INACCURATELY DESCRIBED ARS IN VIOLATION OFOREGON REVISED STATUTE § 59.205(2), AND THE FIRM FAILED TOSUPERVISE THE SALE OF ARS IN VIOLATION OF OREGON REVISEDSTATUTE § 59.205(13).



Resolution:


Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THEORDER, AND CONSENTS TO THE ENTRY OF THE ORDER BY THE OREGONDEPARTMENT OF CONSUMER AND BUSINESS SERVICES - DIVISION OFFINANCE AND CORPORATE SECURITIES.

Firm Statement THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE OREGON DEPARTMENT OF CONSUMER ANDBUSINESS SERVICES - DIVISION OF FINANCE AND CORPORATESECURITIES ("DIVISION") ALLEGED THAT THE FIRM'S CONDUCT INCONNECTION WITH THE MARKETING AND SALE OF ARS TO RETAIL ANDOTHER CUSTOMERS VIOLATED OREGON REVISED STATUTES §§ 59.205(2)AND (13). WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRMAGREED TO CEASE AND DESIST FROM VIOLATING THE OREGONSECURITIES ACT, AND TO CERTAIN UNDERTAKINGS, INCLUDING OFFERINGTO BUY BACK ELIGIBLE ARS FROM CERTAIN INDIVIDUAL INVESTORS. THEFIRM ALSO AGREED TO PAY THE DIVISION A CIVIL PENALTY OF $114,853.59,THIS STATE'S ALLOCATED PORTION OF THE AMOUNT AGREED TO WITHNASAA. FINALLY, THE DIVISION AND THE FIRM AGREED THAT THECONSENT ORDER WOULD NOT SUBJECT THE FIRM TO ANYDISQUALIFICATIONS UNDER THE FEDERAL SECURITIES LAWS, WHICH WASALSO PART OF THE AGREEMENT WITH NASAA.


Settled






Firm Statement THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE OREGON DEPARTMENT OF CONSUMER ANDBUSINESS SERVICES - DIVISION OF FINANCE AND CORPORATESECURITIES ("DIVISION") ALLEGED THAT THE FIRM'S CONDUCT INCONNECTION WITH THE MARKETING AND SALE OF ARS TO RETAIL ANDOTHER CUSTOMERS VIOLATED OREGON REVISED STATUTES §§ 59.205(2)AND (13). WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRMAGREED TO CEASE AND DESIST FROM VIOLATING THE OREGONSECURITIES ACT, AND TO CERTAIN UNDERTAKINGS, INCLUDING OFFERINGTO BUY BACK ELIGIBLE ARS FROM CERTAIN INDIVIDUAL INVESTORS. THEFIRM ALSO AGREED TO PAY THE DIVISION A CIVIL PENALTY OF $114,853.59,THIS STATE'S ALLOCATED PORTION OF THE AMOUNT AGREED TO WITHNASAA. FINALLY, THE DIVISION AND THE FIRM AGREED THAT THECONSENT ORDER WOULD NOT SUBJECT THE FIRM TO ANYDISQUALIFICATIONS UNDER THE FEDERAL SECURITIES LAWS, WHICH WASALSO PART OF THE AGREEMENT WITH NASAA.


i


Initiated By: UTAH DIVISION OF SECURITIES


Cease and Desist


Docket/Case Number: SD-10-0025




Allegations: THE DIVISION ALLEGES RESPONDENT: (1) FAILED TO REASONABLYSUPERVISE CERTAIN OF ITS REGISTERED SALESMEN IN THEIRCOMMUNICATION OF MATERIAL INFORMATION CONCERNING AUCTIONRATE SECURITIES, WARRANTING SANCTIONS UNDER SECTION 61-1-6(2)(A)(II)(J) OF THE UTAH UNIFORM SECURITIES ACT ("ACT"); AND (2)FAILED, THROUGH THE ACTIVITIES OF CERTAIN OF ITS REGISTEREDSALESMEN, TO ADEQUATELY STATE COMPLETE FACTS CONCERNINGAUCTION RATE SECURITIES, WARRANTING SANCTIONS UNDER SECTION61-1-6(2)(A)(II)(G) OF THE ACT.








Cease and Desist


ADMINISTRATIVE FINE


Resolution:


Sanction Details: THE ADMINISTRATIVE FINE TOTALED $226,748.43 AND WAS PAID WITHINTEN (10) DAYS AFTER ENTRY OF THE ORDER.

Regulator Statement A PDF COPY OF THE STIPULATION AND CONSENT ORDER CAN BE VIEWEDONLINE AT: HTTP://WWW.SECURITIES.UTAH.GOV/DOCKETS/10002501.PDF


Yes




Initiated By: UTAH DEPARTMENT OF COMMERCE - DIVISION OF SECURITIES


Cease and Desist


ADMINISTRATIVE FINE


Docket/Case Number: DOCKET NO. SD - 10 - 0025



Allegations: IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASAA, THE STATE OF UTAH ALLEGED THAT THEFIRM'S AGENTS INACCURATELY DESCRIBED ARS IN VIOLATION OF UTAHCODE ANNOTATED § 61-1-6(2)(A)(II)(G), AND THE FIRM FAILED TOSUPERVISE THE SALE OF ARS IN VIOLATION OF UTAH CODE ANNOTATED§§ 61-1-6(2)(A)(II)(J).








ADMINISTRATIVE FINE


Resolution:


Sanction Details: THE ADMINISTRATIVE FINE TOTALED $226,748.43 AND WAS PAID WITHINTEN (10) DAYS AFTER ENTRY OF THE ORDER.

Firm Statement THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE UTAH DEPARTMENT OF COMMERCE - DIVISION OFSECURITIES ("DIVISION") ALLEGED THAT THE FIRM'S CONDUCT INCONNECTION WITH THE MARKETING AND SALE OF ARS TO RETAIL ANDOTHER CUSTOMERS VIOLATED UTAH CODE ANNOTATED §§ 61-1-6(2)(A)(II)(G) AND (J). WITHOUT ADMITTING OR DENYING THEALLEGATIONS, THE FIRM AGREED TO CEASE AND DESIST FROMVIOLATING THE UTAH UNIFORM SECURITIES ACT, AND TO CERTAINUNDERTAKINGS, INCLUDING OFFERING TO BUY BACK ELIGIBLE ARS FROMCERTAIN INDIVIDUAL INVESTORS. THE FIRM ALSO AGREED TO PAY THEDIVISION A CIVIL PENALTY OF $226,748.43, THIS STATE'S ALLOCATEDPORTION OF THE AMOUNT AGREED TO WITH NASAA. FINALLY, THEDIVISION AND THE FIRM AGREED THAT THE CONSENT ORDER WOULD NOTSUBJECT THE FIRM TO ANY DISQUALIFICATIONS UNDER THE FEDERALSECURITIES LAWS, WHICH WAS ALSO PART OF THE AGREEMENT WITHNASAA.




i


Allegations: SEC RULE 10B-10, SEC RULE 605 OF REGULATION NMS, NASD RULES 2110,3340, 6130(B), 6130(G), 6230(A), 6955(A), MSRB RULE G-14 - CREDIT SUISSESECURITIES (USA) LLC TRANSMITTED REPORTS TO THE ORDER AUDITTRAIL SYSTEM (OATS) THAT IMPROPERLY REPORTED EXECUTION ORCOMBINED ORDER/EXECUTION REPORTS WITH A REPORTING EXCEPTIONCODE WHEN THE EXECUTION REPORTS WERE REQUIRED TO BEMATCHED TO A RELATED TRADE REPORT IN THE AUTOMATEDCONFIRMATION TRANSACTION SERVICE ACT)AND THE FIRM REPORTEDAN INCORRECT CAPACITY CODE FOR THE SAME EXECUTION REPORTS;REPORTS FAILED TO INCLUDE ROUTE REPORT INFORMATION OR DESKREPORT INFORMATION, OR HAD AN INCORRECT CAPACITY CODE. OATSWAS UNABLE TO MATCH ROUTE OR COMBINED ORDER/ROUTE REPORTSFROM A SENDING FIRM TO A RELATED NEW ORDER REPORT SUBMITTEDBY THE FIRM WHEN THE FIRM WAS NAMED AS THE "SENT TO FIRM;" ANDFAILED TO TRANSMIT REPORTABLE ORDER EVENTS (ROES) TO OATS. THEFIRM FAILED TO REPORT TO THE TRADE REPORTING AND COMPLIANCEENGINE (TRACE) TRANSACTIONS IN TRACE-ELIGIBLE SECURITIES WITHIN15 MINUTES OF THE TIME OF EXECUTION. THIS CONDUCT CONSTITUTESDISTINCT VIOLATIONS OF NASD RULE 6230(A) AND A PATTERN ORPRACTICE OF LATE REPORTNG WITHOUT EXCEPTIONAL CIRCUMSTANCESIN VIOLATION OF NASD RULE 2110. THE FIRM FAILED TO PROVIDEWRITTEN NOTIFICATION DISCLOSING TO ITS CUSTOMERS THE CORRECTEXECUTION CAPACITY ON CUSTOMER CONFIRMATIONS; FAILED TOPROVIDE WRITTEN NOTIFICATION DISCLOSING TO ITS CUSTOMERS THECORRECT EXECUTION CAPACITY ON CUSTOMER CONFIRMATIONS AND TOPROVIDE WRITTEN NOTIFICATION DISCLOSING TO ITS CUSTOMERS THATTRANSACTIONS WERE EXECUTED AT AN AVERAGE PRICE; ANDINCORRECTLY DISCLOSED ON CONFIRMATIONS THAT A "COMMISSION"WAS CHARGED FOR ORDERS FILLED ENTIRELY IN A PRINCIPAL CAPACITY.THE FIRM EFFECTED TRANSACTIONS IN SECURITIES WHILE A TRADINGHALT WAS IN EFFECT WITH RESPECT TO EACH OF THE SECURITIES. THEFIRM REPORTED NUMEROUS TRANSACTIONS IN MUNICIPAL SECURITIESTO THE REAL-TIME TRANSACTION REPORTING SYSTEM (RTRS) WITH ANULL OR NUMERIC VALUE IN THE CONTRAPARTY CORRESPONDENT IDFIELD. THE FIRM FAILED TO ACCEPT OR DECLINE IN THE NASD/NASDAQTRADE REPORTING FACILITY AND THE OTC REPORTING FACILITYNUMEROUS TRANSACTIONS IN REPORTABLE SECURITIES WITHIN 20MINUTES AFTER EXECUTION THAT IT HAD AN OBLIGATION TO ACCEPT ORDECLINE AS THE ORDER ENTRY IDENTIFIER (OEID). THE FIRM FAILED TOREPORT INFORMATION REGARDING PURCHASE AND SALETRANSACTIONS EFFECTED IN MUNICIPAL SECURITIES TO THE RTRS INTHE MANNER PRESCRIBED BY RULE G-14 RTRS PROCEDURES AND THERTRS USERS MANUAL; THE FIRM FAILED TO REPORT INFORMATIONABOUT THE TRANSACTIONS WITHIN 15 MINUTES OF TIME OF TRADE TO ANRTRS PORTAL AND DOUBLE REPORTED TRANSACTIONS IN MUNICIPALSECURITIES TO THE RTRS. THE FIRM FAILED TO PROVIDE WRITTENNOTIFICATION DISCLOSING TO CUSTOMERS THE ACCURATECOMPENSATION TYPE, ITS CORRECT CAPACITY IN TRANSACTIONS AND,ON ONE OCCASION, FAILED TO DISCLOSE ITS CORRECT CAPACITY IN ATRANSACTION AND THAT IT WAS A MARKET MAKER IN THE SECURITY. FORONE MONTH, THE FIRM MADE AVAILABLE A REPORT ON THE COVEREDORDERS IN NATIONAL MARKET SYSTEM SECURITIES THAT IT RECEIVEDFOR EXECUTION FROM ANY PERSON THAT INCLUDED INCORRECTINFORMATION AS TO CANCELLED SHARES, AWAY EXECUTED SHARES,AVERAGE REALIZED SPREAD, AVERAGE EFFECTIVE SPREAD, PRICEIMPROVED SHARES, PRICE IMPROVED AVERAGE AMOUNT AND PRICEIMPROVED AVERAGE TIME. THE FIRM TRANSMITTED TRADE REPORTSFOR ODD-LOT TRADES AND FAILED TO REPORT THE TRANSACTIONS WITHTHE REQUIRED ODD-LOT MODIFIER OF .RO TO THE NASD/NASDAQ TRADEREPORTING FACILITY AND THE FINRA/NASDAQ TRADE REPORTINGFACILITY.






www.finra.org/brokercheck User GuidanceSEC RULE 10B-10, SEC RULE 605 OF REGULATION NMS, NASD RULES 2110,3340, 6130(B), 6130(G), 6230(A), 6955(A), MSRB RULE G-14 - CREDIT SUISSESECURITIES (USA) LLC TRANSMITTED REPORTS TO THE ORDER AUDITTRAIL SYSTEM (OATS) THAT IMPROPERLY REPORTED EXECUTION ORCOMBINED ORDER/EXECUTION REPORTS WITH A REPORTING EXCEPTIONCODE WHEN THE EXECUTION REPORTS WERE REQUIRED TO BEMATCHED TO A RELATED TRADE REPORT IN THE AUTOMATEDCONFIRMATION TRANSACTION SERVICE ACT)AND THE FIRM REPORTEDAN INCORRECT CAPACITY CODE FOR THE SAME EXECUTION REPORTS;REPORTS FAILED TO INCLUDE ROUTE REPORT INFORMATION OR DESKREPORT INFORMATION, OR HAD AN INCORRECT CAPACITY CODE. OATSWAS UNABLE TO MATCH ROUTE OR COMBINED ORDER/ROUTE REPORTSFROM A SENDING FIRM TO A RELATED NEW ORDER REPORT SUBMITTEDBY THE FIRM WHEN THE FIRM WAS NAMED AS THE "SENT TO FIRM;" ANDFAILED TO TRANSMIT REPORTABLE ORDER EVENTS (ROES) TO OATS. THEFIRM FAILED TO REPORT TO THE TRADE REPORTING AND COMPLIANCEENGINE (TRACE) TRANSACTIONS IN TRACE-ELIGIBLE SECURITIES WITHIN15 MINUTES OF THE TIME OF EXECUTION. THIS CONDUCT CONSTITUTESDISTINCT VIOLATIONS OF NASD RULE 6230(A) AND A PATTERN ORPRACTICE OF LATE REPORTNG WITHOUT EXCEPTIONAL CIRCUMSTANCESIN VIOLATION OF NASD RULE 2110. THE FIRM FAILED TO PROVIDEWRITTEN NOTIFICATION DISCLOSING TO ITS CUSTOMERS THE CORRECTEXECUTION CAPACITY ON CUSTOMER CONFIRMATIONS; FAILED TOPROVIDE WRITTEN NOTIFICATION DISCLOSING TO ITS CUSTOMERS THECORRECT EXECUTION CAPACITY ON CUSTOMER CONFIRMATIONS AND TOPROVIDE WRITTEN NOTIFICATION DISCLOSING TO ITS CUSTOMERS THATTRANSACTIONS WERE EXECUTED AT AN AVERAGE PRICE; ANDINCORRECTLY DISCLOSED ON CONFIRMATIONS THAT A "COMMISSION"WAS CHARGED FOR ORDERS FILLED ENTIRELY IN A PRINCIPAL CAPACITY.THE FIRM EFFECTED TRANSACTIONS IN SECURITIES WHILE A TRADINGHALT WAS IN EFFECT WITH RESPECT TO EACH OF THE SECURITIES. THEFIRM REPORTED NUMEROUS TRANSACTIONS IN MUNICIPAL SECURITIESTO THE REAL-TIME TRANSACTION REPORTING SYSTEM (RTRS) WITH ANULL OR NUMERIC VALUE IN THE CONTRAPARTY CORRESPONDENT IDFIELD. THE FIRM FAILED TO ACCEPT OR DECLINE IN THE NASD/NASDAQTRADE REPORTING FACILITY AND THE OTC REPORTING FACILITYNUMEROUS TRANSACTIONS IN REPORTABLE SECURITIES WITHIN 20MINUTES AFTER EXECUTION THAT IT HAD AN OBLIGATION TO ACCEPT ORDECLINE AS THE ORDER ENTRY IDENTIFIER (OEID). THE FIRM FAILED TOREPORT INFORMATION REGARDING PURCHASE AND SALETRANSACTIONS EFFECTED IN MUNICIPAL SECURITIES TO THE RTRS INTHE MANNER PRESCRIBED BY RULE G-14 RTRS PROCEDURES AND THERTRS USERS MANUAL; THE FIRM FAILED TO REPORT INFORMATIONABOUT THE TRANSACTIONS WITHIN 15 MINUTES OF TIME OF TRADE TO ANRTRS PORTAL AND DOUBLE REPORTED TRANSACTIONS IN MUNICIPALSECURITIES TO THE RTRS. THE FIRM FAILED TO PROVIDE WRITTENNOTIFICATION DISCLOSING TO CUSTOMERS THE ACCURATECOMPENSATION TYPE, ITS CORRECT CAPACITY IN TRANSACTIONS AND,ON ONE OCCASION, FAILED TO DISCLOSE ITS CORRECT CAPACITY IN ATRANSACTION AND THAT IT WAS A MARKET MAKER IN THE SECURITY. FORONE MONTH, THE FIRM MADE AVAILABLE A REPORT ON THE COVEREDORDERS IN NATIONAL MARKET SYSTEM SECURITIES THAT IT RECEIVEDFOR EXECUTION FROM ANY PERSON THAT INCLUDED INCORRECTINFORMATION AS TO CANCELLED SHARES, AWAY EXECUTED SHARES,AVERAGE REALIZED SPREAD, AVERAGE EFFECTIVE SPREAD, PRICEIMPROVED SHARES, PRICE IMPROVED AVERAGE AMOUNT AND PRICEIMPROVED AVERAGE TIME. THE FIRM TRANSMITTED TRADE REPORTSFOR ODD-LOT TRADES AND FAILED TO REPORT THE TRANSACTIONS WITHTHE REQUIRED ODD-LOT MODIFIER OF .RO TO THE NASD/NASDAQ TRADEREPORTING FACILITY AND THE FINRA/NASDAQ TRADE REPORTINGFACILITY.






Initiated By: FINRA





Principal Product Type: Debt - Municipal

Other Product Type(s): TRACE-ELIGIBLE SECURITIES, REPORTABLE SECURITIES, NATIONALMARKET SYSTEM SECURITIES

SEC RULE 10B-10, SEC RULE 605 OF REGULATION NMS, NASD RULES 2110,3340, 6130(B), 6130(G), 6230(A), 6955(A), MSRB RULE G-14 - CREDIT SUISSESECURITIES (USA) LLC TRANSMITTED REPORTS TO THE ORDER AUDITTRAIL SYSTEM (OATS) THAT IMPROPERLY REPORTED EXECUTION ORCOMBINED ORDER/EXECUTION REPORTS WITH A REPORTING EXCEPTIONCODE WHEN THE EXECUTION REPORTS WERE REQUIRED TO BEMATCHED TO A RELATED TRADE REPORT IN THE AUTOMATEDCONFIRMATION TRANSACTION SERVICE ACT)AND THE FIRM REPORTEDAN INCORRECT CAPACITY CODE FOR THE SAME EXECUTION REPORTS;REPORTS FAILED TO INCLUDE ROUTE REPORT INFORMATION OR DESKREPORT INFORMATION, OR HAD AN INCORRECT CAPACITY CODE. OATSWAS UNABLE TO MATCH ROUTE OR COMBINED ORDER/ROUTE REPORTSFROM A SENDING FIRM TO A RELATED NEW ORDER REPORT SUBMITTEDBY THE FIRM WHEN THE FIRM WAS NAMED AS THE "SENT TO FIRM;" ANDFAILED TO TRANSMIT REPORTABLE ORDER EVENTS (ROES) TO OATS. THEFIRM FAILED TO REPORT TO THE TRADE REPORTING AND COMPLIANCEENGINE (TRACE) TRANSACTIONS IN TRACE-ELIGIBLE SECURITIES WITHIN15 MINUTES OF THE TIME OF EXECUTION. THIS CONDUCT CONSTITUTESDISTINCT VIOLATIONS OF NASD RULE 6230(A) AND A PATTERN ORPRACTICE OF LATE REPORTNG WITHOUT EXCEPTIONAL CIRCUMSTANCESIN VIOLATION OF NASD RULE 2110. THE FIRM FAILED TO PROVIDEWRITTEN NOTIFICATION DISCLOSING TO ITS CUSTOMERS THE CORRECTEXECUTION CAPACITY ON CUSTOMER CONFIRMATIONS; FAILED TOPROVIDE WRITTEN NOTIFICATION DISCLOSING TO ITS CUSTOMERS THECORRECT EXECUTION CAPACITY ON CUSTOMER CONFIRMATIONS AND TOPROVIDE WRITTEN NOTIFICATION DISCLOSING TO ITS CUSTOMERS THATTRANSACTIONS WERE EXECUTED AT AN AVERAGE PRICE; ANDINCORRECTLY DISCLOSED ON CONFIRMATIONS THAT A "COMMISSION"WAS CHARGED FOR ORDERS FILLED ENTIRELY IN A PRINCIPAL CAPACITY.THE FIRM EFFECTED TRANSACTIONS IN SECURITIES WHILE A TRADINGHALT WAS IN EFFECT WITH RESPECT TO EACH OF THE SECURITIES. THEFIRM REPORTED NUMEROUS TRANSACTIONS IN MUNICIPAL SECURITIESTO THE REAL-TIME TRANSACTION REPORTING SYSTEM (RTRS) WITH ANULL OR NUMERIC VALUE IN THE CONTRAPARTY CORRESPONDENT IDFIELD. THE FIRM FAILED TO ACCEPT OR DECLINE IN THE NASD/NASDAQTRADE REPORTING FACILITY AND THE OTC REPORTING FACILITYNUMEROUS TRANSACTIONS IN REPORTABLE SECURITIES WITHIN 20MINUTES AFTER EXECUTION THAT IT HAD AN OBLIGATION TO ACCEPT ORDECLINE AS THE ORDER ENTRY IDENTIFIER (OEID). THE FIRM FAILED TOREPORT INFORMATION REGARDING PURCHASE AND SALETRANSACTIONS EFFECTED IN MUNICIPAL SECURITIES TO THE RTRS INTHE MANNER PRESCRIBED BY RULE G-14 RTRS PROCEDURES AND THERTRS USERS MANUAL; THE FIRM FAILED TO REPORT INFORMATIONABOUT THE TRANSACTIONS WITHIN 15 MINUTES OF TIME OF TRADE TO ANRTRS PORTAL AND DOUBLE REPORTED TRANSACTIONS IN MUNICIPALSECURITIES TO THE RTRS. THE FIRM FAILED TO PROVIDE WRITTENNOTIFICATION DISCLOSING TO CUSTOMERS THE ACCURATECOMPENSATION TYPE, ITS CORRECT CAPACITY IN TRANSACTIONS AND,ON ONE OCCASION, FAILED TO DISCLOSE ITS CORRECT CAPACITY IN ATRANSACTION AND THAT IT WAS A MARKET MAKER IN THE SECURITY. FORONE MONTH, THE FIRM MADE AVAILABLE A REPORT ON THE COVEREDORDERS IN NATIONAL MARKET SYSTEM SECURITIES THAT IT RECEIVEDFOR EXECUTION FROM ANY PERSON THAT INCLUDED INCORRECTINFORMATION AS TO CANCELLED SHARES, AWAY EXECUTED SHARES,AVERAGE REALIZED SPREAD, AVERAGE EFFECTIVE SPREAD, PRICEIMPROVED SHARES, PRICE IMPROVED AVERAGE AMOUNT AND PRICEIMPROVED AVERAGE TIME. THE FIRM TRANSMITTED TRADE REPORTSFOR ODD-LOT TRADES AND FAILED TO REPORT THE TRANSACTIONS WITHTHE REQUIRED ODD-LOT MODIFIER OF .RO TO THE NASD/NASDAQ TRADEREPORTING FACILITY AND THE FINRA/NASDAQ TRADE REPORTINGFACILITY.


Resolution:




No



iReporting Source:








Allegations: SEC RULE 10B-10, SEC RULE 605 OF REGULATION NMS, NASD RULES 2110,3340, 6130(B), 6130(G), 6230(A), 6955(A), MSRB RULE G-14 - CREDIT SUISSESECURITIES (USA) LLC TRANSMITTED REPORTS TO THE ORDER AUDITTRAIL SYSTEM (OATS) THAT IMPROPERLY REPORTED EXECUTION ORCOMBINED ORDER/EXECUTION REPORTS WITH A REPORTING EXCEPTIONCODE WHEN THE EXECUTION REPORTS WERE REQUIRED TO BEMATCHED TO A RELATED TRADE REPORT IN THE AUTOMATEDCONFIRMATION TRANSACTION SERVICE ACT)AND THE FIRM REPORTEDAN INCORRECT CAPACITY CODE FOR THE SAME EXECUTION REPORTS;REPORTS FAILED TO INCLUDE ROUTE REPORT INFORMATION OR DESKREPORT INFORMATION, OR HAD AN INCORRECT CAPACITY CODE. OATSWAS UNABLE TO MATCH ROUTE OR COMBINED ORDER/ROUTE REPORTSFROM A SENDING FIRM TO A RELATED NEW ORDER REPORT SUBMITTEDBY THE FIRM WHEN THE FIRM WAS NAMED AS THE "SENT TO FIRM;" ANDFAILED TO TRANSMIT REPORTABLE ORDER EVENTS (ROES) TO OATS. THEFIRM FAILED TO REPORT TO THE TRADE REPORTING AND COMPLIANCEENGINE (TRACE) TRANSACTIONS IN TRACE-ELIGIBLE SECURITIES WITHIN15 MINUTES OF THE TIME OF EXECUTION. THIS CONDUCT CONSTITUTESDISTINCT VIOLATIONS OF NASD RULE 6230(A) AND A PATTERN ORPRACTICE OF LATE REPORTNG WITHOUT EXCEPTIONAL CIRCUMSTANCESIN VIOLATION OF NASD RULE 2110. THE FIRM FAILED TO PROVIDEWRITTEN NOTIFICATION DISCLOSING TO ITS CUSTOMERS THE CORRECTEXECUTION CAPACITY ON CUSTOMER CONFIRMATIONS; FAILED TOPROVIDE WRITTEN NOTIFICATION DISCLOSING TO ITS CUSTOMERS THECORRECT EXECUTION CAPACITY ON CUSTOMER CONFIRMATIONS AND TOPROVIDE WRITTEN NOTIFICATION DISCLOSING TO ITS CUSTOMERS THATTRANSACTIONS WERE EXECUTED AT AN AVERAGE PRICE; ANDINCORRECTLY DISCLOSED ON CONFIRMATIONS THAT A "COMMISSION"WAS CHARGED FOR ORDERS FILLED ENTIRELY IN A PRINCIPAL CAPACITY.THE FIRM EFFECTED TRANSACTIONS IN SECURITIES WHILE A TRADINGHALT WAS IN EFFECT WITH RESPECT TO EACH OF THE SECURITIES. THEFIRM REPORTED NUMEROUS TRANSACTIONS IN MUNICIPAL SECURITIESTO THE REAL-TIME TRANSACTION REPORTING SYSTEM (RTRS) WITH ANULL OR NUMERIC VALUE IN THE CONTRAPARTY CORRESPONDENT IDFIELD. THE FIRM FAILED TO ACCEPT OR DECLINE IN THE NASD/NASDAQTRADE REPORTING FACILITY AND THE OTC REPORTING FACILITYNUMEROUS TRANSACTIONS IN REPORTABLE SECURITIES WITHIN 20MINUTES AFTER EXECUTION THAT IT HAD AN OBLIGATION TO ACCEPT ORDECLINE AS THE ORDER ENTRY IDENTIFIER (OEID). THE FIRM FAILED TOREPORT INFORMATION REGARDING PURCHASE AND SALETRANSACTIONS EFFECTED IN MUNICIPAL SECURITIES TO THE RTRS INTHE MANNER PRESCRIBED BY RULE G-14 RTRS PROCEDURES AND THERTRS USERS MANUAL; THE FIRM FAILED TO REPORT INFORMATIONABOUT THE TRANSACTIONS WITHIN 15 MINUTES OF TIME OF TRADE TO ANRTRS PORTAL AND DOUBLE REPORTED TRANSACTIONS IN MUNICIPALSECURITIES TO THE RTRS. THE FIRM FAILED TO PROVIDE WRITTENNOTIFICATION DISCLOSING TO CUSTOMERS THE ACCURATECOMPENSATION TYPE, ITS CORRECT CAPACITY IN TRANSACTIONS AND,ON ONE OCCASION, FAILED TO DISCLOSE ITS CORRECT CAPACITY IN ATRANSACTION AND THAT IT WAS A MARKET MAKER IN THE SECURITY. FORONE MONTH, THE FIRM MADE AVAILABLE A REPORT ON THE COVEREDORDERS IN NATIONAL MARKET SYSTEM SECURITIES THAT IT RECEIVEDFOR EXECUTION FROM ANY PERSON THAT INCLUDED INCORRECTINFORMATION AS TO CANCELLED SHARES, AWAY EXECUTED SHARES,AVERAGE REALIZED SPREAD, AVERAGE EFFECTIVE SPREAD, PRICEIMPROVED SHARES, PRICE IMPROVED AVERAGE AMOUNT AND PRICEIMPROVED AVERAGE TIME. THE FIRM TRANSMITTED TRADE REPORTSFOR ODD-LOT TRADES AND FAILED TO REPORT THE TRANSACTIONS WITHTHE REQUIRED ODD-LOT MODIFIER OF .RO TO THE NASD/NASDAQ TRADEREPORTING FACILITY AND THE FINRA/NASDAQ TRADE REPORTINGFACILITY.







Initiated By: FINRA






Other Product Type(s): TRACE-ELIGIBLE SECURITIES, REPORTABLE SECURITIES, NATIONALMARKET SYSTEM SECURITIES

SEC RULE 10B-10, SEC RULE 605 OF REGULATION NMS, NASD RULES 2110,3340, 6130(B), 6130(G), 6230(A), 6955(A), MSRB RULE G-14 - CREDIT SUISSESECURITIES (USA) LLC TRANSMITTED REPORTS TO THE ORDER AUDITTRAIL SYSTEM (OATS) THAT IMPROPERLY REPORTED EXECUTION ORCOMBINED ORDER/EXECUTION REPORTS WITH A REPORTING EXCEPTIONCODE WHEN THE EXECUTION REPORTS WERE REQUIRED TO BEMATCHED TO A RELATED TRADE REPORT IN THE AUTOMATEDCONFIRMATION TRANSACTION SERVICE ACT)AND THE FIRM REPORTEDAN INCORRECT CAPACITY CODE FOR THE SAME EXECUTION REPORTS;REPORTS FAILED TO INCLUDE ROUTE REPORT INFORMATION OR DESKREPORT INFORMATION, OR HAD AN INCORRECT CAPACITY CODE. OATSWAS UNABLE TO MATCH ROUTE OR COMBINED ORDER/ROUTE REPORTSFROM A SENDING FIRM TO A RELATED NEW ORDER REPORT SUBMITTEDBY THE FIRM WHEN THE FIRM WAS NAMED AS THE "SENT TO FIRM;" ANDFAILED TO TRANSMIT REPORTABLE ORDER EVENTS (ROES) TO OATS. THEFIRM FAILED TO REPORT TO THE TRADE REPORTING AND COMPLIANCEENGINE (TRACE) TRANSACTIONS IN TRACE-ELIGIBLE SECURITIES WITHIN15 MINUTES OF THE TIME OF EXECUTION. THIS CONDUCT CONSTITUTESDISTINCT VIOLATIONS OF NASD RULE 6230(A) AND A PATTERN ORPRACTICE OF LATE REPORTNG WITHOUT EXCEPTIONAL CIRCUMSTANCESIN VIOLATION OF NASD RULE 2110. THE FIRM FAILED TO PROVIDEWRITTEN NOTIFICATION DISCLOSING TO ITS CUSTOMERS THE CORRECTEXECUTION CAPACITY ON CUSTOMER CONFIRMATIONS; FAILED TOPROVIDE WRITTEN NOTIFICATION DISCLOSING TO ITS CUSTOMERS THECORRECT EXECUTION CAPACITY ON CUSTOMER CONFIRMATIONS AND TOPROVIDE WRITTEN NOTIFICATION DISCLOSING TO ITS CUSTOMERS THATTRANSACTIONS WERE EXECUTED AT AN AVERAGE PRICE; ANDINCORRECTLY DISCLOSED ON CONFIRMATIONS THAT A "COMMISSION"WAS CHARGED FOR ORDERS FILLED ENTIRELY IN A PRINCIPAL CAPACITY.THE FIRM EFFECTED TRANSACTIONS IN SECURITIES WHILE A TRADINGHALT WAS IN EFFECT WITH RESPECT TO EACH OF THE SECURITIES. THEFIRM REPORTED NUMEROUS TRANSACTIONS IN MUNICIPAL SECURITIESTO THE REAL-TIME TRANSACTION REPORTING SYSTEM (RTRS) WITH ANULL OR NUMERIC VALUE IN THE CONTRAPARTY CORRESPONDENT IDFIELD. THE FIRM FAILED TO ACCEPT OR DECLINE IN THE NASD/NASDAQTRADE REPORTING FACILITY AND THE OTC REPORTING FACILITYNUMEROUS TRANSACTIONS IN REPORTABLE SECURITIES WITHIN 20MINUTES AFTER EXECUTION THAT IT HAD AN OBLIGATION TO ACCEPT ORDECLINE AS THE ORDER ENTRY IDENTIFIER (OEID). THE FIRM FAILED TOREPORT INFORMATION REGARDING PURCHASE AND SALETRANSACTIONS EFFECTED IN MUNICIPAL SECURITIES TO THE RTRS INTHE MANNER PRESCRIBED BY RULE G-14 RTRS PROCEDURES AND THERTRS USERS MANUAL; THE FIRM FAILED TO REPORT INFORMATIONABOUT THE TRANSACTIONS WITHIN 15 MINUTES OF TIME OF TRADE TO ANRTRS PORTAL AND DOUBLE REPORTED TRANSACTIONS IN MUNICIPALSECURITIES TO THE RTRS. THE FIRM FAILED TO PROVIDE WRITTENNOTIFICATION DISCLOSING TO CUSTOMERS THE ACCURATECOMPENSATION TYPE, ITS CORRECT CAPACITY IN TRANSACTIONS AND,ON ONE OCCASION, FAILED TO DISCLOSE ITS CORRECT CAPACITY IN ATRANSACTION AND THAT IT WAS A MARKET MAKER IN THE SECURITY. FORONE MONTH, THE FIRM MADE AVAILABLE A REPORT ON THE COVEREDORDERS IN NATIONAL MARKET SYSTEM SECURITIES THAT IT RECEIVEDFOR EXECUTION FROM ANY PERSON THAT INCLUDED INCORRECTINFORMATION AS TO CANCELLED SHARES, AWAY EXECUTED SHARES,AVERAGE REALIZED SPREAD, AVERAGE EFFECTIVE SPREAD, PRICEIMPROVED SHARES, PRICE IMPROVED AVERAGE AMOUNT AND PRICEIMPROVED AVERAGE TIME. THE FIRM TRANSMITTED TRADE REPORTSFOR ODD-LOT TRADES AND FAILED TO REPORT THE TRANSACTIONS WITHTHE REQUIRED ODD-LOT MODIFIER OF .RO TO THE NASD/NASDAQ TRADEREPORTING FACILITY AND THE FINRA/NASDAQ TRADE REPORTINGFACILITY.


Resolution:






i
















Allegations: NASDAQ RULE 4755 - CREDIT SUISSE SECURITIES (USA) LLC ENTEREDORDERS INTO THE NASDAQ MARKET CENTER THAT FAILED TOCORRECTLY INDICATE WHETHER THE ORDERS WERE A BUY, SHORT SALEOR LONG SALE.



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTION AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS FINED $5,000.


No




Allegations: NASDAQ RULE 4755 - CREDIT SUISSE SECURITIES (USA) LLC ENTEREDORDERS INTO THE NASDAQ MARKET CENTER THAT FAILED TOCORRECTLY INDICATE WHETHER THE ORDERS WERE A BUY, SHORT SALEOR LONG SALE.














NASDAQ RULE 4755 - CREDIT SUISSE SECURITIES (USA) LLC ENTEREDORDERS INTO THE NASDAQ MARKET CENTER THAT FAILED TOCORRECTLY INDICATE WHETHER THE ORDERS WERE A BUY, SHORT SALEOR LONG SALE.


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTION AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS FINED $5,000.




i


Initiated By: WISCONSIN DEPARTMENT OF FINANCIAL INSTITUTIONS - DIVISION OFSECURITIES


Docket/Case Number: FILE NO. S-09151(EX)



Allegations: IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASAA, THE STATE OF WISCONSIN ALLEGED THAT THEFIRM'S AGENTS INACCURATELY DESCRIBED ARS IN VIOLATION OF § 551.34(1)(G) OF THE WISCONSIN STATUTES AND THE FIRM FAILED TOSUPERVISE THE SALE OF ARS IN VIOLATION OF § 551.34(1)(J) OF THESTATUTES.








Cease and Desist




Resolution:


Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THEORDER, AND CONSENTS TO THE ENTRY OF THE ORDER BY THEWISCONSIN DEPARTMENT OF FINANCIAL INSTITUTIONS - DIVISION OFSECURITIES.

Firm Statement THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE WISCONSIN DEPARTMENT OF FINANCIALINSTITUTIONS - DIVISION OF SECURITIES ("DIVISION") ALLEGED THAT THEFIRM'S CONDUCT IN CONNECTION WITH THE MARKETING AND SALE OFARS TO RETAIL AND OTHER CUSTOMERS VIOLATED WIS. STATS. §§ 551.34(1)(G) AND (J). WITHOUT ADMITTING OR DENYING THE ALLEGATIONS,THE FIRM AGREED TO CEASE AND DESIST FROM VIOLATING THEWISCONSIN UNIFORM SECURITIES LAW, AND TO CERTAIN UNDERTAKINGS,INCLUDING OFFERING TO BUY BACK ELIGIBLE ARS FROM CERTAININDIVIDUAL INVESTORS. THE FIRM ALSO AGREED TO PAY THE DIVISION ACIVIL PENALTY OF $31,025.70, THIS STATE'S ALLOCATED PORTION OF THEAMOUNT AGREED TO WITH NASAA. FINALLY, THE DIVISION AND THE FIRMAGREED THAT THE CONSENT ORDER WOULD NOT SUBJECT THE FIRM TOANY DISQUALIFICATIONS UNDER THE FEDERAL SECURITIES LAWS, WHICHWAS ALSO PART OF THE AGREEMENT WITH NASAA.


Settled


i








Initiated By: TENNESSEE SECURITIES DIVISION


Cease and Desist



Docket/Case Number: ORDER NO. 10-001 (SI-2008-010)



Allegations: IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASAA, THE STATE OF TENNESSEE ALLEGED THAT THEFIRM'S AGENTS INACCURATELY DESCRIBED ARS IN VIOLATION OF § 48-2-112(A)(2)(G) OF THE TENNESSEE CODE ANNOTATED AND THE FIRM FAILEDTO SUPERVISE THE SALE OF ARS IN VIOLATION OF § 48-2-112(A)(2)(J) OFTHE CODE.


Resolution:


Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THEORDER, AND CONSENTS TO THE ENTRY OF THE ORDER BY THETENNESSEE SECURITIES DIVISION.

Firm Statement THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE TENNESSEE SECURITIES DIVISION ("DIVISION")ALLEGED THAT THE FIRM'S CONDUCT IN CONNECTION WITH THEMARKETING AND SALE OF ARS TO RETAIL AND OTHER CUSTOMERSVIOLATED TENN. CODE ANN. §§ 48-2-112(A)(2)(G) AND (J). WITHOUTADMITTING OR DENYING THE ALLEGATIONS, THE FIRM AGREED TO CEASEAND DESIST FROM VIOLATING THE TENNESSEE SECURITIES ACT OF 1980,AND TO CERTAIN UNDERTAKINGS, INCLUDING OFFERING TO BUY BACKELIGIBLE ARS FROM CERTAIN INDIVIDUAL INVESTORS. THE FIRM ALSOAGREED TO PAY THE DIVISION A CIVIL PENALTY OF $396,082.62, THISSTATE'S ALLOCATED PORTION OF THE AMOUNT AGREED TO WITH NASAA.FINALLY, THE DIVISION AND THE FIRM AGREED THAT THE CONSENTORDER WOULD NOT SUBJECT THE FIRM TO ANY DISQUALIFICATIONSUNDER THE FEDERAL SECURITIES LAWS, WHICH WAS ALSO PART OF THEAGREEMENT WITH NASAA.


Settled






THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE TENNESSEE SECURITIES DIVISION ("DIVISION")ALLEGED THAT THE FIRM'S CONDUCT IN CONNECTION WITH THEMARKETING AND SALE OF ARS TO RETAIL AND OTHER CUSTOMERSVIOLATED TENN. CODE ANN. §§ 48-2-112(A)(2)(G) AND (J). WITHOUTADMITTING OR DENYING THE ALLEGATIONS, THE FIRM AGREED TO CEASEAND DESIST FROM VIOLATING THE TENNESSEE SECURITIES ACT OF 1980,AND TO CERTAIN UNDERTAKINGS, INCLUDING OFFERING TO BUY BACKELIGIBLE ARS FROM CERTAIN INDIVIDUAL INVESTORS. THE FIRM ALSOAGREED TO PAY THE DIVISION A CIVIL PENALTY OF $396,082.62, THISSTATE'S ALLOCATED PORTION OF THE AMOUNT AGREED TO WITH NASAA.FINALLY, THE DIVISION AND THE FIRM AGREED THAT THE CONSENTORDER WOULD NOT SUBJECT THE FIRM TO ANY DISQUALIFICATIONSUNDER THE FEDERAL SECURITIES LAWS, WHICH WAS ALSO PART OF THEAGREEMENT WITH NASAA.


i


Initiated By: IOWA INSURANCE DIVISION


Cease and Desist



Docket/Case Number: DOCKET NO. 65678



Allegations: IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASAA, THE STATE OF IOWA ALLEGED THAT THE FIRM'SAGENTS INACCURATELY DESCRIBED ARS IN VIOLATION OF § 502.412(4)(M)OF THE IOWA CODE AND THE FIRM FAILED TO SUPERVISE THE SALE OFARS IN VIOLATION OF § 502.412(4)(I) OF THE CODE.



Resolution:


Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THEORDER, AND CONSENTS TO THE ENTRY OF THE ORDER BY THE IOWAINSURANCE DIVISION.

Firm Statement THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE IOWA INSURANCE DIVISION ("DIVISION") ALLEGEDTHAT THE FIRM'S CONDUCT IN CONNECTION WITH THE MARKETING ANDSALE OF ARS TO RETAIL AND OTHER CUSTOMERS VIOLATED IOWA CODE§§ 502.412(4)(I) AND (4)(M). WITHOUT ADMITTING OR DENYING THEALLEGATIONS, THE FIRM AGREED TO CEASE AND DESIST FROMVIOLATING THE IOWA UNIFORM SECURITIES ACT, AND TO CERTAINUNDERTAKINGS, INCLUDING OFFERING TO BUY BACK ELIGIBLE ARS FROMCERTAIN INDIVIDUAL INVESTORS. THE FIRM ALSO AGREED TO PAY THEDIVISION A CIVIL PENALTY OF $358,038.38, THIS STATE'S ALLOCATEDPORTION OF THE AMOUNT AGREED TO WITH NASAA. FINALLY, THEDIVISION AND THE FIRM AGREED THAT THE CONSENT ORDER WOULD NOTSUBJECT THE FIRM TO ANY DISQUALIFICATIONS UNDER THE FEDERALSECURITIES LAWS, WHICH WAS ALSO PART OF THE AGREEMENT WITHNASAA.


Settled





www.finra.org/brokercheck User GuidanceTHIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE IOWA INSURANCE DIVISION ("DIVISION") ALLEGEDTHAT THE FIRM'S CONDUCT IN CONNECTION WITH THE MARKETING ANDSALE OF ARS TO RETAIL AND OTHER CUSTOMERS VIOLATED IOWA CODE§§ 502.412(4)(I) AND (4)(M). WITHOUT ADMITTING OR DENYING THEALLEGATIONS, THE FIRM AGREED TO CEASE AND DESIST FROMVIOLATING THE IOWA UNIFORM SECURITIES ACT, AND TO CERTAINUNDERTAKINGS, INCLUDING OFFERING TO BUY BACK ELIGIBLE ARS FROMCERTAIN INDIVIDUAL INVESTORS. THE FIRM ALSO AGREED TO PAY THEDIVISION A CIVIL PENALTY OF $358,038.38, THIS STATE'S ALLOCATEDPORTION OF THE AMOUNT AGREED TO WITH NASAA. FINALLY, THEDIVISION AND THE FIRM AGREED THAT THE CONSENT ORDER WOULD NOTSUBJECT THE FIRM TO ANY DISQUALIFICATIONS UNDER THE FEDERALSECURITIES LAWS, WHICH WAS ALSO PART OF THE AGREEMENT WITHNASAA.


i


Initiated By: PENNSYLVANIA CONTACT: COUNSEL CAROLYN MENDELSON (412)-565-5083




WITHIN TEN DAYS AFTER ENTRY OF THIS ORDER, CREDIT SUISSESECURITIES (USA) LLC (RESPONDENT) SHALL PAY THE SUM OF$290,696.33 TO THE COMMONWEALTH OF PA, WHICH AMOUNTREPRESENTS AN ADMINISTRATIVE ASSESSMENT. RESPONDENT HASOFFERED A BUYBACK OF ARS TO ELIGIBLE PA RESIDENTS.





Other Product Type(s): AUCTION RATE SECURITIES (ARS)

Allegations: ARS SALES IN PA BY RESPONDENT CONSTITUTED ACTS AND CONDUCT TOFORM A BASIS FOR SANCTION PURSUANT TO THE PA SECURITIES ACT OF1972.


Resolution: Settled302©2020 FINRA. All rights reserved. Report about CREDIT SUISSE SECURITIES (USA) LLC






Resolution:

Other Sanctions Ordered: RESPONDENT HAS OFFERED A BUYBACK OF ARS TO ELIGIBLE PARESIDENTS. RESPONDENT SHALL ENDEAVOR TO WORK WITH ISSUERSAND OTHER INTERESTED PARTIES, INCLUDING REGULATORY ANDGOVERNMENTAL ENTITIES, TO EXPEDITIOUSLY PROVIDE LIQUIDITYSOLUTION FOR INSTITUTIONAL INVESTORS. RESPONDENT SHALL SUBMITQUARTERLY REPORTS TO NASAA.

Sanction Details: WITHIN TEN DAYS AFTER ENTRY OF THIS ORDER, CREDIT SUISSESECURITIES (USA) LLC (RESPONDENT) SHALL PAY THE SUM OF$290,696.33 TO THE COMMONWEALTH OF PA, WHICH AMOUNTREPRESENTS AN ADMINISTRATIVE ASSESSMENT. RESPONDENT SHALLPAY FOR PA RESIDENTS TO SUE IN SPECIAL EXPEDITED ARBITRATION FORCONSEQUENTIAL DAMAGES THAT PA RESIDENTS MAY HAVE INCURREDDUE TO ARS ILLIQUIDITY.

Regulator Statement FINDINGS OF FACT, CONCLUSIONS OF LAW AND ORDER ISSUED TORESPONDENT.


No


Settled


Initiated By: PENNSYLVANIA SECURITIES COMMISSION


Docket/Case Number: DOCKET NO. 2009-09-03



Allegations: IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASAA, THE STATE OF PENNSYLVANIA ALLEGED THATTHE FIRM'S AGENTS INACCURATELY DESCRIBED ARS IN VIOLATION OF §305(A)(IX) OF THE PENNSYLVANIA SECURITIES ACT AND THE FIRM FAILEDTO SUPERVISE THE SALE OF ARS IN VIOLATION OF § 305(A)(VII) OF THEACT.








Cease and Desist




Resolution:


Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THEORDER, AND CONSENTS TO THE ENTRY OF THE ORDER BY THEPENNSYLVANIA SECURITIES COMMISSION.

Firm Statement THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE PENNSYLVANIA SECURITIES COMMISSION("COMMISSION") ALLEGED THAT THE FIRM'S CONDUCT IN CONNECTIONWITH THE MARKETING AND SALE OF ARS TO RETAIL AND OTHERCUSTOMERS VIOLATED §§ 305(A)(VII) AND (A)(IX) OF THE PENNSYLVANIASECURITIES ACT OF 1972. WITHOUT ADMITTING OR DENYING THEALLEGATIONS, THE FIRM AGREED TO CEASE AND DESIST FROMVIOLATING THE PENNSYLVANIA SECURITIES ACT OF 1972, AND TOCERTAIN UNDERTAKINGS, INCLUDING OFFERING TO BUY BACK ELIGIBLEARS FROM CERTAIN INDIVIDUAL INVESTORS. THE FIRM ALSO AGREED TOPAY THE COMMISSION A CIVIL PENALTY OF $290,696.33, THIS STATE'SALLOCATED PORTION OF THE AMOUNT AGREED TO WITH NASAA. FINALLY,THE COMMISSION AND THE FIRM AGREED THAT THE CONSENT ORDERWOULD NOT SUBJECT THE FIRM TO ANY DISQUALIFICATIONS UNDER THEFEDERAL SECURITIES LAWS, WHICH WAS ALSO PART OF THE AGREEMENTWITH NASAA.


Settled


i








Initiated By: FLORIDA OFFICE OF FINANCIAL REGULATION ("OFFICE")




CEASE & DESIST


Docket/Case Number: 0453-S-9/09



Other Product Type(s): AUCTION RATE SECURITIES ("ARS")

Allegations: ON 3/1/2010, THE OFFICE, SUBSEQUENT TO COORDINATEDINVESTIGATIONS CONDUCTED BY A MULTI-STATE TASK FORCECONSISTING OF MEMBER STATES OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION ("NASAA"), ENTERED INTO A CONSENTAGREEMENT REGARDING CREDIT SUISSE'S ACTIVITIES IN THEMARKETING AND SALE OF ARS PRIOR TO WIDESPREAD FAILED AUCTIONSBEGINNING IN FEBRUARY 2008.


Resolution:

Other Sanctions Ordered: ON 3/1/2010, THE OFFICE ENTERED A FINAL ORDER ADOPTING THECONSENT AGREEMENT WHEREBY CREDIT SUISSE AGREED TO DO THEFOLLOWING: 1.) OFFER TO PURCHASE ARS AT PAR FOR CERTAIN "ELIGIBLE" INVESTORS, 2.) WORK WITH ISSUERS AND OTHERINTERESTED PARTIES, INCLUDING REGULATORY AND GOVERNMENTALENTITIE, TO PROVIDE LIQUIDITY SOLUTIONS FOR INSTITUTIONALINVESTORS, 3.) PARTICIPATE IN SPECIAL ARBITRATION PROCEDURES.

Sanction Details: THE ADMINISTRATIVE FINE AMOUNT OF $1,787,700.12 REPRESENTS THESTATE OF FLORIDA'S PRO RATA SHARE OF THE FIFTEEN MILLION DOLLAR($15,000,000.00) TOTAL PENALTY THAT CREDIT SUISSE AGREED TO PAYPURSUANT TO THE MULTI-STATE SETTLEMENT. AS THE RESULT OFCREDIT SUISSE'S RELIEF EFFORTS, TOTAL RESTITUTION PROVIDED TOFLORIDA PURCHASERS OF ARS TOTALED APPROXIMATELY$471,255,000.00.


No


Order





www.finra.org/brokercheck User GuidanceTHE ADMINISTRATIVE FINE AMOUNT OF $1,787,700.12 REPRESENTS THESTATE OF FLORIDA'S PRO RATA SHARE OF THE FIFTEEN MILLION DOLLAR($15,000,000.00) TOTAL PENALTY THAT CREDIT SUISSE AGREED TO PAYPURSUANT TO THE MULTI-STATE SETTLEMENT. AS THE RESULT OFCREDIT SUISSE'S RELIEF EFFORTS, TOTAL RESTITUTION PROVIDED TOFLORIDA PURCHASERS OF ARS TOTALED APPROXIMATELY$471,255,000.00.

Regulator Statement PER THE OFFICE'S FINAL ORDER DATED 3/1/2010 ADOPTING THE CONSENTAGREEMENT, CREDIT SUISSE, WITHOUT ADMITTING OR DENYING THESTATEMENT OF FACTS AND CONCLUSIONS OF LAW CONTAINED IN THEAGREEMENT, AND WITHOUT AN ADJUDICATION OF ANY ISSUE OF LAW ORFACT, CONSENTED TO THE ENTRY OF THE OFFICE'S FINDINGS OF FACTSAND CONCLUSIONS OF LAW THAT THROUGH THE ACTIVITIES OF CERTAINOF ITS REGISTERED SALESMEN THEY DEMONSTRATED UNWORTHINESSTO TRANSACT THE BUSINESS OF A DEALER AND FAILED TO REASONABLYSUPERVISE CERTAIN OF ITS REGISTERED SALESMEN IN THEIRCOMMUNICATION OF MATERIAL INFORMATION CONCERNING AUCTIONRATE SECURITIES.


Initiated By: STATE OF FLORIDA OFFICE OF FINANCIAL REGULATION


Cease and Desist



Docket/Case Number: NO. 0453-S-9/09



Allegations: IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASAA, THE STATE OF FLORIDA ALLEGED THAT THEFIRM'S AGENTS INACCURATELY DESCRIBED ARS IN VIOLATION OF §517.161(1)(H), FLORIDA STATUTES, AND RULE 69W-600.013(1)(H)1, FLORIDAADMINISTRATIVE CODE, AND THE FIRM FAILED TO SUPERVISE THE SALEOF ARS IN VIOLATION OF § 517.161(1)(H), FLORIDA STATUTES, AND RULE69W-600.013(1)(H)1, FLORIDA ADMINISTRATIVE CODE.



Resolution:


Sanctions Ordered: Monetary/Fine $1,787,700.12

Settled







Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THEORDER, AND CONSENTS TO THE ENTRY OF THE ORDER BY THE STATE OFFLORIDA OFFICE OF FINANCIAL REGULATION.

Firm Statement THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE STATE OF FLORIDA OFFICE OF FINANCIALREGULATION ("OFFICE") ALLEGED THAT THE FIRM'S CONDUCT INCONNECTION WITH THE MARKETING AND SALE OF ARS TO RETAIL ANDOTHER CUSTOMERS VIOLATED FLORIDA STATUTE § 517.161(1)(H) ANDFLORIDA ADMINISTRATIVE CODE 69W-600.013(1)(H)1. WITHOUT ADMITTINGOR DENYING THE ALLEGATIONS, THE FIRM AGREED TO CEASE ANDDESIST FROM VIOLATING THE FLORIDA SECURITIES AND INVESTORPROTECTION ACT, CHAPTER 517, FLORIDA STATUTES AND WILL COMPLYWITH THE PROVISIONS OF THAT ACT, AND TO CERTAIN UNDERTAKINGS,INCLUDING OFFERING TO BUY BACK ELIGIBLE ARS FROM CERTAININDIVIDUAL INVESTORS. THE FIRM ALSO AGREED TO PAY THE OFFICE ACIVIL PENALTY OF $1,787,700.12, THIS STATE'S ALLOCATED PORTION OFTHE AMOUNT AGREED TO WITH NASAA. FINALLY, THE OFFICE AND THEFIRM AGREED THAT THE CONSENT ORDER WOULD NOT SUBJECT THEFIRM TO ANY DISQUALIFICATIONS UNDER THE FEDERAL SECURITIESLAWS, WHICH WAS ALSO PART OF THE AGREEMENT WITH NASAA.


i


Initiated By: SECURITIES COMMISSIONER OF SOUTH CAROLINA


Docket/Case Number: FILE NUMBER 10006

Allegations: IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASAA, THE STATE OF SOUTH CAROLINA ALLEGEDTHAT THE FIRM'S AGENTS INACCURATELY DESCRIBED ARS IN VIOLATIONOF 23 S.C. CODE REG. 13-501, AND THE FIRM FAILED TO SUPERVISE THESALE OF ARS IN VIOLATION OF 23 S.C. CODE REG. 13-501.








Cease and Desist





Resolution:


Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THEORDER, AND CONSENTS TO THE ENTRY OF THE ORDER BY THE SOUTHCAROLINA SECURITIES COMMISSIONER.

Firm Statement THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE SECURITIES COMMISSIONER OF SOUTH CAROLINA("COMMISSIONER") ALLEGED THAT THE FIRM'S CONDUCT IN CONNECTIONWITH THE MARKETING AND SALE OF ARS TO RETAIL AND OTHERCUSTOMERS VIOLATED 23 S.C. CODE REG. 13-501. WITHOUT ADMITTINGOR DENYING THE ALLEGATIONS, THE FIRM AGREED TO CEASE ANDDESIST FROM VIOLATING THE SOUTH CAROLINA UNIFORM SECURITIESACT OF 2005, AND TO CERTAIN UNDERTAKINGS, INCLUDING OFFERING TOBUY BACK ELIGIBLE ARS FROM CERTAIN INDIVIDUAL INVESTORS. THEFIRM ALSO AGREED TO PAY THE COMMISSIONER A CIVIL PENALTY OF$32,983.86, THIS STATE'S ALLOCATED PORTION OF THE AMOUNT AGREEDTO WITH NASAA. FINALLY, THE COMMISSIONER AND THE FIRM AGREEDTHAT THE CONSENT ORDER WOULD NOT SUBJECT THE FIRM TO ANYDISQUALIFICATIONS UNDER THE FEDERAL SECURITIES LAWS, WHICH WASALSO PART OF THE AGREEMENT WITH NASAA.


Settled


i







Initiated By: NORTH CAROLINA SECURITIES DIVISION


Cease and Desist



Docket/Case Number: FILE NO. 08-SEC-0152



Allegations: IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASAA, THE STATE OF NORTH CAROLINA ALLEGEDTHAT THE FIRM'S AGENTS INACCURATELY DESCRIBED ARS IN VIOLATIONOF § 78A-39(A)(2)(G) OF THE NORTH CAROLINA GENERAL STATUTES ANDTITLE 18 NCAC 06.1414(B)(22), AND THE FIRM FAILED TO SUPERVISE THESALE OF ARS IN VIOLATION OF N.C.G.S. §§ 78A-39(A)(2)(B) AND 78A-39(A1)(2)A.



Resolution:


Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THEORDER, AND CONSENTS TO THE ENTRY OF THE ORDER BY THE NORTHCAROLINA SECURITIES DIVISION.

Firm Statement THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE NORTH CAROLINA SECURITIES DIVISION ("DIVISION")ALLEGED THAT THE FIRM'S CONDUCT IN CONNECTION WITH THEMARKETING AND SALE OF ARS TO RETAIL AND OTHER CUSTOMERSVIOLATED NORTH CAROLINA GENERAL STATUTES §§ 78A-39(A)(2)(B), 78A-39(A1)(2)A, 78A-39(A)(2)(G), AND TITLE 18 NORTH CAROLINAADMINISTRATIVE CODE 06.1414(B)(22). WITHOUT ADMITTING OR DENYINGTHE ALLEGATIONS, THE FIRM AGREED TO CEASE AND DESIST FROMVIOLATING THE NORTH CAROLINA SECURITIES ACT, AND TO CERTAINUNDERTAKINGS, INCLUDING OFFERING TO BUY BACK ELIGIBLE ARS FROMCERTAIN INDIVIDUAL INVESTORS. THE FIRM ALSO AGREED TO PAY THEDIVISION A CIVIL PENALTY OF $749,110.85, THIS STATE'S ALLOCATEDPORTION OF THE AMOUNT AGREED TO WITH NASAA. FINALLY, THEDIVISION AND THE FIRM AGREED THAT THE CONSENT ORDER WOULD NOTSUBJECT THE FIRM TO ANY DISQUALIFICATIONS UNDER THE FEDERALSECURITIES LAWS, WHICH WAS ALSO PART OF THE AGREEMENT WITHNASAA.


Settled






THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE NORTH CAROLINA SECURITIES DIVISION ("DIVISION")ALLEGED THAT THE FIRM'S CONDUCT IN CONNECTION WITH THEMARKETING AND SALE OF ARS TO RETAIL AND OTHER CUSTOMERSVIOLATED NORTH CAROLINA GENERAL STATUTES §§ 78A-39(A)(2)(B), 78A-39(A1)(2)A, 78A-39(A)(2)(G), AND TITLE 18 NORTH CAROLINAADMINISTRATIVE CODE 06.1414(B)(22). WITHOUT ADMITTING OR DENYINGTHE ALLEGATIONS, THE FIRM AGREED TO CEASE AND DESIST FROMVIOLATING THE NORTH CAROLINA SECURITIES ACT, AND TO CERTAINUNDERTAKINGS, INCLUDING OFFERING TO BUY BACK ELIGIBLE ARS FROMCERTAIN INDIVIDUAL INVESTORS. THE FIRM ALSO AGREED TO PAY THEDIVISION A CIVIL PENALTY OF $749,110.85, THIS STATE'S ALLOCATEDPORTION OF THE AMOUNT AGREED TO WITH NASAA. FINALLY, THEDIVISION AND THE FIRM AGREED THAT THE CONSENT ORDER WOULD NOTSUBJECT THE FIRM TO ANY DISQUALIFICATIONS UNDER THE FEDERALSECURITIES LAWS, WHICH WAS ALSO PART OF THE AGREEMENT WITHNASAA.


i


Initiated By: MINNESOTA DEPARTMENT OF COMMERCE


Cease and Desist



Docket/Case Number: FILE 13849



Allegations: IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASAA, THE STATE OF MINNESOTA ALLEGED THAT THEFIRM'S AGENTS INACCURATELY DESCRIBED ARS IN VIOLATION OF MINN.STAT. §§ 80A.07 SUBD. 1(7) AND 80A.67(D)(13) AND THE FIRM FAILED TOSUPERVISE THE SALE OF ARS IN VIOLATION OF MINN STAT. §§ 80A.07SUBD. 1(10) AND 80A.67(D)(9).



Resolution:


Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THEORDER, AND CONSENTS TO THE ENTRY OF THE ORDER BY THE STATE OFMINNESOTA DEPARTMENT OF COMMERCE.


Settled






CREDIT SUISSE SECURITIES (USA) LLC NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THEORDER, AND CONSENTS TO THE ENTRY OF THE ORDER BY THE STATE OFMINNESOTA DEPARTMENT OF COMMERCE.

Firm Statement THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE STATE OF MINNESOTA DEPARTMENT OF COMMERCE("DEPARTMENT") ALLEGED THAT THE FIRM'S CONDUCT IN CONNECTIONWITH THE MARKETING AND SALE OF ARS TO RETAIL AND OTHERCUSTOMERS VIOLATED MINNESOTA STAT. §§ 80A.07 SUBD. 1(10), 80A.67(D)(9), 80A.07 SUBD. 1(7) AND 80A.67(D)(13). WITHOUT ADMITTING ORDENYING THE ALLEGATIONS, THE FIRM AGREED TO CEASE AND DESISTFROM VIOLATING MINN. STAT. §§ 80A.67(D)(9) AND (D)(13), TO COMPLYWITH MINN. STAT. CH. 80A, AND TO CERTAIN UNDERTAKINGS, INCLUDINGOFFERING TO BUY BACK ELIGIBLE ARS FROM CERTAIN INDIVIDUALINVESTORS. THE FIRM ALSO AGREED TO PAY THE DEPARTMENT A CIVILPENALTY OF $290,901.47, THIS STATE'S ALLOCATED PORTION OF THEAMOUNT AGREED TO WITH NASAA. FINALLY, THE DEPARTMENT AND THEFIRM AGREED THAT THE CONSENT ORDER WOULD NOT SUBJECT THEFIRM TO ANY DISQUALIFICATIONS UNDER THE FEDERAL SECURITIESLAWS, WHICH WAS ALSO PART OF THE AGREEMENT WITH NASAA.


i


Initiated By: INDIANA SECRETARY OF STATE SECURITIES DIVISION


Cease and Desist


Docket/Case Number: CAUSE NO. 09-0202 CO



Allegations: IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASAA, THE STATE OF INDIANA ALLEGED THAT THEFIRM'S AGENTS INACCURATELY DESCRIBED ARS IN VIOLATION OF § 23-19-4-12(D)(13) OF THE INDIANA UNIFORM SECURITIES ACT ("ACT") AND THEFIRM FAILED TO SUPERVISE THE SALE OF ARS IN VIOLATION OF § 23-19-4-12(D)(9) OF THE ACT.








Cease and Desist



Resolution:


Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THEORDER, AND CONSENTS TO THE ENTRY OF THE ORDER BY THE INDIANASECRETARY OF STATE SECURITIES DIVISION.

Firm Statement THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE INDIANA SECRETARY OF STATE SECURITIES DIVISION("DIVISION") ALLEGED THAT THE FIRM'S CONDUCT IN CONNECTION WITHTHE MARKETING AND SALE OF ARS TO RETAIL AND OTHER CUSTOMERSVIOLATED INDIANA UNIFORM SECURITIES ACT §§ 23-19-4-12(D)(9) AND(D)(13). WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRMAGREED TO CEASE AND DESIST FROM VIOLATING THE INDIANA UNIFORMSECURITIES ACT, AND TO CERTAIN UNDERTAKINGS, INCLUDING OFFERINGTO BUY BACK ELIGIBLE ARS FROM CERTAIN INDIVIDUAL INVESTORS. THEFIRM ALSO AGREED TO PAY THE DIVISION A CIVIL PENALTY OF $38,765.10,THIS STATE'S ALLOCATED PORTION OF THE AMOUNT AGREED TO WITHNASAA. FINALLY, THE DIVISION AND THE FIRM AGREED THAT THECONSENT ORDER WOULD NOT SUBJECT THE FIRM TO ANYDISQUALIFICATIONS UNDER THE FEDERAL SECURITIES LAWS, WHICH WASALSO PART OF THE AGREEMENT WITH NASAA.


Settled


i


Allegations: IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASAA, THE STATE OF VIRGINIA ALLEGED THAT THEFIRM'S AGENTS INACCURATELY DESCRIBED ARS IN VIOLATION OF § 13.1-506 7 OF THE VIRGINIA SECURITIES ACT ("ACT") AND 5-20-280 A 3 AND E 12OF TITLE 21 OF THE VIRGINIA ADMINISTRATIVE CODE ("CODE") AND THEFIRM FAILED TO SUPERVISE THE SALE OF ARS IN VIOLATION OF 5-20-260 AAND B OF TITLE 21 OF THE CODE.







Initiated By: VIRGINIA STATE CORPORATION COMMISSION


Cease and Desist



Docket/Case Number: CASE NO. SEC-2009-00109



IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASAA, THE STATE OF VIRGINIA ALLEGED THAT THEFIRM'S AGENTS INACCURATELY DESCRIBED ARS IN VIOLATION OF § 13.1-506 7 OF THE VIRGINIA SECURITIES ACT ("ACT") AND 5-20-280 A 3 AND E 12OF TITLE 21 OF THE VIRGINIA ADMINISTRATIVE CODE ("CODE") AND THEFIRM FAILED TO SUPERVISE THE SALE OF ARS IN VIOLATION OF 5-20-260 AAND B OF TITLE 21 OF THE CODE.


Resolution:


Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THEORDER, AND CONSENTS TO THE ENTRY OF THE ORDER BY THE VIRGINIASTATE CORPORATION COMMISSION.

Firm Statement THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE VIRGINIA STATE CORPORATION COMMISSION("COMMISSION") ALLEGED THAT THE FIRM'S CONDUCT IN CONNECTIONWITH THE MARKETING AND SALE OF ARS TO RETAIL AND OTHERCUSTOMERS VIOLATED VIRGINIA SECURITIES ACT § 13.1-506 7 ANDVIRGINIA ADMINISTRATIVE CODE 5-20-280 A 3, 5-20-280 E 12, 5-20-260 A AND5-20-260 B. WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THEFIRM AGREED TO CEASE AND DESIST FROM VIOLATING THE VIRGINIASECURITIES ACT, AND TO CERTAIN UNDERTAKINGS, INCLUDING OFFERINGTO BUY BACK ELIGIBLE ARS FROM CERTAIN INDIVIDUAL INVESTORS. THEFIRM ALSO AGREED TO PAY THE COMMISSION A CIVIL PENALTY OF$68,696.97, THIS STATE'S ALLOCATED PORTION OF THE AMOUNT AGREEDTO WITH NASAA. FINALLY, THE COMMISSION AND THE FIRM AGREED THATTHE CONSENT ORDER WOULD NOT SUBJECT THE FIRM TO ANYDISQUALIFICATIONS UNDER THE FEDERAL SECURITIES LAWS, WHICH WASALSO PART OF THE AGREEMENT WITH NASAA.


Settled






THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE VIRGINIA STATE CORPORATION COMMISSION("COMMISSION") ALLEGED THAT THE FIRM'S CONDUCT IN CONNECTIONWITH THE MARKETING AND SALE OF ARS TO RETAIL AND OTHERCUSTOMERS VIOLATED VIRGINIA SECURITIES ACT § 13.1-506 7 ANDVIRGINIA ADMINISTRATIVE CODE 5-20-280 A 3, 5-20-280 E 12, 5-20-260 A AND5-20-260 B. WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THEFIRM AGREED TO CEASE AND DESIST FROM VIOLATING THE VIRGINIASECURITIES ACT, AND TO CERTAIN UNDERTAKINGS, INCLUDING OFFERINGTO BUY BACK ELIGIBLE ARS FROM CERTAIN INDIVIDUAL INVESTORS. THEFIRM ALSO AGREED TO PAY THE COMMISSION A CIVIL PENALTY OF$68,696.97, THIS STATE'S ALLOCATED PORTION OF THE AMOUNT AGREEDTO WITH NASAA. FINALLY, THE COMMISSION AND THE FIRM AGREED THATTHE CONSENT ORDER WOULD NOT SUBJECT THE FIRM TO ANYDISQUALIFICATIONS UNDER THE FEDERAL SECURITIES LAWS, WHICH WASALSO PART OF THE AGREEMENT WITH NASAA.


i


Initiated By: STATE OF VERMONT DEPARTMENT OF BANKING, INSURANCE, SECURITIESAND HEALTHCARE


Cease and Desist



Docket/Case Number: DOCKET NO. 09-108-S



Allegations: IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASAA, THE STATE OF VERMONT ALLEGED THAT THEFIRM'S AGENTS INACCURATELY DESCRIBED ARS IN VIOLATION OF §5412(D)(13) OF TITLE 9 OF THE VERMONT SECURITIES ACT ("ACT") ANDTHE FIRM FAILED TO SUPERVISE THE SALE OF ARS IN VIOLATION OF §5412(D)(9) OF TITLE 9 OF THE ACT.



Resolution:


Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THEORDER, AND CONSENTS TO THE ENTRY OF THE ORDER BY THE VERMONTDEPARTMENT OF BANKING, INSURANCE, SECURITIES AND HEALTHCAREADMINISTRATION.

Firm Statement THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE VERMONT DEPARTMENT OF BANKING, INSURANCE,SECURITIES AND HEALTHCARE ADMINISTRATION ("DEPARTMENT")ALLEGED THAT THE FIRM'S CONDUCT IN CONNECTION WITH THEMARKETING AND SALE OF ARS TO RETAIL AND OTHER CUSTOMERSVIOLATED 9 V.S.A. §§ 5412(D)(9) AND 5412(D)(13). WITHOUT ADMITTING ORDENYING THE ALLEGATIONS, THE FIRM AGREED TO CEASE AND DESISTFROM VIOLATING THE VERMONT UNIFORM SECURITIES ACT, AND TOCERTAIN UNDERTAKINGS, INCLUDING OFFERING TO BUY BACK ELIGIBLEARS FROM CERTAIN INDIVIDUAL INVESTORS. THE FIRM ALSO AGREED TOPAY THE DEPARTMENT A CIVIL PENALTY OF $36,806.94, THIS STATE'SALLOCATED PORTION OF THE AMOUNT AGREED TO WITH NASAA. FINALLY,THE DEPARTMENT AND THE FIRM AGREED THAT THE CONSENT ORDERWOULD NOT SUBJECT THE FIRM TO ANY DISQUALIFICATIONS UNDER THEFEDERAL SECURITIES LAWS, WHICH WAS ALSO PART OF THE AGREEMENTWITH NASAA.


Settled






Firm Statement THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE VERMONT DEPARTMENT OF BANKING, INSURANCE,SECURITIES AND HEALTHCARE ADMINISTRATION ("DEPARTMENT")ALLEGED THAT THE FIRM'S CONDUCT IN CONNECTION WITH THEMARKETING AND SALE OF ARS TO RETAIL AND OTHER CUSTOMERSVIOLATED 9 V.S.A. §§ 5412(D)(9) AND 5412(D)(13). WITHOUT ADMITTING ORDENYING THE ALLEGATIONS, THE FIRM AGREED TO CEASE AND DESISTFROM VIOLATING THE VERMONT UNIFORM SECURITIES ACT, AND TOCERTAIN UNDERTAKINGS, INCLUDING OFFERING TO BUY BACK ELIGIBLEARS FROM CERTAIN INDIVIDUAL INVESTORS. THE FIRM ALSO AGREED TOPAY THE DEPARTMENT A CIVIL PENALTY OF $36,806.94, THIS STATE'SALLOCATED PORTION OF THE AMOUNT AGREED TO WITH NASAA. FINALLY,THE DEPARTMENT AND THE FIRM AGREED THAT THE CONSENT ORDERWOULD NOT SUBJECT THE FIRM TO ANY DISQUALIFICATIONS UNDER THEFEDERAL SECURITIES LAWS, WHICH WAS ALSO PART OF THE AGREEMENTWITH NASAA.


i


Initiated By: SOUTH DAKOTA SECURITIES DIVISION


Cease and Desist



Docket/Case Number:



Allegations: IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASAA, THE STATE OF SOUTH DAKOTA ALLEGED THATTHE FIRM'S AGENTS INACCURATELY DESCRIBED ARS IN VIOLATION OF 47-31B-412(D)(13) OF THE SOUTH DAKOTA CODIFIED LAWS ("LAWS") AND THEFIRM FAILED TO SUPERVISE THE SALE OF ARS IN VIOLATION OF 47-31B-412(D)(9) OF THE LAWS.









Resolution:


Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THEORDER, AND CONSENTS TO THE ENTRY OF THE ORDER BY THE SOUTHDAKOTA DIVISION OF SECURITIES.

Firm Statement THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE SOUTH DAKOTA DIVISION OF SECURITIES("DIVISION") ALLEGED THAT THE FIRM'S CONDUCT IN CONNECTION WITHTHE MARKETING AND SALE OF ARS TO RETAIL AND OTHER CUSTOMERSVIOLATED SOUTH DAKOTA CODIFIED LAWS 47-31B-412(D)(13) AND 47-31B-412(D)(9). WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRMAGREED TO CEASE AND DESIST FROM VIOLATING THE UNIFORMSECURITIES ACT OF 2002, AND TO CERTAIN UNDERTAKINGS, INCLUDINGOFFERING TO BUY BACK ELIGIBLE ARS FROM CERTAIN INDIVIDUALINVESTORS. THE FIRM ALSO AGREED TO PAY THE DIVISION A CIVILPENALTY OF $30,000.00, THIS STATE'S ALLOCATED PORTION OF THEAMOUNT AGREED TO WITH NASAA. FINALLY, THE DIVISION AND THE FIRMAGREED THAT THE CONSENT ORDER WOULD NOT SUBJECT THE FIRM TOANY DISQUALIFICATIONS UNDER THE FEDERAL SECURITIES LAWS, WHICHWAS ALSO PART OF THE AGREEMENT WITH NASAA.


Settled


i


Allegations: IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASAA, THE STATE OF RHODE ISLAND ALLEGED THATTHE FIRM'S AGENTS INACCURATELY DESCRIBED ARS IN VIOLATION OF § 7-11-212(8) OF THE RHODE ISLAND UNIFORM SECURITIES ACT ("ACT") ANDTHE FIRM FAILED TO SUPERVISE THE SALE OF ARS IN VIOLATION OF § 7-11-212(11) OF THE ACT.







Initiated By: SECURITIES DIVISION OF THE RHODE ISLAND DEPARTMENT OF BUSINESSREGULATION


Cease and Desist






IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASAA, THE STATE OF RHODE ISLAND ALLEGED THATTHE FIRM'S AGENTS INACCURATELY DESCRIBED ARS IN VIOLATION OF § 7-11-212(8) OF THE RHODE ISLAND UNIFORM SECURITIES ACT ("ACT") ANDTHE FIRM FAILED TO SUPERVISE THE SALE OF ARS IN VIOLATION OF § 7-11-212(11) OF THE ACT.


Resolution:


Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THEORDER, AND CONSENTS TO THE ENTRY OF THE ORDER BY THESECURITIES DIVISION OF THE RHODE ISLAND DEPARTMENT OF BUSINESSREGULATION.

Firm Statement THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE SECURITIES DIVISION OF THE RHODE ISLANDDEPARTMENT OF BUSINESS REGULATION ("DEPARTMENT") ALLEGED THATTHE FIRM'S CONDUCT IN CONNECTION WITH THE MARKETING AND SALEOF ARS TO RETAIL AND OTHER CUSTOMERS VIOLATED RHODE ISLANDUNIFORM SECURITIES ACT §§7-11-212(11) AND 7-11-212(8). WITHOUTADMITTING OR DENYING THE ALLEGATIONS, THE FIRM AGREED TO CEASEAND DESIST FROM VIOLATING THE RHODE ISLAND UNIFORM SECURITIESACT, AND TO CERTAIN UNDERTAKINGS, INCLUDING OFFERING TO BUYBACK ELIGIBLE ARS FROM CERTAIN INDIVIDUAL INVESTORS. THE FIRMALSO AGREED TO PAY THE DEPARTMENT A CIVIL PENALTY OF $30,839.21,THIS STATE'S ALLOCATED PORTION OF THE AMOUNT AGREED TO WITHNASAA. FINALLY, THE DEPARTMENT AND THE FIRM AGREED THAT THECONSENT ORDER WOULD NOT SUBJECT THE FIRM TO ANYDISQUALIFICATIONS UNDER THE FEDERAL SECURITIES LAWS, WHICH WASALSO PART OF THE AGREEMENT WITH NASAA.


Settled






THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE SECURITIES DIVISION OF THE RHODE ISLANDDEPARTMENT OF BUSINESS REGULATION ("DEPARTMENT") ALLEGED THATTHE FIRM'S CONDUCT IN CONNECTION WITH THE MARKETING AND SALEOF ARS TO RETAIL AND OTHER CUSTOMERS VIOLATED RHODE ISLANDUNIFORM SECURITIES ACT §§7-11-212(11) AND 7-11-212(8). WITHOUTADMITTING OR DENYING THE ALLEGATIONS, THE FIRM AGREED TO CEASEAND DESIST FROM VIOLATING THE RHODE ISLAND UNIFORM SECURITIESACT, AND TO CERTAIN UNDERTAKINGS, INCLUDING OFFERING TO BUYBACK ELIGIBLE ARS FROM CERTAIN INDIVIDUAL INVESTORS. THE FIRMALSO AGREED TO PAY THE DEPARTMENT A CIVIL PENALTY OF $30,839.21,THIS STATE'S ALLOCATED PORTION OF THE AMOUNT AGREED TO WITHNASAA. FINALLY, THE DEPARTMENT AND THE FIRM AGREED THAT THECONSENT ORDER WOULD NOT SUBJECT THE FIRM TO ANYDISQUALIFICATIONS UNDER THE FEDERAL SECURITIES LAWS, WHICH WASALSO PART OF THE AGREEMENT WITH NASAA.


i


Initiated By: OFFICE OF THE COMMISSIONER OF FINANCIAL INSTITUTIONS OF PUERTORICO


Cease and Desist



Docket/Case Number: MATTER NO. C-09-V-009



Allegations: IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASAA, THE COMMONWEALTH OF PUERTO RICOALLEGED THAT THE FIRM'S AGENTS INACCURATELY DESCRIBED ARS INVIOLATION OF ARTICLE 204(A)(2)(G) OF THE PUERTO RICO UNIFORMSECURITIES ACT ("ACT") AND THE FIRM FAILED TO SUPERVISE THE SALEOF ARS IN VIOLATION OF ARTICLE 204(A)(2)(J) OF THE ACT.



Resolution:


Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THEORDER, AND CONSENTS TO THE ENTRY OF THE ORDER BY THE OFFICEOF THE COMMISSIONER OF FINANCIAL INSTITUTIONS OF PUERTO RICO.

Firm Statement THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE OFFICE OF THE COMMISSIONER OF FINANCIALINSTITUTIONS OF PUERTO RICO ("COMMISSIONER") ALLEGED THAT THEFIRM'S CONDUCT IN CONNECTION WITH THE MARKETING AND SALE OFARS TO RETAIL AND OTHER CUSTOMERS VIOLATED PUERTO RICOUNIFORM SECURITIES ACT ARTICLES 204(A)(2)(G) AND 204(A)(2)(J).WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRM AGREEDTO CEASE AND DESIST FROM VIOLATING THE PUERTO RICO UNIFORMSECURITIES ACT AND THE PUERTO RICO UNIFORM SECURITIES ACTREGULATION, AND TO CERTAIN UNDERTAKINGS, INCLUDING OFFERING TOBUY BACK ELIGIBLE ARS FROM CERTAIN INDIVIDUAL INVESTORS. THEFIRM ALSO AGREED TO PAY THE COMMISSIONER A CIVIL PENALTY OF$30,000.00, THIS STATE'S ALLOCATED PORTION OF THE AMOUNT AGREEDTO WITH NASAA. FINALLY, THE COMMISSIONER AND THE FIRM AGREEDTHAT THE CONSENT ORDER WOULD NOT SUBJECT THE FIRM TO ANYDISQUALIFICATIONS UNDER THE FEDERAL SECURITIES LAWS, WHICH WASALSO PART OF THE AGREEMENT WITH NASAA.


Settled






THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE OFFICE OF THE COMMISSIONER OF FINANCIALINSTITUTIONS OF PUERTO RICO ("COMMISSIONER") ALLEGED THAT THEFIRM'S CONDUCT IN CONNECTION WITH THE MARKETING AND SALE OFARS TO RETAIL AND OTHER CUSTOMERS VIOLATED PUERTO RICOUNIFORM SECURITIES ACT ARTICLES 204(A)(2)(G) AND 204(A)(2)(J).WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRM AGREEDTO CEASE AND DESIST FROM VIOLATING THE PUERTO RICO UNIFORMSECURITIES ACT AND THE PUERTO RICO UNIFORM SECURITIES ACTREGULATION, AND TO CERTAIN UNDERTAKINGS, INCLUDING OFFERING TOBUY BACK ELIGIBLE ARS FROM CERTAIN INDIVIDUAL INVESTORS. THEFIRM ALSO AGREED TO PAY THE COMMISSIONER A CIVIL PENALTY OF$30,000.00, THIS STATE'S ALLOCATED PORTION OF THE AMOUNT AGREEDTO WITH NASAA. FINALLY, THE COMMISSIONER AND THE FIRM AGREEDTHAT THE CONSENT ORDER WOULD NOT SUBJECT THE FIRM TO ANYDISQUALIFICATIONS UNDER THE FEDERAL SECURITIES LAWS, WHICH WASALSO PART OF THE AGREEMENT WITH NASAA.


i


Initiated By: NORTH DAKOTA SECURITIES DEPARTMENT


Cease and Desist



Docket/Case Number:



Allegations: IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASAA, THE STATE OF NORTH DAKOTA ALLEGED THATTHE FIRM'S AGENTS INACCURATELY DESCRIBED ARS IN VIOLATION OF §10-04-11(1)(C) OF THE NORTH DAKOTA SECURITIES ACT ("ACT") AND THEFIRM FAILED TO SUPERVISE THE SALE OF ARS IN VIOLATION OF § 10-04-11(1)(M) OF THE ACT.








Resolution:


Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THEORDER, AND CONSENTS TO THE ENTRY OF THE ORDER BY THE NORTHDAKOTA SECURITIES DEPARTMENT.

Firm Statement THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE NORTH DAKOTA SECURITIES DEPARTMENT("DEPARTMENT") ALLEGED THAT THE FIRM'S CONDUCT IN CONNECTIONWITH THE MARKETING AND SALE OF ARS TO RETAIL AND OTHERCUSTOMERS VIOLATED NORTH DAKOTA CENTURY CODE §§ 10-04-11(1)(M)AND 10-04-11(1)(C). WITHOUT ADMITTING OR DENYING THE ALLEGATIONS,THE FIRM AGREED TO CEASE AND DESIST FROM VIOLATING THE NORTHDAKOTA SECURITIES ACT, AND TO CERTAIN UNDERTAKINGS, INCLUDINGOFFERING TO BUY BACK ELIGIBLE ARS FROM CERTAIN INDIVIDUALINVESTORS. THE FIRM ALSO AGREED TO PAY THE DEPARTMENT A CIVILPENALTY OF $30,000.00, THIS STATE'S ALLOCATED PORTION OF THEAMOUNT AGREED TO WITH NASAA. FINALLY, THE DIVISION AND THE FIRMAGREED THAT THE CONSENT ORDER WOULD NOT SUBJECT THE FIRM TOANY DISQUALIFICATIONS UNDER THE FEDERAL SECURITIES LAWS, WHICHWAS ALSO PART OF THE AGREEMENT WITH NASAA.


Settled


i


Initiated By: NEW MEXICO SECURITIES DIVISION

Allegations: IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASAA, THE STATE OF NEW MEXICO ALLEGED THATTHE FIRM'S AGENTS INACCURATELY DESCRIBED ARS IN VIOLATION OF §58-13B-16A(2)(H) AND (K) OF THE NEW MEXICO SECURITIES ACT ("ACT")AND THE FIRM FAILED TO SUPERVISE THE SALE OF ARS IN VIOLATION OF§ 58-13B-16.A(2)(K) OF THE ACT.









Cease and Desist



Docket/Case Number: ORDER NO. 09-09-054-060




Resolution:


Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THEORDER, AND CONSENTS TO THE ENTRY OF THE ORDER BY THE NEWMEXICO SECURITIES DIVISION.

Firm Statement THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE NEW MEXICO SECURITIES DIVISION ("DIVISION")ALLEGED THAT THE FIRM'S CONDUCT IN CONNECTION WITH THEMARKETING AND SALE OF ARS TO RETAIL AND OTHER CUSTOMERSVIOLATED NEW MEXICO SECURITIES ACT §§ 58-13B-16.A(2)(K) AND 58-13B-16A(2)(H). WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRMAGREED TO CEASE AND DESIST FROM VIOLATING THE NEW MEXICOSECURITIES ACT, AND TO CERTAIN UNDERTAKINGS, INCLUDING OFFERINGTO BUY BACK ELIGIBLE ARS FROM CERTAIN INDIVIDUAL INVESTORS. THEFIRM ALSO AGREED TO PAY THE DIVISION A CIVIL PENALTY OF $27,069.04,THIS STATE'S ALLOCATED PORTION OF THE AMOUNT AGREED TO WITHNASAA. FINALLY, THE DIVISION AND THE FIRM AGREED THAT THECONSENT ORDER WOULD NOT SUBJECT THE FIRM TO ANYDISQUALIFICATIONS UNDER THE FEDERAL SECURITIES LAWS, WHICH WASALSO PART OF THE AGREEMENT WITH NASAA.


Settled







i


Initiated By: SECURITIES DIVISION OF THE NEVADA SECRETARY OF STATE


Cease and Desist



Docket/Case Number: I09-313



Allegations: IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASAA, THE STATE OF NEVADA ALLEGED THAT THEFIRM'S AGENTS INACCURATELY DESCRIBED ARS IN VIOLATION OF 90.420(1)(H) OF THE NEVADA SECURITIES ACT ("ACT") AND THE FIRM FAILEDTO SUPERVISE THE SALE OF ARS IN VIOLATION OF 90.420(1)(L) OF THEACT.



Resolution:


Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THEORDER, AND CONSENTS TO THE ENTRY OF THE ORDER BY THESECURITIES DIVISION OF THE NEVADA SECRETARY OF STATE.

Firm Statement THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE SECURITIES DIVISION OF THE NEVADA SECRETARYOF STATE ("DIVISION") ALLEGED THAT THE FIRM'S CONDUCT INCONNECTION WITH THE MARKETING AND SALE OF ARS TO RETAIL ANDOTHER CUSTOMERS VIOLATED NEVADA REVISED STATUTES 90.420(1)(H)AND 90.420(1)(L). WITHOUT ADMITTING OR DENYING THE ALLEGATIONS,THE FIRM AGREED TO CEASE AND DESIST FROM VIOLATING THE NEVADASECURITIES ACT, AND TO CERTAIN UNDERTAKINGS, INCLUDING OFFERINGTO BUY BACK ELIGIBLE ARS FROM CERTAIN INDIVIDUAL INVESTORS. THEFIRM ALSO AGREED TO PAY THE DIVISION A CIVIL PENALTY OF $66,832.05,THIS STATE'S ALLOCATED PORTION OF THE AMOUNT AGREED TO WITHNASAA. FINALLY, THE DIVISION AND THE FIRM AGREED THAT THECONSENT ORDER WOULD NOT SUBJECT THE FIRM TO ANYDISQUALIFICATIONS UNDER THE FEDERAL SECURITIES LAWS, WHICH WASALSO PART OF THE AGREEMENT WITH NASAA.


Settled






THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE SECURITIES DIVISION OF THE NEVADA SECRETARYOF STATE ("DIVISION") ALLEGED THAT THE FIRM'S CONDUCT INCONNECTION WITH THE MARKETING AND SALE OF ARS TO RETAIL ANDOTHER CUSTOMERS VIOLATED NEVADA REVISED STATUTES 90.420(1)(H)AND 90.420(1)(L). WITHOUT ADMITTING OR DENYING THE ALLEGATIONS,THE FIRM AGREED TO CEASE AND DESIST FROM VIOLATING THE NEVADASECURITIES ACT, AND TO CERTAIN UNDERTAKINGS, INCLUDING OFFERINGTO BUY BACK ELIGIBLE ARS FROM CERTAIN INDIVIDUAL INVESTORS. THEFIRM ALSO AGREED TO PAY THE DIVISION A CIVIL PENALTY OF $66,832.05,THIS STATE'S ALLOCATED PORTION OF THE AMOUNT AGREED TO WITHNASAA. FINALLY, THE DIVISION AND THE FIRM AGREED THAT THECONSENT ORDER WOULD NOT SUBJECT THE FIRM TO ANYDISQUALIFICATIONS UNDER THE FEDERAL SECURITIES LAWS, WHICH WASALSO PART OF THE AGREEMENT WITH NASAA.


i


Initiated By: MONTANA SECURITIES DIVISION


Cease and Desist



Docket/Case Number: CASE NO. SEC-2009-59



Allegations: IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASAA, THE STATE OF MONTANA ALLEGED THAT THEFIRM'S AGENTS INACCURATELY DESCRIBED ARS IN VIOLATION OF § 30-10-201(13)(G) OF THE MONTANA CODE ANNOTATED ("CODE") AND THE FIRMFAILED TO SUPERVISE THE SALE OF ARS IN VIOLATION OF § 30-10-201(13)(K) OF THE LAWS.



Resolution:


Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THEORDER, AND CONSENTS TO THE ENTRY OF THE ORDER BY THE MONTANASECURITIES DEPARTMENT.


Settled






Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THEORDER, AND CONSENTS TO THE ENTRY OF THE ORDER BY THE MONTANASECURITIES DEPARTMENT.

Firm Statement THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE MONTANA SECURITIES DEPARTMENT("DEPARTMENT") ALLEGED THAT THE FIRM'S CONDUCT IN CONNECTIONWITH THE MARKETING AND SALE OF ARS TO RETAIL AND OTHERCUSTOMERS VIOLATED MONTANA CODE ANNOTATED §§ 30-10-201(13)(G)AND 30-10-201(13)(K). WITHOUT ADMITTING OR DENYING THEALLEGATIONS, THE FIRM AGREED TO CEASE AND DESIST FROMVIOLATING THE SECURITIES ACT OF MONTANA, AND TO CERTAINUNDERTAKINGS, INCLUDING OFFERING TO BUY BACK ELIGIBLE ARS FROMCERTAIN INDIVIDUAL INVESTORS. THE FIRM ALSO AGREED TO PAY THEDEPARTMENT A CIVIL PENALTY OF $30,000.00, THIS STATE'S ALLOCATEDPORTION OF THE AMOUNT AGREED TO WITH NASAA. FINALLY, THEDEPARTMENT AND THE FIRM AGREED THAT THE CONSENT ORDER WOULDNOT SUBJECT THE FIRM TO ANY DISQUALIFICATIONS UNDER THEFEDERAL SECURITIES LAWS, WHICH WAS ALSO PART OF THE AGREEMENTWITH NASAA.


i


Initiated By: MISSOURI COMMISSIONER OF SECURITIES


Docket/Case Number: AP-09-38



Allegations: IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASAA, THE STATE OF MISSOURI ALLEGED THAT THEFIRM'S AGENTS INACCURATELY DESCRIBED ARS IN VIOLATION OF § 409.4-412(D)(13) OF THE MISSOURI REVISED STATUTES ("STATUTES") AND THEFIRM FAILED TO SUPERVISE THE SALE OF ARS IN VIOLATION OF § 409.4-412(D)(9) OF THE STATUTES.








Cease and Desist




Resolution:


Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THEORDER, AND CONSENTS TO THE ENTRY OF THE ORDER BY THE MISSOURICOMMISSIONER OF SECURITIES.

Firm Statement THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE MISSOURI COMMISSIONER OF SECURITIES("COMMISSIONER") ALLEGED THAT THE FIRM'S CONDUCT IN CONNECTIONWITH THE MARKETING AND SALE OF ARS TO RETAIL AND OTHERCUSTOMERS VIOLATED MISSOURI REVISED STATUTES §§ 409.4-412(D)(9)AND 409.4-412(D)(13). WITHOUT ADMITTING OR DENYING THEALLEGATIONS, THE FIRM AGREED TO CEASE AND DESIST FROMVIOLATING THE MISSOURI SECURITIES ACT OF 2003, AND TO CERTAINUNDERTAKINGS, INCLUDING OFFERING TO BUY BACK ELIGIBLE ARS FROMCERTAIN INDIVIDUAL INVESTORS. THE FIRM ALSO AGREED TO PAY THECOMMISSIONER A CIVIL PENALTY OF $51,278.67, THIS STATE'S ALLOCATEDPORTION OF THE AMOUNT AGREED TO WITH NASAA. FINALLY, THECOMMISSIONER AND THE FIRM AGREED THAT THE CONSENT ORDERWOULD NOT SUBJECT THE FIRM TO ANY DISQUALIFICATIONS UNDER THEFEDERAL SECURITIES LAWS, WHICH WAS ALSO PART OF THE AGREEMENTWITH NASAA.


Settled


i


Allegations: IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASAA, THE STATE OF KENTUCKY ALLEGED THAT THEFIRM'S AGENTS INACCURATELY DESCRIBED ARS IN VIOLATION OF 292.330(13)(A)(7) OF THE KENTUCKY REVISED STATUTES ("STATUTES") ANDTHE FIRM FAILED TO SUPERVISE THE SALE OF ARS IN VIOLATION OF292.330(13)(A)(9)(A) OF THE STATUTES.







Initiated By: KENTUCKY DEPARTMENT OF FINANCIAL INSTITUTIONS


Cease and Desist



Docket/Case Number: AGENCY ACTION NO. 2009-AH-97



Allegations: IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASAA, THE STATE OF KENTUCKY ALLEGED THAT THEFIRM'S AGENTS INACCURATELY DESCRIBED ARS IN VIOLATION OF 292.330(13)(A)(7) OF THE KENTUCKY REVISED STATUTES ("STATUTES") ANDTHE FIRM FAILED TO SUPERVISE THE SALE OF ARS IN VIOLATION OF292.330(13)(A)(9)(A) OF THE STATUTES.


Resolution:


Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THEORDER, AND CONSENTS TO THE ENTRY OF THE ORDER BY THEKENTUCKY DEPARTMENT OF FINANCIAL INSTITUTIONS.

Firm Statement THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE KENTUCKY DEPARTMENT OF FINANCIALINSTITUTIONS ("DEPARTMENT") ALLEGED THAT THE FIRM'S CONDUCT INCONNECTION WITH THE MARKETING AND SALE OF ARS TO RETAIL ANDOTHER CUSTOMERS VIOLATED KENTUCKY REVISED STATUTES 292.330(13)(A)(9)(A) AND 292.330(13)(A)(7). WITHOUT ADMITTING OR DENYINGTHE ALLEGATIONS, THE FIRM AGREED TO CEASE AND DESIST FROMVIOLATING THE KENTUCKY SECURITIES ACT, AND TO CERTAINUNDERTAKINGS, INCLUDING OFFERING TO BUY BACK ELIGIBLE ARS FROMCERTAIN INDIVIDUAL INVESTORS. THE FIRM ALSO AGREED TO PAY THECOMMISSIONER A CIVIL PENALTY OF $34,475.79, THIS STATE'S ALLOCATEDPORTION OF THE AMOUNT AGREED TO WITH NASAA. FINALLY, THECOMMISSIONER AND THE FIRM AGREED THAT THE CONSENT ORDERWOULD NOT SUBJECT THE FIRM TO ANY DISQUALIFICATIONS UNDER THEFEDERAL SECURITIES LAWS, WHICH WAS ALSO PART OF THE AGREEMENTWITH NASAA.


Settled






THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE KENTUCKY DEPARTMENT OF FINANCIALINSTITUTIONS ("DEPARTMENT") ALLEGED THAT THE FIRM'S CONDUCT INCONNECTION WITH THE MARKETING AND SALE OF ARS TO RETAIL ANDOTHER CUSTOMERS VIOLATED KENTUCKY REVISED STATUTES 292.330(13)(A)(9)(A) AND 292.330(13)(A)(7). WITHOUT ADMITTING OR DENYINGTHE ALLEGATIONS, THE FIRM AGREED TO CEASE AND DESIST FROMVIOLATING THE KENTUCKY SECURITIES ACT, AND TO CERTAINUNDERTAKINGS, INCLUDING OFFERING TO BUY BACK ELIGIBLE ARS FROMCERTAIN INDIVIDUAL INVESTORS. THE FIRM ALSO AGREED TO PAY THECOMMISSIONER A CIVIL PENALTY OF $34,475.79, THIS STATE'S ALLOCATEDPORTION OF THE AMOUNT AGREED TO WITH NASAA. FINALLY, THECOMMISSIONER AND THE FIRM AGREED THAT THE CONSENT ORDERWOULD NOT SUBJECT THE FIRM TO ANY DISQUALIFICATIONS UNDER THEFEDERAL SECURITIES LAWS, WHICH WAS ALSO PART OF THE AGREEMENTWITH NASAA.


i


Initiated By: KANSAS SECURITIES COMMISSION


Cease and Desist



Docket/Case Number: 10 E 009



Allegations: IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASAA, THE STATE OF KANSAS ALLEGED THAT THEFIRM'S AGENTS INACCURATELY DESCRIBED ARS IN VIOLATION OF 81-3-6OF THE KANSAS ADMINISTRATIVE REGULATIONS ("REGULATIONS") ANDTHE FIRM FAILED TO SUPERVISE THE SALE OF ARS IN VIOLATION OF 81-3-7(A) OF THE REGULATIONS.



Resolution:


Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THEORDER, AND CONSENTS TO THE ENTRY OF THE ORDER BY THE KANSASSECURITIES COMMISSIONER.

Firm Statement THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE OFFICE OF THE KANSAS SECURITIESCOMMISSIONER ("COMMISSIONER") ALLEGED THAT THE FIRM'S CONDUCTIN CONNECTION WITH THE MARKETING AND SALE OF ARS TO RETAIL ANDOTHER CUSTOMERS VIOLATED KANSAS ADMINISTRATIVE REGULATIONS81-3-7(A) AND 81-3-6. WITHOUT ADMITTING OR DENYING THEALLEGATIONS, THE FIRM AGREED TO CEASE AND DESIST FROMVIOLATING THE KANSAS UNIFORM SECURITIES ACT, AND TO CERTAINUNDERTAKINGS, INCLUDING OFFERING TO BUY BACK ELIGIBLE ARS FROMCERTAIN INDIVIDUAL INVESTORS. THE FIRM ALSO AGREED TO PAY THECOMMISSIONER A CIVIL PENALTY OF $535,857.93, THIS STATE'SALLOCATED PORTION OF THE AMOUNT AGREED TO WITH NASAA. FINALLY,THE COMMISSIONER AND THE FIRM AGREED THAT THE CONSENT ORDERWOULD NOT SUBJECT THE FIRM TO ANY DISQUALIFICATIONS UNDER THEFEDERAL SECURITIES LAWS, WHICH WAS ALSO PART OF THE AGREEMENTWITH NASAA.


Settled






THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE OFFICE OF THE KANSAS SECURITIESCOMMISSIONER ("COMMISSIONER") ALLEGED THAT THE FIRM'S CONDUCTIN CONNECTION WITH THE MARKETING AND SALE OF ARS TO RETAIL ANDOTHER CUSTOMERS VIOLATED KANSAS ADMINISTRATIVE REGULATIONS81-3-7(A) AND 81-3-6. WITHOUT ADMITTING OR DENYING THEALLEGATIONS, THE FIRM AGREED TO CEASE AND DESIST FROMVIOLATING THE KANSAS UNIFORM SECURITIES ACT, AND TO CERTAINUNDERTAKINGS, INCLUDING OFFERING TO BUY BACK ELIGIBLE ARS FROMCERTAIN INDIVIDUAL INVESTORS. THE FIRM ALSO AGREED TO PAY THECOMMISSIONER A CIVIL PENALTY OF $535,857.93, THIS STATE'SALLOCATED PORTION OF THE AMOUNT AGREED TO WITH NASAA. FINALLY,THE COMMISSIONER AND THE FIRM AGREED THAT THE CONSENT ORDERWOULD NOT SUBJECT THE FIRM TO ANY DISQUALIFICATIONS UNDER THEFEDERAL SECURITIES LAWS, WHICH WAS ALSO PART OF THE AGREEMENTWITH NASAA.


i


Initiated By: SECURITIES COMMISSIONER FOR THE STATE OF DELAWARE


Cease and Desist






Allegations: IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASAA, THE STATE OF DELAWARE ALLEGED THAT THEFIRM'S AGENTS INACCURATELY DESCRIBED ARS IN VIOLATION OF §7316(A)(7) OF TITLE 6 OF THE DELAWARE CODE ("CODE") AND THE FIRMFAILED TO SUPERVISE THE SALE OF ARS IN VIOLATION OF § 7316(A)(10) OFTITLE 6 OF THE CODE.








Resolution:


Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THEORDER, AND CONSENTS TO THE ENTRY OF THE ORDER BY THESECURITIES COMMISSIONER FOR THE STATE OF DELAWARE.

Firm Statement THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE SECURITIES COMMISSIONER FOR THE STATE OFDELAWARE ("COMMISSIONER") ALLEGED THAT THE FIRM'S CONDUCT INCONNECTION WITH THE MARKETING AND SALE OF ARS TO RETAIL ANDOTHER CUSTOMERS VIOLATED 6 DELAWARE CODE §§ 7316(A)(10) AND7316(A)(7). WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THEFIRM AGREED TO CEASE AND DESIST FROM VIOLATING THE DELAWARESECURITIES ACT, AND TO CERTAIN UNDERTAKINGS, INCLUDING OFFERINGTO BUY BACK ELIGIBLE ARS FROM CERTAIN INDIVIDUAL INVESTORS. THEFIRM ALSO AGREED TO PAY THE COMMISSIONER A CIVIL PENALTY OF$130,332.37, THIS STATE'S ALLOCATED PORTION OF THE AMOUNT AGREEDTO WITH NASAA. FINALLY, THE COMMISSIONER AND THE FIRM AGREEDTHAT THE CONSENT ORDER WOULD NOT SUBJECT THE FIRM TO ANYDISQUALIFICATIONS UNDER THE FEDERAL SECURITIES LAWS, WHICH WASALSO PART OF THE AGREEMENT WITH NASAA.


Settled


i


Initiated By: CALIFORNIA DEPARTMENT OF CORPORATIONS

Allegations: IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASAA, THE STATE OF CALIFORNIA ALLEGED THAT THEFIRM'S AGENTS INACCURATELY DESCRIBED ARS IN VIOLATION OF§260.218 OF THE CALIFORNIA CODE OF REGULATIONS ("REGULATIONS")AND THE FIRM FAILED TO SUPERVISE THE SALE OF ARS IN VIOLATION OFCORPORATIONS CODE § 25218.4(A) OF THE REGULATIONS.







Initiated By: CALIFORNIA DEPARTMENT OF CORPORATIONS


Cease and Desist



Docket/Case Number:




Resolution:


Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THEORDER, AND CONSENTS TO THE ENTRY OF THE ORDER BY THECALIFORNIA DEPARTMENT OF CORPORATIONS.

Firm Statement THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE CALIFORNIA DEPARTMENT OF CORPORATIONS("DEPARTMENT") ALLEGED THAT THE FIRM'S CONDUCT IN CONNECTIONWITH THE MARKETING AND SALE OF ARS TO RETAIL AND OTHERCUSTOMERS VIOLATED CORPORATIONS CODE § 25218.4(A) AND §260.218OF THE CALIFORNIA CODE OF REGULATIONS. WITHOUT ADMITTING ORDENYING THE ALLEGATIONS, THE FIRM AGREED TO CEASE AND DESISTFROM VIOLATING THE CORPORATE SECURITIES LAW OF 1968, AND TOCERTAIN UNDERTAKINGS, INCLUDING OFFERING TO BUY BACK ELIGIBLEARS FROM CERTAIN INDIVIDUAL INVESTORS. THE FIRM ALSO AGREED TOPAY THE DEPARTMENT A CIVIL PENALTY OF $1,207,954.30, THIS STATE'SALLOCATED PORTION OF THE AMOUNT AGREED TO WITH NASAA. FINALLY,THE DEPARTMENT AND THE FIRM AGREED THAT THE CONSENT ORDERWOULD NOT SUBJECT THE FIRM TO ANY DISQUALIFICATIONS UNDER THEFEDERAL SECURITIES LAWS, WHICH WAS ALSO PART OF THE AGREEMENTWITH NASAA.


Settled






THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE CALIFORNIA DEPARTMENT OF CORPORATIONS("DEPARTMENT") ALLEGED THAT THE FIRM'S CONDUCT IN CONNECTIONWITH THE MARKETING AND SALE OF ARS TO RETAIL AND OTHERCUSTOMERS VIOLATED CORPORATIONS CODE § 25218.4(A) AND §260.218OF THE CALIFORNIA CODE OF REGULATIONS. WITHOUT ADMITTING ORDENYING THE ALLEGATIONS, THE FIRM AGREED TO CEASE AND DESISTFROM VIOLATING THE CORPORATE SECURITIES LAW OF 1968, AND TOCERTAIN UNDERTAKINGS, INCLUDING OFFERING TO BUY BACK ELIGIBLEARS FROM CERTAIN INDIVIDUAL INVESTORS. THE FIRM ALSO AGREED TOPAY THE DEPARTMENT A CIVIL PENALTY OF $1,207,954.30, THIS STATE'SALLOCATED PORTION OF THE AMOUNT AGREED TO WITH NASAA. FINALLY,THE DEPARTMENT AND THE FIRM AGREED THAT THE CONSENT ORDERWOULD NOT SUBJECT THE FIRM TO ANY DISQUALIFICATIONS UNDER THEFEDERAL SECURITIES LAWS, WHICH WAS ALSO PART OF THE AGREEMENTWITH NASAA.


i


Initiated By: ARIZONA CORPORATION COMMISSION


Cease and Desist



Docket/Case Number: S-20699A-09-0404



Allegations: IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASAA, THE STATE OF ARIZONA ALLEGED THAT THEFIRM'S AGENTS INACCURATELY DESCRIBED ARS IN VIOLATION OF § 44-1961(A)(13) OF THE ARIZONA SECURITIES ACT ("ACT") AND THE FIRMFAILED TO SUPERVISE THE SALE OF ARS IN VIOLATION OF § 44-1961(A)(12)OF THE ACT.



Resolution:


Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THEORDER, AND CONSENTS TO THE ENTRY OF THE ORDER BY THE ARIZONACORPORATION COMMISSION.

Firm Statement THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE ARIZONA CORPORATION COMMISSION("COMMISSION") ALLEGED THAT THE FIRM'S CONDUCT IN CONNECTIONWITH THE MARKETING AND SALE OF ARS TO RETAIL AND OTHERCUSTOMERS VIOLATED §§ 44-1961(A)(13) AND 44-1961(A)(12) OF THEARIZONA SECURITIES ACT. WITHOUT ADMITTING OR DENYING THEALLEGATIONS, THE FIRM AGREED TO CEASE AND DESIST FROMVIOLATING THE ARIZONA SECURITIES ACT, AND TO CERTAINUNDERTAKINGS, INCLUDING OFFERING TO BUY BACK ELIGIBLE ARS FROMCERTAIN INDIVIDUAL INVESTORS. THE FIRM ALSO AGREED TO PAY THECOMMISSION A CIVIL PENALTY OF $167,444.16, THIS STATE'S ALLOCATEDPORTION OF THE AMOUNT AGREED TO WITH NASAA. FINALLY, THECOMMISSION AND THE FIRM AGREED THAT THE CONSENT ORDER WOULDNOT SUBJECT THE FIRM TO ANY DISQUALIFICATIONS UNDER THEFEDERAL SECURITIES LAWS, WHICH WAS ALSO PART OF THE AGREEMENTWITH NASAA.


Settled






THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE ARIZONA CORPORATION COMMISSION("COMMISSION") ALLEGED THAT THE FIRM'S CONDUCT IN CONNECTIONWITH THE MARKETING AND SALE OF ARS TO RETAIL AND OTHERCUSTOMERS VIOLATED §§ 44-1961(A)(13) AND 44-1961(A)(12) OF THEARIZONA SECURITIES ACT. WITHOUT ADMITTING OR DENYING THEALLEGATIONS, THE FIRM AGREED TO CEASE AND DESIST FROMVIOLATING THE ARIZONA SECURITIES ACT, AND TO CERTAINUNDERTAKINGS, INCLUDING OFFERING TO BUY BACK ELIGIBLE ARS FROMCERTAIN INDIVIDUAL INVESTORS. THE FIRM ALSO AGREED TO PAY THECOMMISSION A CIVIL PENALTY OF $167,444.16, THIS STATE'S ALLOCATEDPORTION OF THE AMOUNT AGREED TO WITH NASAA. FINALLY, THECOMMISSION AND THE FIRM AGREED THAT THE CONSENT ORDER WOULDNOT SUBJECT THE FIRM TO ANY DISQUALIFICATIONS UNDER THEFEDERAL SECURITIES LAWS, WHICH WAS ALSO PART OF THE AGREEMENTWITH NASAA.


i


Initiated By: ALABAMA SECURITIES COMMISSION


Other


CONSENT ORDER


Docket/Case Number: CO-2010-0002




Allegations: ON 01/07/2010 THE COMMISSION ISSUED CONSENT ORDER NO.CO-2010-0002 TO CREDIT SUISSE SECURITIES LLC FOR FAILURE TO PROPERLYSUPERVISE ITS AGENTS. THIS ACTION STEMMED FROM THE FIRMSINAPPROPRIATE MARKETING OF AUCTION RATE SECURITIES ("ARS") TOCUSTOMERS WITHOUT ADEQUATELY DISCLOSING RISKS OF ILLIQUIDITY.AS A RESULT OF THIS ORDER, THE FIRM WAS FINED AND ORDERED TOPAY PENALTIES OF $32,983.86 AS PARTIAL REIMBURSEMENT OFINVESTIGATIVE COSTS.



Resolution: Consent







Other Sanctions Ordered: CONSENT ORDER

Sanction Details: $32,983.86 INVESTIGATIVE REIMBURSEMENT

Regulator Statement ON 01/07/2010 THE COMMISSION ISSUED CONSENT ORDER NO.CO-2010-0002 TO CREDIT SUISSE SECURITIES LLC FOR FAILURE TO PROPERLYSUPERVISE ITS AGENTS. THIS ACTION STEMMED FROM THE FIRMSINAPPROPRIATE MARKETING OF AUCTION RATE SECURITIES ("ARS") TOCUSTOMERS WITHOUT ADEQUATELY DISCLOSING RISKS OF ILLIQUIDITY.AS A RESULT OF THIS ORDER, THE FIRM WAS FINED AND ORDERED TOPAY PENALTIES OF $32,983.86 AS PARTIAL REIMBURSEMENT OFINVESTIGATIVE COSTS.


No





Cease and Desist



Docket/Case Number: CO-2010-0002



Allegations: IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASAA, THE STATE OF ALABAMA ALLEGED THAT THEFIRM'S AGENTS INACCURATELY DESCRIBED ARS IN VIOLATION OF § 8-6-17(B)(4) OF THE ALABAMA SECURITIES ACT ("ACT") AND THE FIRM FAILEDTO SUPERVISE THE SALE OF ARS IN VIOLATION OF § 8-6-3(J)(10) OF THEACT.


Resolution: Settled








Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THEORDER, AND CONSENTS TO THE ENTRY OF THE ORDER BY THE ALABAMASECURITIES COMMISSION.

Firm Statement THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE ALABAMA SECURITIES COMMISSION ("COMMISSION")ALLEGED THAT THE FIRM'S CONDUCT IN CONNECTION WITH THEMARKETING AND SALE OF ARS TO RETAIL AND OTHER CUSTOMERSVIOLATED §§ 8-6-17(B)(4) AND 8-6-3(J)(10) OF THE ALABAMA SECURITIESACT. WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRMAGREED TO CEASE AND DESIST FROM VIOLATING THE ALABAMASECURITIES ACT, AND TO CERTAIN UNDERTAKINGS, INCLUDING OFFERINGTO BUY BACK ELIGIBLE ARS FROM CERTAIN INDIVIDUAL INVESTORS. THEFIRM ALSO AGREED TO PAY THE COMMISSION A CIVIL PENALTY OF$32,983.86, THIS STATE'S ALLOCATED PORTION OF THE AMOUNT AGREEDTO WITH NASAA. FINALLY, THE COMMISSION AND THE FIRM AGREED THATTHE CONSENT ORDER WOULD NOT SUBJECT THE FIRM TO ANYDISQUALIFICATIONS UNDER THE FEDERAL SECURITIES LAWS, WHICH WASALSO PART OF THE AGREEMENT WITH NASAA.



i


Initiated By: ATTORNEY GENERAL OF THE STATE OF NEW YORK INVESTORPROTECTION BUREAU


Allegations: IN CONNECTION WITH THE COORDINATED INVESTIGATIONS BY A MULTI-STATE TASK FORCE WITH NASAA, THE STATE OF NEW YORK ALLEGEDTHAT THE FIRM'S AGENTS INACCURATELY DESCRIBED ARS IN VIOLATTIONOF THE ARTICLE23-A OF THE GENERAL BUSINESS LAW, §349 OF THEGENERAL BUSINESS LAW, AND §63(12) OF THE EXECUTIVE LAW.








Cease and Desist



Docket/Case Number: AOD # 08-183




Resolution:


Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THEASSURANCE OF DISCONTINUANCE, AND CONSENTS TO THE ENTRY OFTHE ASSURANCE BY THE ATTORNEY GENERAL OF THE STATE OF NEWYORK INVESTOR PROTECTION BUREAU.

Firm Statement THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE ATTORNEY GENERAL OF THE STATE OF NEW YORKINVESTOR PROTECTION BUREAU ("NYAG") ALLEGED THAT THE FIRM'SCONDUCT IN CONNECTION WITH THE MARKETING AND SALE OF ARS TORETAIL AND OTHER CUSTOMERS VIOLATED ARTICLE 23-A OF THEGENERAL BUSINESS LAW ("MARTIN ACT"), §349 OF THE GENERALBUSINESS LAW, AND §63(12) OF THE EXECUTIVE LAW. WITHOUTADMITTING OR DENYING THE ALLEGATIONS, THE FIRM AGREED TO CEASEAND DESIST FROM VIOLATING THE MARTIN ACT, GENERAL BUSINESS LAW§ 349 AND/OR EXECUTIVE LAW § 63(12), AND TO CERTAIN UNDERTAKINGS,INCLUDING OFFERING TO BUY BACK ELIGIBLE ARS FROM CERTAININDIVIDUAL INVESTORS. THE FIRM ALSO AGREED TO PAY THE NYAG ACIVIL PENALTY OF $1,603,595.81, THIS STATE'S ALLOCATED PORTION OFTHE AMOUNT AGREED TO WITH NASAA. FINALLY, THE NYAG AND THE FIRMAGREED THAT THE CONSENT ORDER WOULD NOT SUBJECT THE FIRM TOANY DISQUALIFICATIONS UNDER THE FEDERAL SECURITIES LAWS, WHICHWAS ALSO PART OF THE AGREEMENT WITH NASAA.


Settled






THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTISTATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION INC. ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE ATTORNEY GENERAL OF THE STATE OF NEW YORKINVESTOR PROTECTION BUREAU ("NYAG") ALLEGED THAT THE FIRM'SCONDUCT IN CONNECTION WITH THE MARKETING AND SALE OF ARS TORETAIL AND OTHER CUSTOMERS VIOLATED ARTICLE 23-A OF THEGENERAL BUSINESS LAW ("MARTIN ACT"), §349 OF THE GENERALBUSINESS LAW, AND §63(12) OF THE EXECUTIVE LAW. WITHOUTADMITTING OR DENYING THE ALLEGATIONS, THE FIRM AGREED TO CEASEAND DESIST FROM VIOLATING THE MARTIN ACT, GENERAL BUSINESS LAW§ 349 AND/OR EXECUTIVE LAW § 63(12), AND TO CERTAIN UNDERTAKINGS,INCLUDING OFFERING TO BUY BACK ELIGIBLE ARS FROM CERTAININDIVIDUAL INVESTORS. THE FIRM ALSO AGREED TO PAY THE NYAG ACIVIL PENALTY OF $1,603,595.81, THIS STATE'S ALLOCATED PORTION OFTHE AMOUNT AGREED TO WITH NASAA. FINALLY, THE NYAG AND THE FIRMAGREED THAT THE CONSENT ORDER WOULD NOT SUBJECT THE FIRM TOANY DISQUALIFICATIONS UNDER THE FEDERAL SECURITIES LAWS, WHICHWAS ALSO PART OF THE AGREEMENT WITH NASAA.


i


Initiated By: COLORADO DIVISION OF SECURITIES


Cease and Desist



Docket/Case Number: ORDER NO. 10-L-10



Allegations: IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASA, THE STATE OF COLORADO ALLEGED THAT THEFIRM'S AGENTS INACCURATELY DESCRIBED ARS IN VIOLATION OF CRS§11-51-410(1)(G)AND THE FIRM FAILED TO SUPERVISE THE SALE OF ARS INVIOLATIONOF CRS §11-51-410(1)(I).



Resolution:


Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THEORDER, AND CONSENTS TO THE ENTRY OF THE ORDER BY THECOLORADO DIVISION OF SECURITIES.

Firm Statement THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTI-STATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE COLORADO DIVISION OF SECURITIES ("DIVISION")ALLEGED THAT THE FIRM'S CONDUCT IN CONNECTION WITH THEMARKETING AND SALE OF ARS TO RETAIL AND OTHER CUSTOMERSVIOLATED COLORADO REVISED STATUTES §§ 11-51-410(1)(I) AND 11-51-410(1)(G). WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRMAGREED TO CEASE AND DESIST FROM VIOLATING THE COLORADOSECURITIES ACT, AND TO CERTAIN UNDERTAKINGS, INCLUDING OFFERINGTO BUY BACK ELIGIBLE ARS FROM CERTAIN INDIVIDUAL INVESTORS. THEFIRM ALSO AGREED TO PAY THE DIVISION A CIVIL PENALTY OF $326,148.35,THIS STATE'S ALLOCATED PORTION OF THE AMOUNT AGREED TO WITHNASAA. FINALLY, THE COMMISSION AND THE FIRM AGREED THAT THECONSENT ORDER WOULD NOT SUBJECT THE FIRM TO ANYDISQUALIFICATIONS UNDER THE FEDERAL SECURITIES LAWS, WHICH WASALSO PART OF THE AGREEMENT WITH NASAA.


Settled






THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTI-STATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE COLORADO DIVISION OF SECURITIES ("DIVISION")ALLEGED THAT THE FIRM'S CONDUCT IN CONNECTION WITH THEMARKETING AND SALE OF ARS TO RETAIL AND OTHER CUSTOMERSVIOLATED COLORADO REVISED STATUTES §§ 11-51-410(1)(I) AND 11-51-410(1)(G). WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRMAGREED TO CEASE AND DESIST FROM VIOLATING THE COLORADOSECURITIES ACT, AND TO CERTAIN UNDERTAKINGS, INCLUDING OFFERINGTO BUY BACK ELIGIBLE ARS FROM CERTAIN INDIVIDUAL INVESTORS. THEFIRM ALSO AGREED TO PAY THE DIVISION A CIVIL PENALTY OF $326,148.35,THIS STATE'S ALLOCATED PORTION OF THE AMOUNT AGREED TO WITHNASAA. FINALLY, THE COMMISSION AND THE FIRM AGREED THAT THECONSENT ORDER WOULD NOT SUBJECT THE FIRM TO ANYDISQUALIFICATIONS UNDER THE FEDERAL SECURITIES LAWS, WHICH WASALSO PART OF THE AGREEMENT WITH NASAA.


i


Initiated By: TEXAS


Cease and Desist


ADMINISTRATIVE FINE


Docket/Case Number: IC10-CDO-02




Allegations: AUCTION RATE SECURITIES RELATED.



Resolution:


No


Order







Sanction Details: NO OTHER SANCTIONS.



Initiated By: TEXAS STATE SECURITIES BOARD


Cease and Desist


ADMINISTRATIVE FINE


Docket/Case Number: IC10-CDO-02



Allegations: IN CONNECTION WITH COORDINATED INVESTIGATIONS BY A MULTI-STATETASK FORCE WITH NASA, THE STATE OF TEXAS ALLEGED THAT THE FIRM'SAGENTS INACCURATELY DESCRIBED ARS AND THE FIRM FAILED TOSUPERVISE THE SALE OF ARS IN VIOLATION OF §115.10(B)(1) OF THERULES AND REGULATIONS OF THE TEXAS STATE SECURITIES BOARD.



Resolution:


Sanction Details: CREDIT SUISSE SECURITIES (USA) LLC NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THEORDER, AND CONSENTS TO THE ENTRY OF THE ORDER BY THE TEXASSTATE SECURITIES BOARD.

Firm Statement THIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTI-STATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE TEXAS STATE SECURITIES BOARD ("BOARD")ALLEGED THAT THE FIRM'S CONDUCT IN CONNECTION WITH THEMARKETING AND SALE OF ARS TO RETAIL AND OTHER CUSTOMERSCONSTITUTED INEQUITABLE PRACTICES IN THE SALE OF SECURITIES ANDVIOLATIONS OF §115.10(B)(1) OF THE RULES AND REGULATIONS OF THETEXAS STATE SECURITIES BOARD. WITHOUT ADMITTING OR DENYING THEALLEGATIONS, THE FIRM AGREED TO CEASE AND DESIST FROMVIOLATING THE TEXAS SECURITIES ACT, AND TO CERTAIN UNDERTAKINGS,INCLUDING OFFERING TO BUY BACK ELIGIBLE ARS FROM CERTAININDIVIDUAL INVESTORS. THE FIRM ALSO AGREED TO PAY THE BOARD ACIVIL PENALTY OF $1,369,288.01, THIS STATE'S ALLOCATED PORTION OFTHE AMOUNT AGREED TO WITH NASAA. FINALLY, THE COMMISSION ANDTHE FIRM AGREED THAT THE CONSENT ORDER WOULD NOT SUBJECT THEFIRM TO ANY DISQUALIFICATIONS UNDER THE FEDERAL SECURITIESLAWS, WHICH WAS ALSO PART OF THE AGREEMENT WITH NASAA.


Settled





www.finra.org/brokercheck User GuidanceTHIS ACTION IS PART OF A GLOBAL SETTLEMENT REGARDING THE SALEOF AUCTION RATE SECURITIES ("ARS") REACHED BY CREDIT SUISSESECURITIES (USA) LLC (THE "FIRM") WITH A MULTI-STATE TASK FORCECOMPOSED OF MEMBERS OF THE NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION ("NASAA"). AS PART OF THE GLOBALSETTLEMENT, INDIVIDUAL STATES MAY ENTER CONSENT ORDERS, INWHICH THE FIRM NEITHER ADMITS NOR DENIES THE ALLEGATIONS. INTHIS INSTANCE, THE TEXAS STATE SECURITIES BOARD ("BOARD")ALLEGED THAT THE FIRM'S CONDUCT IN CONNECTION WITH THEMARKETING AND SALE OF ARS TO RETAIL AND OTHER CUSTOMERSCONSTITUTED INEQUITABLE PRACTICES IN THE SALE OF SECURITIES ANDVIOLATIONS OF §115.10(B)(1) OF THE RULES AND REGULATIONS OF THETEXAS STATE SECURITIES BOARD. WITHOUT ADMITTING OR DENYING THEALLEGATIONS, THE FIRM AGREED TO CEASE AND DESIST FROMVIOLATING THE TEXAS SECURITIES ACT, AND TO CERTAIN UNDERTAKINGS,INCLUDING OFFERING TO BUY BACK ELIGIBLE ARS FROM CERTAININDIVIDUAL INVESTORS. THE FIRM ALSO AGREED TO PAY THE BOARD ACIVIL PENALTY OF $1,369,288.01, THIS STATE'S ALLOCATED PORTION OFTHE AMOUNT AGREED TO WITH NASAA. FINALLY, THE COMMISSION ANDTHE FIRM AGREED THAT THE CONSENT ORDER WOULD NOT SUBJECT THEFIRM TO ANY DISQUALIFICATIONS UNDER THE FEDERAL SECURITIESLAWS, WHICH WAS ALSO PART OF THE AGREEMENT WITH NASAA.


i


Initiated By: WEST VIRGINIA


Allegations: COORDINATED INVESTIGATIONS OF THE ACTIVITIES OF CREDIT SUISSESECURITIES (USA) LLC AND ITS AFFILIATES (HEREINAFTER "RESPONDENTCREDIT SUISSE")IN CONNECTION WITH ITS MARKETING AND SALESPRACTICES FOR INVESTMENT PRODUCTS GENERALLY KNOWN AS "AUCTION RATE SECURITIES" HAVE BEEN CONDUCTED BY A MULTISTATETASK FORCE COMPOSED OF MEMBERS OF THE NORTH AMERICANSECURITIES ADMINISTRATORS ASSOCIATION INC. (HEREINAFTER "NASAA"). RESPONDENT CREDIT SUISSE FAILED TOSUPERVISE.RESPONDENT CREDIT SUISSE VIOLATED WEST VIRGINIACODE §32-2-204 (A)(J) BY ITS FAILURE REASONABLY TO SUPERVISECERTAIN OF ITS REGISTERED SALESMAN IN THEIR COMMUNICATION OFMATERIAL INFORMATION CONCERNING AUCTION RATE SECURITIES.RESPONDENT CREDIT SUISSE ENGAGED IN DISHONEST AND UNETHICALPRACTICES:RESPONDENT CREDIT SUISSE THROUGH THE ACTIVITIES OF CERTAIN OFITS REGISTERED SALESMEN VIOLATED WEST VIRGINIA CODE §32-2-204(B)(33) BY FAILING TO ADEQUATELY STATE COMPLETE FACTSCONCERNING AUCTION RATE SECURITIES.








Cease and Desist


Docket/Case Number: ORDER NO: 81-816





Resolution:


Sanction Details: RESPONDENT CREDIT SUISSE NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THISORDER, AND CONSENTS TO THE ENTRY OF THIS ORDER BY THE WESTVIRGINIA SECURITIES COMMISSION.


No

Sanctions Ordered: Cease and Desist/Injunction

Order


Initiated By: WEST VIRGINIA


Docket/Case Number: ORDER NO: 81-816



Allegations: STATE ALLEGED THE FIRM FAILED TO SUPERVISE THE SALES OF AUCTIONRATE SECURITIES AND, THROUGH ITS AGENTS, FAILED TO STATECOMPLETE FACTS CONCERNING AUCTION RATE SECURITIES, ALLEGEDLYIN VIOLATION OF WEST VIRGINIA CODE §§ 32-2-204(A)(J) AND 32-2-204(B)(33).








Cease and Desist




Resolution:


Sanction Details: RESPONDENT CREDIT SUISSE NEITHER ADMITS NOR DENIES THEFINDINGS OF FACT AND CONCLUSIONS OF LAW CONTAINED IN THISORDER, AND CONSENTS TO THE ENTRY OF THIS ORDER BY THE WESTVIRGINIA SECURITIES COMMISSION.


Order


i


Allegations: **11/23/2009**STIPULATION OF FACTS AND CONSENT TO PENALTY FILED BYNYSE REGULATION'S DIVISION OF ENFORCEMENT AND PENDING.CONSENTED TO FINDINGS:FOR THE SOLE PURPOSE OF SETTLING THISDISCIPLINARY PROCEEDING, WITHOUT ADJUDICATION OF ANY ISSUES OFLAW OR FACT, AND WITHOUT ADMITTING OR DENYING ANY ALLEGATIONSOR FINDINGS, CREDIT SUISSE STIPULATED THAT THE FIRM:1. VIOLATEDNYSE RULE 342 IN THAT THE FIRM FAILED TO REASONABLY SUPERVISEAND IMPLEMENT ADEQUATE CONTROLS OVER CERTAIN OF ITS BUSINESSACTIVITIES BY FAILING TO ADEQUATELY SUPERVISE THE DEVELOPMENT,DEPLOYMENT AND OPERATION OF A PROPRIETARY ALGORITHM,INCLUDING A FAILURE TO IMPLEMENT PROCEDURES TO MONITORCERTAIN MODIFICATIONS MADE TO THE ALGORITHM; AND 2.VIOLATEDNYSE RULE 401 BY FAILING TO ADHERE TO THE PRINCIPLES OF GOODBUSINESS PRACTICE IN THE CONDUCT OF ITS BUSINESS AFFAIRS IN THAT:(I) A FIRM PROPRIETARY ALGORITHM DID NOT HAVE APPROPRIATECHECKS DESIGNED TO PREVENT THE SUBMISSION OF HUNDREDS OFTHOUSANDS OF ERRONEOUS MESSAGES OR TO ALERT THE FIRM IN THEEVENT OF REJECTED MESSAGES; (II) A FIRM PROPRIETARY ALGORITHMSENT HUNDREDS OF THOUSANDS OF CANCEL AND REPLACE REQUESTSFOR ORDERS THAT HAD NOT BEEN SENT TO THE NYSE; AND/OR (III) THEFIRM FAILED TO DETECT THE HUNDREDS OF THOUSANDS OF CANCELAND REPLACE REQUESTS, AND THE RESULTING HUNDREDS OFTHOUSANDS OF REJECT MESSAGES. STIPULATED SANCTION: CENSUREAND A FINE IN THE AMOUNT OF $150,000.







Initiated By: NEW YORK STOCK EXCHANGE DIVISION OF ENFORCEMENT







**11/23/2009**STIPULATION OF FACTS AND CONSENT TO PENALTY FILED BYNYSE REGULATION'S DIVISION OF ENFORCEMENT AND PENDING.CONSENTED TO FINDINGS:FOR THE SOLE PURPOSE OF SETTLING THISDISCIPLINARY PROCEEDING, WITHOUT ADJUDICATION OF ANY ISSUES OFLAW OR FACT, AND WITHOUT ADMITTING OR DENYING ANY ALLEGATIONSOR FINDINGS, CREDIT SUISSE STIPULATED THAT THE FIRM:1. VIOLATEDNYSE RULE 342 IN THAT THE FIRM FAILED TO REASONABLY SUPERVISEAND IMPLEMENT ADEQUATE CONTROLS OVER CERTAIN OF ITS BUSINESSACTIVITIES BY FAILING TO ADEQUATELY SUPERVISE THE DEVELOPMENT,DEPLOYMENT AND OPERATION OF A PROPRIETARY ALGORITHM,INCLUDING A FAILURE TO IMPLEMENT PROCEDURES TO MONITORCERTAIN MODIFICATIONS MADE TO THE ALGORITHM; AND 2.VIOLATEDNYSE RULE 401 BY FAILING TO ADHERE TO THE PRINCIPLES OF GOODBUSINESS PRACTICE IN THE CONDUCT OF ITS BUSINESS AFFAIRS IN THAT:(I) A FIRM PROPRIETARY ALGORITHM DID NOT HAVE APPROPRIATECHECKS DESIGNED TO PREVENT THE SUBMISSION OF HUNDREDS OFTHOUSANDS OF ERRONEOUS MESSAGES OR TO ALERT THE FIRM IN THEEVENT OF REJECTED MESSAGES; (II) A FIRM PROPRIETARY ALGORITHMSENT HUNDREDS OF THOUSANDS OF CANCEL AND REPLACE REQUESTSFOR ORDERS THAT HAD NOT BEEN SENT TO THE NYSE; AND/OR (III) THEFIRM FAILED TO DETECT THE HUNDREDS OF THOUSANDS OF CANCELAND REPLACE REQUESTS, AND THE RESULTING HUNDREDS OFTHOUSANDS OF REJECT MESSAGES. STIPULATED SANCTION: CENSUREAND A FINE IN THE AMOUNT OF $150,000.


Resolution:


Sanction Details: **11/27/2009**DECISION 09-NYSE-24 ISSUED BY NYSE HEARINGBOARD.CONSENTED TO FINDINGS:THE FIRM FAILED TO ADHERE TO THEPRINCIPLES OF GOOD BUSINESS PRACTICE, IN VIOLATION OF NYSE RULE401, IN THAT ON NOVEMBER 14, 2007 A CREDIT SUISSE PROPRIETARYALGORITHM ROUTED HUNDREDS OF THOUSANDS OF CANCEL/REPLACEREQUESTS TO THE NYSE FOR ORDERS THAT HAD NEVER BEEN SENT BYTHE ALGORITHM. THE UNUSUALLY LARGE AMOUNT OF CANCEL/REPLACEMESSAGES CONTRIBUTED TO THE OVER-QUEUING OF MESSAGE TRAFFICIN ALL OF THE SECURITIES TRADED AT FIVE POSTS ON THE NYSEFLOOR.MESSAGES,INCLUDING NEW ORDERS, MODIFICATIONS OFORDERS, AND CANCELLATION REQUESTS WERE FROZEN IN QUEUE ANDCOULD NOT BE IMMEDIATELY PROCESSED. THESE FIVE POSTS COULDNOT BE CLOSED ON TIME, ULTIMATELY CLOSING BETWEEN 4:10 P.M. AND4:27 P.M. THE FIRM ALSO VIOLATED NYSE RULE 342 BY FAILING TOPROPERLY SUPERVISE THE DEVELOPMENT AND IMPLEMENTATION OF THEFIRM'S PROPRIETARY ALGORITHM, PARTICULARLY WITH RESPECT TOCERTAIN REVISIONS TO THE ALGORITHM THAT CONTRIBUTED TO THENOVEMBER 14TH INCIDENT. THE FIRM ALSO FAILED TO PROPERLYMONITOR THE OPERATION OF THE ALGORITHM, AS EVIDENCED BY THEFACT THAT THE FIRM WAS UNAWARE THAT HUNDREDS OF THOUSANDSOF MESSAGES SENT BY THE ALGORITHM WERE BEING REJECTED BYNYSE SYSTEMS UNTIL BEING NOTIFIED OF THE ISSUE BY NYSEREGULATION THE FOLLOWING DAY.STIPULATED SANCTION:CENSURE AND A FINE IN THE AMOUNT OF 150,000


No


Decision






**11/27/2009**DECISION 09-NYSE-24 ISSUED BY NYSE HEARINGBOARD.CONSENTED TO FINDINGS:THE FIRM FAILED TO ADHERE TO THEPRINCIPLES OF GOOD BUSINESS PRACTICE, IN VIOLATION OF NYSE RULE401, IN THAT ON NOVEMBER 14, 2007 A CREDIT SUISSE PROPRIETARYALGORITHM ROUTED HUNDREDS OF THOUSANDS OF CANCEL/REPLACEREQUESTS TO THE NYSE FOR ORDERS THAT HAD NEVER BEEN SENT BYTHE ALGORITHM. THE UNUSUALLY LARGE AMOUNT OF CANCEL/REPLACEMESSAGES CONTRIBUTED TO THE OVER-QUEUING OF MESSAGE TRAFFICIN ALL OF THE SECURITIES TRADED AT FIVE POSTS ON THE NYSEFLOOR.MESSAGES,INCLUDING NEW ORDERS, MODIFICATIONS OFORDERS, AND CANCELLATION REQUESTS WERE FROZEN IN QUEUE ANDCOULD NOT BE IMMEDIATELY PROCESSED. THESE FIVE POSTS COULDNOT BE CLOSED ON TIME, ULTIMATELY CLOSING BETWEEN 4:10 P.M. AND4:27 P.M. THE FIRM ALSO VIOLATED NYSE RULE 342 BY FAILING TOPROPERLY SUPERVISE THE DEVELOPMENT AND IMPLEMENTATION OF THEFIRM'S PROPRIETARY ALGORITHM, PARTICULARLY WITH RESPECT TOCERTAIN REVISIONS TO THE ALGORITHM THAT CONTRIBUTED TO THENOVEMBER 14TH INCIDENT. THE FIRM ALSO FAILED TO PROPERLYMONITOR THE OPERATION OF THE ALGORITHM, AS EVIDENCED BY THEFACT THAT THE FIRM WAS UNAWARE THAT HUNDREDS OF THOUSANDSOF MESSAGES SENT BY THE ALGORITHM WERE BEING REJECTED BYNYSE SYSTEMS UNTIL BEING NOTIFIED OF THE ISSUE BY NYSEREGULATION THE FOLLOWING DAY.STIPULATED SANCTION:CENSURE AND A FINE IN THE AMOUNT OF 150,000

Regulator Statement **12/22/2009**THE DECISION IS NOW FINAL.







Allegations: **11/23/2009**STIPULATION OF FACTS AND CONSENT TO PENALTY FILED BYNYSE REGULATION'S DIVISION OF ENFORCEMENT AND PENDING.CONSENTED TO FINDINGS:FOR THE SOLE PURPOSE OF SETTLING THISDISCIPLINARY PROCEEDING, WITHOUT ADJUDICATION OF ANY ISSUES OFLAW OR FACT, AND WITHOUT ADMITTING OR DENYING ANY ALLEGATIONSOR FINDINGS, CREDIT SUISSE STIPULATED THAT THE FIRM:1. VIOLATEDNYSE RULE 342 IN THAT THE FIRM FAILED TO REASONABLY SUPERVISEAND IMPLEMENT ADEQUATE CONTROLS OVER CERTAIN OF ITS BUSINESSACTIVITIES BY FAILING TO ADEQUATELY SUPERVISE THE DEVELOPMENT,DEPLOYMENT AND OPERATION OF A PROPRIETARY ALGORITHM,INCLUDING A FAILURE TO IMPLEMENT PROCEDURES TO MONITORCERTAIN MODIFICATIONS MADE TO THE ALGORITHM; AND 2.VIOLATEDNYSE RULE 401 BY FAILING TO ADHERE TO THE PRINCIPLES OF GOODBUSINESS PRACTICE IN THE CONDUCT OF ITS BUSINESS AFFAIRS IN THAT:(I) A FIRM PROPRIETARY ALGORITHM DID NOT HAVE APPROPRIATECHECKS DESIGNED TO PREVENT THE SUBMISSION OF HUNDREDS OFTHOUSANDS OF ERRONEOUS MESSAGES OR TO ALERT THE FIRM IN THEEVENT OF REJECTED MESSAGES; (II) A FIRM PROPRIETARY ALGORITHMSENT HUNDREDS OF THOUSANDS OF CANCEL AND REPLACE REQUESTSFOR ORDERS THAT HAD NOT BEEN SENT TO THE NYSE; AND/OR (III) THEFIRM FAILED TO DETECT THE HUNDREDS OF THOUSANDS OF CANCELAND REPLACE REQUESTS, AND THE RESULTING HUNDREDS OFTHOUSANDS OF REJECT MESSAGES. STIPULATED SANCTION: CENSUREAND A FINE IN THE AMOUNT OF $150,000.











Resolution:


Sanction Details: **11/27/2009**DECISION 09-NYSE-24 ISSUED BY NYSE HEARINGBOARD.CONSENTED TO FINDINGS:THE FIRM FAILED TO ADHERE TO THEPRINCIPLES OF GOOD BUSINESS PRACTICE, IN VIOLATION OF NYSE RULE401, IN THAT ON NOVEMBER 14, 2007 A CREDIT SUISSE PROPRIETARYALGORITHM ROUTED HUNDREDS OF THOUSANDS OF CANCEL/REPLACEREQUESTS TO THE NYSE FOR ORDERS THAT HAD NEVER BEEN SENT BYTHE ALGORITHM. THE UNUSUALLY LARGE AMOUNT OF CANCEL/REPLACEMESSAGES CONTRIBUTED TO THE OVER-QUEUING OF MESSAGE TRAFFICIN ALL OF THE SECURITIES TRADED AT FIVE POSTS ON THE NYSEFLOOR.MESSAGES,INCLUDING NEW ORDERS, MODIFICATIONS OFORDERS, AND CANCELLATION REQUESTS WERE FROZEN IN QUEUE ANDCOULD NOT BE IMMEDIATELY PROCESSED. THESE FIVE POSTS COULDNOT BE CLOSED ON TIME, ULTIMATELY CLOSING BETWEEN 4:10 P.M. AND4:27 P.M. THE FIRM ALSO VIOLATED NYSE RULE 342 BY FAILING TOPROPERLY SUPERVISE THE DEVELOPMENT AND IMPLEMENTATION OF THEFIRM'S PROPRIETARY ALGORITHM, PARTICULARLY WITH RESPECT TOCERTAIN REVISIONS TO THE ALGORITHM THAT CONTRIBUTED TO THENOVEMBER 14TH INCIDENT. THE FIRM ALSO FAILED TO PROPERLYMONITOR THE OPERATION OF THE ALGORITHM, AS EVIDENCED BY THEFACT THAT THE FIRM WAS UNAWARE THAT HUNDREDS OF THOUSANDSOF MESSAGES SENT BY THE ALGORITHM WERE BEING REJECTED BYNYSE SYSTEMS UNTIL BEING NOTIFIED OF THE ISSUE BY NYSEREGULATION THE FOLLOWING DAY. STIPULATED SANCTION:CENSURE ANDA FINE IN THE AMOUNT OF 150,000

Firm Statement THIS DECISION IS NOW FINAL.


Decision


i








Initiated By: FINRA






Other Product Type(s): RESEARCH ANALYST CONFLICTS OF INTEREST

Allegations: NASD RULE 2110 - CREDIT SUISSE SECURITIES (USA) LLC FAILED TOFULLY COMPLY WITH A PREVIOUS UNDERTAKING BY FAILING TO POST ALLOF THE REQUIRED CURRENT INDEPENDENT RESEARCH (IR) ON ITS IRWEBSITE. AN INDEPENDENT CONSULTANT DETECTED PROBLEMS ON THEWEBSITE INCLUDING THE POSTING OF IR FOR COMPANIES NOT COVEREDBY THE FIRM AND DELAYS IN PROVIDING IR IN A TIMELY MANNER AFTEROFFERINGS. THE FIRM FAILED TO IMPLEMENT EFFECTIVE MEASURES TODETECT AND PREVENT ADDITIONAL FAILURES.


Resolution:




No




Allegations: NASD RULE 2110 - CREDIT SUISSE SECURITIES (USA) LLC FAILED TOFULLY COMPLY WITH A PREVIOUS UNDERTAKING BY FAILING TO POST ALLOF THE REQUIRED CURRENT INDEPENDENT RESEARCH (IR) ON ITS IRWEBSITE. AN INDEPENDENT CONSULTANT DETECTED PROBLEMS ON THEWEBSITE INCLUDING THE POSTING OF IR FOR COMPANIES NOT COVEREDBY THE FIRM AND DELAYS IN PROVIDING IR IN A TIMELY MANNER AFTEROFFERINGS. THE FIRM FAILED TO IMPLEMENT EFFECTIVE MEASURES TODETECT AND PREVENT ADDITIONAL FAILURES.








Initiated By: FINRA






Other Product Type(s): RESEARCH ANALYST CONFLICTS OF INTEREST

NASD RULE 2110 - CREDIT SUISSE SECURITIES (USA) LLC FAILED TOFULLY COMPLY WITH A PREVIOUS UNDERTAKING BY FAILING TO POST ALLOF THE REQUIRED CURRENT INDEPENDENT RESEARCH (IR) ON ITS IRWEBSITE. AN INDEPENDENT CONSULTANT DETECTED PROBLEMS ON THEWEBSITE INCLUDING THE POSTING OF IR FOR COMPANIES NOT COVEREDBY THE FIRM AND DELAYS IN PROVIDING IR IN A TIMELY MANNER AFTEROFFERINGS. THE FIRM FAILED TO IMPLEMENT EFFECTIVE MEASURES TODETECT AND PREVENT ADDITIONAL FAILURES.


Resolution:






i


Initiated By: FINRA



Allegations: NASD RULE 2110 - CREDIT SUISSE SECURITIES (USA) LLC SOLDCORPORATE BONDS TO CUSTOMERS AND FAILED TO SELL SUCH BONDSAT A PRICE THAT WAS FAIR, TAKING INTO CONSIDERATION ALL RELEVANTCIRCUMSTANCES, INCLUDING MARKET CONDITIONS WITH RESPECT TOEACH BOND AT THE TIME OF THE TRANSACTION, THE EXPENSE INVOLVEDAND THAT THE FIRM WAS ENTITLED TO A PROFIT.















Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED, FINED $200,000 AND REQUIRED TOPAY $193,023, PLUS INTEREST, IN RESTITUTION TO CUSTOMERS.SATISFACTORY PROOF OF PAYMENT OF THE RESTITUTION OR OFREASONABLE AND DOCUMENTED EFFORTS UNDERTAKEN TO EFFECTRESTITUTION SHALL BE PROVIDED TO FINRA NO LATER THAN 120 DAYSAFTER ACCEPTANCE OF THIS AWC. ANY UNDISTRIBUTED RESTITUTIONAND INTEREST SHALL BE FORWARDED TO THE APPROPRIATE ESCHEAT,UNCLAIMED PROPERTY OR ABANDONED PROPERTY FUND FOR THESTATE IN WHICH THE CUSTOMER LAST RESIDED.


No

Sanctions Ordered: CensureMonetary/Fine $200,000.00Disgorgement/Restitution



Allegations: NASD RULE 2110 - CREDIT SUISSE SECURITIES (USA) LLC SOLDCORPORATE BONDS TO CUSTOMERS AND FAILED TO SELL SUCH BONDSAT A PRICE THAT WAS FAIR, TAKING INTO CONSIDERATION ALL RELEVANTCIRCUMSTANCES, INCLUDING MARKET CONDITIONS WITH RESPECT TOEACH BOND AT THE TIME OF THE TRANSACTION, THE EXPENSE INVOLVEDAND THAT THE FIRM WAS ENTITLED TO A PROFIT.








Initiated By: FINRA




CENSURE





NASD RULE 2110 - CREDIT SUISSE SECURITIES (USA) LLC SOLDCORPORATE BONDS TO CUSTOMERS AND FAILED TO SELL SUCH BONDSAT A PRICE THAT WAS FAIR, TAKING INTO CONSIDERATION ALL RELEVANTCIRCUMSTANCES, INCLUDING MARKET CONDITIONS WITH RESPECT TOEACH BOND AT THE TIME OF THE TRANSACTION, THE EXPENSE INVOLVEDAND THAT THE FIRM WAS ENTITLED TO A PROFIT.


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED, FINED $200,000 AND REQUIRED TOPAY $193,023, PLUS INTEREST, IN RESTITUTION TO CUSTOMERS.SATISFACTORY PROOF OF PAYMENT OF THE RESTITUTION OR OFREASONABLE AND DOCUMENTED EFFORTS UNDERTAKEN TO EFFECTRESTITUTION SHALL BE PROVIDED TO FINRA NO LATER THAN 120 DAYSAFTER ACCEPTANCE OF THIS AWC. ANY UNDISTRIBUTED RESTITUTIONAND INTEREST SHALL BE FORWARDED TO THE APPROPRIATE ESCHEAT,UNCLAIMED PROPERTY OR ABANDONED PROPERTY FUND FOR THESTATE IN WHICH THE CUSTOMER LAST RESIDED.




i


Allegations: SEC RULES 10B-10, 203(A)(1) OF REGULATION SHO, 203(B)(3)OFREGULATION SHO, NASD RULES 2110, 4632, 4632(B), 4632(D), 5430,6130(B), 6230(A), 6230(C)(6), 6230(C)(8), 6420, 6620(A), 6955(A) - CREDITSUISSE SECURITIES (USA) LLC KNEW OR HAD REASONABLE GROUNDS TOBELIEVE THAT THE SALE OF AN EQUITY SECURITY WAS OR WOULD BEEFFECTED PURSUANT TO AN ORDER MARKED LONG AND FAILED TODELIVER THE SECURITY ON THE DATE DELIVERY WAS DUE. THE FIRM HADFAIL-TO-DELIVER POSITIONS AT A REGISTERED CLEARING AGENCY INTHRESHOLD SECURITIES FOR 13 CONSECUTIVE SETTLEMENT DAYS ANDTO FAILED TO IMMEDIATELY THEREAFTER CLOSE OUT THE FAIL-TO-DELIVER POSITIONS BY PURCHASING SECURITIES OF LIKE KIND ANDQUANTITY. THE FIRM REPORTED TO OATS EXECUTION REPORTS THATCONTAINED INACCURATE, INCOMPLETE OR IMPROPERLY FORMATTEDDATA SO THAT THE OATS SYSTEM WAS UNABLE TO LINK THE EXECUTIONREPORTS TO THE RELATED TRADE REPORTS IN AN NASD TRADEREPORTING SYSTEM. THE FIRM TRANSMITTED TO OATS REPORTS THATCONTAINED INACCURATE, INCOMPLETE OR IMPROPERLY FORMATTEDDATA THAT CONTAINED INACCURATE CAPACITY DESIGNATIONS ANDFAILED TO INCLUDE SPECIAL HANDLING INSTRUCTIONS. THE FIRM FAILEDTO SUBMIT TO THE TRADE REPORTING FACILITY (TRF), FOR THEOFFSETTING, "RISKLESS" PORTION OF "RISKLESS" PRINCIPALTRANSACTIONS IN DESIGNATED SECURITIES, EITHER A CLEARING-ONLYREPORT WITH A CAPACITY INDICATOR OF "RISKLESS PRINCIPAL" OR ANON-TAPE, NON-CLEARING REPORT WITH A CAPACITY INDICATOR OF "RISKLESS PRINCIPAL." THE FIRM FAILED TO REPORT TO THE TRF LASTSALE REPORTS OF TRANSACTIONS IN DESIGNATED SECURITIES. THEFIRM FAILED TO PROVIDE WRITTEN NOTIFICATION DISCLOSING TO ITSCUSTOMERS ITS CORRECT CAPACITY IN TRANSACTIONS; PROVIDEDWRITTEN NOTIFICATION DISCLOSING A COMPENSATION TYPEINCONSISTENT WITH THE CAPACITY IN WHICH THE FIRM EXECUTED THETRANSACTION AND FAILED TO DISCLOSE THAT A TRANSACTION WASEXECUTED AT AN AVERAGE PRICE. [CONTINUED IN COMMENTS.]








Initiated By: FINRA






Other Product Type(s): THRESHOLD SECURITIES, DESIGNATED SECURITIES, REPORTABLESECURITIES, ELIGIBLE SECURITIES, TRACE-ELIGIBLE SECURITIES

SEC RULES 10B-10, 203(A)(1) OF REGULATION SHO, 203(B)(3)OFREGULATION SHO, NASD RULES 2110, 4632, 4632(B), 4632(D), 5430,6130(B), 6230(A), 6230(C)(6), 6230(C)(8), 6420, 6620(A), 6955(A) - CREDITSUISSE SECURITIES (USA) LLC KNEW OR HAD REASONABLE GROUNDS TOBELIEVE THAT THE SALE OF AN EQUITY SECURITY WAS OR WOULD BEEFFECTED PURSUANT TO AN ORDER MARKED LONG AND FAILED TODELIVER THE SECURITY ON THE DATE DELIVERY WAS DUE. THE FIRM HADFAIL-TO-DELIVER POSITIONS AT A REGISTERED CLEARING AGENCY INTHRESHOLD SECURITIES FOR 13 CONSECUTIVE SETTLEMENT DAYS ANDTO FAILED TO IMMEDIATELY THEREAFTER CLOSE OUT THE FAIL-TO-DELIVER POSITIONS BY PURCHASING SECURITIES OF LIKE KIND ANDQUANTITY. THE FIRM REPORTED TO OATS EXECUTION REPORTS THATCONTAINED INACCURATE, INCOMPLETE OR IMPROPERLY FORMATTEDDATA SO THAT THE OATS SYSTEM WAS UNABLE TO LINK THE EXECUTIONREPORTS TO THE RELATED TRADE REPORTS IN AN NASD TRADEREPORTING SYSTEM. THE FIRM TRANSMITTED TO OATS REPORTS THATCONTAINED INACCURATE, INCOMPLETE OR IMPROPERLY FORMATTEDDATA THAT CONTAINED INACCURATE CAPACITY DESIGNATIONS ANDFAILED TO INCLUDE SPECIAL HANDLING INSTRUCTIONS. THE FIRM FAILEDTO SUBMIT TO THE TRADE REPORTING FACILITY (TRF), FOR THEOFFSETTING, "RISKLESS" PORTION OF "RISKLESS" PRINCIPALTRANSACTIONS IN DESIGNATED SECURITIES, EITHER A CLEARING-ONLYREPORT WITH A CAPACITY INDICATOR OF "RISKLESS PRINCIPAL" OR ANON-TAPE, NON-CLEARING REPORT WITH A CAPACITY INDICATOR OF "RISKLESS PRINCIPAL." THE FIRM FAILED TO REPORT TO THE TRF LASTSALE REPORTS OF TRANSACTIONS IN DESIGNATED SECURITIES. THEFIRM FAILED TO PROVIDE WRITTEN NOTIFICATION DISCLOSING TO ITSCUSTOMERS ITS CORRECT CAPACITY IN TRANSACTIONS; PROVIDEDWRITTEN NOTIFICATION DISCLOSING A COMPENSATION TYPEINCONSISTENT WITH THE CAPACITY IN WHICH THE FIRM EXECUTED THETRANSACTION AND FAILED TO DISCLOSE THAT A TRANSACTION WASEXECUTED AT AN AVERAGE PRICE. [CONTINUED IN COMMENTS.]


Resolution:


No










Regulator Statement THE FIRM FAILED, WITHIN 90 SECONDS AFTER EXECUTION, TO TRANSMITTO THE NASDAQ MARKET CENTER (NMC) LAST SALE REPORTS OFTRANSACTIONS IN OTC EQUITY SECURITIES AND FAILED TO DESIGNATESOME OF THEM AS LATE. THE FIRM FAILED TO ACCEPT OR DECLINE INTHE NMC, THE TRF OR THE OTC REPORTING FACILITY TRANSACTIONS INREPORTABLE SECURITIES WITHIN 20 MINUTES AFTER EXECUTION. THEFIRM INCORRECTLY DESIGNATED AS ".SLD" OR ".ST" TO THE NMC OR TRFLAST SALE REPORTS OF TRANSACTIONS IN ELIGIBLE OR DESIGNATEDSECURITIES, WHEN THE REPORTS SHOULD HAVE BEEN DESIGNATED AS ".PRP." THE FIRM DOUBLE REPORTED LAST SALE REPORTS OFTRANSACTIONS IN DESIGNATED SECURITIES TO THE TRF; FAILED TOREPORT TO TRACE THE CORRECT CONTRA-PARTY'S IDENTIFIER FORTRANSACTIONS IN TRACE-ELIGIBLE SECURITIES. THE FIRM FAILED TOREPORT TO TRACE TRANSACTIONS IN TRACE-ELIGIBLE SECURITIESEXECUTED ON A BUSINESS DAY DURING TRACE SYSTEM HOURS WITHIN15 MINUTES OF TIME OF EXECUTION; FAILED TO REPORT TO TRACE THECORRECT TIME OF TRADE EXECUTION FOR TRANSACTIONS IN TRACE-ELIGIBLE SECURITIES.


No



Allegations: SEC RULES 10B-10, 203(A)(1) OF REGULATION SHO, 203(B)(3)OFREGULATION SHO, NASD RULES 2110, 4632, 4632(B), 4632(D), 5430, 6130(B),6230(A), 6230(C)(6), 6230(C)(8), 6420, 6620(A), 6955(A) - CREDIT SUISSESECURITIES (USA) LLC KNEW OR HAD REASONABLE GROUNDS TOBELIEVE THAT THE SALE OF AN EQUITY SECURITY WAS OR WOULD BEEFFECTED PURSUANT TO AN ORDER MARKED LONG AND FAILED TODELIVER THE SECURITY ON THE DATE DELIVERY WAS DUE. THE FIRM HADFAIL-TO-DELIVER POSITIONS AT A REGISTERED CLEARING AGENCY INTHRESHOLD SECURITIES FOR 13 CONSECUTIVE SETTLEMENT DAYS ANDTO FAILED TO IMMEDIATELY THEREAFTER CLOSE OUT THE FAIL-TO-DELIVER POSITIONS BY PURCHASING SECURITIES OF LIKE KIND ANDQUANTITY. THE FIRM REPORTED TO OATS EXECUTION REPORTS THATCONTAINED INACCURATE, INCOMPLETE OR IMPROPERLY FORMATTEDDATA SO THAT THE OATS SYSTEM WAS UNABLE TO LINK THE EXECUTIONREPORTS TO THE RELATED TRADE REPORTS IN AN NASD TRADEREPORTING SYSTEM. THE FIRM TRANSMITTED TO OATS REPORTS THATCONTAINED INACCURATE, INCOMPLETE OR IMPROPERLY FORMATTEDDATA THAT CONTAINED INACCURATE CAPACITY DESIGNATIONS ANDFAILED TO INCLUDE SPECIAL HANDLING INSTRUCTIONS. THE FIRM FAILEDTO SUBMIT TO THE TRADE REPORTING FACILITY (TRF), FOR THEOFFSETTING, "RISKLESS" PORTION OF "RISKLESS" PRINCIPALTRANSACTIONS IN DESIGNATED SECURITIES, EITHER A CLEARING-ONLYREPORT WITH A CAPACITY INDICATOR OF "RISKLESS PRINCIPAL" OR ANON-TAPE, NON-CLEARING REPORT WITH A CAPACITY INDICATOR OF "RISKLESS PRINCIPAL." THE FIRM FAILED TO REPORT TO THE TRF LASTSALE REPORTS OF TRANSACTIONS IN DESIGNATED SECURITIES. THEFIRM FAILED TO PROVIDE WRITTEN NOTIFICATION DISCLOSING TO ITSCUSTOMERS IT CORRECT CAPACITY IN TRANSACTIONS. THE FIRM FAILED,WITHIN 90 SECONDS AFTER EXECUTION, TO TRANSMIT TO THE NASDAQMARKET CENTER (NMC) LAST SALE REPORTS OF TRANSACTIONS IN OTCEQUITY SECURITIES AND FAILED TO DESIGNATE SOME OF THEM AS LATE.[CONTINUED IN COMMENTS.]







Initiated By: FINRA






Other Product Type(s): THRESHOLD SECURITIES, DESIGNATED SECURITIES, REPORTABLESECURITIES, ELIGIBLE SECURITIES, TRACE-ELIGIBLE SECURITIES

SEC RULES 10B-10, 203(A)(1) OF REGULATION SHO, 203(B)(3)OFREGULATION SHO, NASD RULES 2110, 4632, 4632(B), 4632(D), 5430, 6130(B),6230(A), 6230(C)(6), 6230(C)(8), 6420, 6620(A), 6955(A) - CREDIT SUISSESECURITIES (USA) LLC KNEW OR HAD REASONABLE GROUNDS TOBELIEVE THAT THE SALE OF AN EQUITY SECURITY WAS OR WOULD BEEFFECTED PURSUANT TO AN ORDER MARKED LONG AND FAILED TODELIVER THE SECURITY ON THE DATE DELIVERY WAS DUE. THE FIRM HADFAIL-TO-DELIVER POSITIONS AT A REGISTERED CLEARING AGENCY INTHRESHOLD SECURITIES FOR 13 CONSECUTIVE SETTLEMENT DAYS ANDTO FAILED TO IMMEDIATELY THEREAFTER CLOSE OUT THE FAIL-TO-DELIVER POSITIONS BY PURCHASING SECURITIES OF LIKE KIND ANDQUANTITY. THE FIRM REPORTED TO OATS EXECUTION REPORTS THATCONTAINED INACCURATE, INCOMPLETE OR IMPROPERLY FORMATTEDDATA SO THAT THE OATS SYSTEM WAS UNABLE TO LINK THE EXECUTIONREPORTS TO THE RELATED TRADE REPORTS IN AN NASD TRADEREPORTING SYSTEM. THE FIRM TRANSMITTED TO OATS REPORTS THATCONTAINED INACCURATE, INCOMPLETE OR IMPROPERLY FORMATTEDDATA THAT CONTAINED INACCURATE CAPACITY DESIGNATIONS ANDFAILED TO INCLUDE SPECIAL HANDLING INSTRUCTIONS. THE FIRM FAILEDTO SUBMIT TO THE TRADE REPORTING FACILITY (TRF), FOR THEOFFSETTING, "RISKLESS" PORTION OF "RISKLESS" PRINCIPALTRANSACTIONS IN DESIGNATED SECURITIES, EITHER A CLEARING-ONLYREPORT WITH A CAPACITY INDICATOR OF "RISKLESS PRINCIPAL" OR ANON-TAPE, NON-CLEARING REPORT WITH A CAPACITY INDICATOR OF "RISKLESS PRINCIPAL." THE FIRM FAILED TO REPORT TO THE TRF LASTSALE REPORTS OF TRANSACTIONS IN DESIGNATED SECURITIES. THEFIRM FAILED TO PROVIDE WRITTEN NOTIFICATION DISCLOSING TO ITSCUSTOMERS IT CORRECT CAPACITY IN TRANSACTIONS. THE FIRM FAILED,WITHIN 90 SECONDS AFTER EXECUTION, TO TRANSMIT TO THE NASDAQMARKET CENTER (NMC) LAST SALE REPORTS OF TRANSACTIONS IN OTCEQUITY SECURITIES AND FAILED TO DESIGNATE SOME OF THEM AS LATE.[CONTINUED IN COMMENTS.]


Resolution:











Firm Statement THE FIRM FAILED TO ACCEPT OR DECLINE IN THE NMC, THE TRF OR THEOTC REPORTING FACILITY TRANSACTIONS IN REPORTABLE SECURITIESWITHIN 20 MINUTES AFTER EXECUTION. THE FIRM INCORRECTLYDESIGNATED AS ".SLD" OR ".ST" TO THE NMC OR TRF LAST SALE REPORTSOF TRANSACTIONS IN ELIGIBLE OR DESIGNATED SECURITIES, WHEN THEREPORTS SHOULD HAVE BEEN DESIGNATED AS ".PRP." THE FIRM DOUBLEREPORTED LAST SALE REPORTS OF TRANSACTIONS IN DESIGNATEDSECURITIES TO THE TRF; FAILED TO REPORT TO TRACE THE CORRECTCONTRA-PARTY'S IDENTIFIER FOR TRANSACTIONS IN TRACE-ELIGIBLESECURITIES. THE FIRM FAILED TO REPORT TO TRACE TRANSACTIONS INTRACE-ELIGIBLE SECURITIES EXECUTED ON A BUSINESS DAY DURINGTRACE SYSTEM HOURS WITHIN 15 MINUTES OF TIME OF EXECUTION;FAILED TO REPORT TO TRACE THE CORRECT TIME OF TRADE EXECUTIONFOR TRANSACTIONS IN TRACE-ELIGIBLE SECURITIES.


i


Allegations: **6/20/08** STIPULATION OF FACTS AND CONSENT TO PENALTY FILED BYNYSE REGULATION'S DIVISION OF ENFORCEMENT ANDPENDING. CONSENTED TO FINDINGS: FOR THE SOLE PURPOSE OFSETTLING THIS DISCIPLINARY PROCEEDING, WITHOUT ADJUDICATION OFANY ISSUES OF LAW OR FACT, AND WIITHOUT ADMITTING OR DENYINGANY ALLEGATIONS OR FINDINGS REFERRED TO HEREIN, CSSUSTIPULATED THAT DURING THE PERIOD OF JUNE30, 2004 THROUGH DECEMBER 31, 2007, IT 1. VIOLATED NYSE RULE 92(A)BY, ON FOUR OCCASIONS, ENTERING AN ORDER TOBUY (SELL) AN NYSE-LISTED SECURITY WHILE KNOWINGLY INPOSSESSION OF A CUSTOMER ORDER TO BUY (SELL) SUCH SECURITY,WHICH COULD BE EXECUTED AT THE SAME PRICE. [JANUARY 20, 2005THROUGH DECEMBER 31, 2007 ONLY]2. VIOLATED NYSE RULE 401, ON 11 OCCASIONS, IN THAT IT FAILED TOCONDUCT ITS BUSINESS AFFAIRS IN ACCORDANCE WITH PRINCIPLES OFGOOD BUSINESS PRACTICE BY FAILING TO ADEQUATELY DOCUMENTWHETHER IT HAD OBTAINED ITS CUSTOMER'S PERMISSION TO TRADEALONG WITH THE CUSTOMER'S ORDER. [JANUARY 20, 2005 THROUGHDECEMBER 31, 2007 ONLY]3. VIOLATED NYSE RULE 410(B), IN THAT THE FIRM, ON SIX OCCASIONS,ALLOWED PROPRIETARY ORDERS THAT COULD ONLY HAVE BEENPROPERLY EXECUTED PURSUANT TO SECTION 11(A)(1)(G) OF THESECURITIES EXCHANGE ACT OF 1934 ("EXCHANGE ACT") TO BETRANSMITTED TO THE NYSE FLOOR WITHOUT BEING IDENTIFIED IN AMANNER THAT WOULD ENABLE THE ORDER TO BE HANDLED PURSUANTTO THE REQUIREMENTS OF EXCHANGE ACT SECTION 11(A)(1)(G).[JANUARY 20, 2005 THROUGH DECEMBER 31, 2007 ONLY]4. VIOLATED SECTION 11(A)(1) OF THE EXCHANGE ACT AND NYSE RULE 90IN THAT, ON FOUR OCCASIONS, ORDERS WERE EXECUTED BY THE FIRM'SFLOOR BROKERS ON THE NYSE FLOOR FOR AN ACCOUNT IN WHICH THEFIRM HAD AN INTEREST WITHOUT SUCH ORDERS MEETING THEREQUIREMENTS OF A STATUTORY EXEMPTION. [JANUARY 20, 2005THROUGH DECEMBER 31, 2007 ONLY]**CONTINUED ON #13C**











Docket/Case Number: HBD# 08-36



**6/20/08** STIPULATION OF FACTS AND CONSENT TO PENALTY FILED BYNYSE REGULATION'S DIVISION OF ENFORCEMENT ANDPENDING. CONSENTED TO FINDINGS: FOR THE SOLE PURPOSE OFSETTLING THIS DISCIPLINARY PROCEEDING, WITHOUT ADJUDICATION OFANY ISSUES OF LAW OR FACT, AND WIITHOUT ADMITTING OR DENYINGANY ALLEGATIONS OR FINDINGS REFERRED TO HEREIN, CSSUSTIPULATED THAT DURING THE PERIOD OF JUNE30, 2004 THROUGH DECEMBER 31, 2007, IT 1. VIOLATED NYSE RULE 92(A)BY, ON FOUR OCCASIONS, ENTERING AN ORDER TOBUY (SELL) AN NYSE-LISTED SECURITY WHILE KNOWINGLY INPOSSESSION OF A CUSTOMER ORDER TO BUY (SELL) SUCH SECURITY,WHICH COULD BE EXECUTED AT THE SAME PRICE. [JANUARY 20, 2005THROUGH DECEMBER 31, 2007 ONLY]2. VIOLATED NYSE RULE 401, ON 11 OCCASIONS, IN THAT IT FAILED TOCONDUCT ITS BUSINESS AFFAIRS IN ACCORDANCE WITH PRINCIPLES OFGOOD BUSINESS PRACTICE BY FAILING TO ADEQUATELY DOCUMENTWHETHER IT HAD OBTAINED ITS CUSTOMER'S PERMISSION TO TRADEALONG WITH THE CUSTOMER'S ORDER. [JANUARY 20, 2005 THROUGHDECEMBER 31, 2007 ONLY]3. VIOLATED NYSE RULE 410(B), IN THAT THE FIRM, ON SIX OCCASIONS,ALLOWED PROPRIETARY ORDERS THAT COULD ONLY HAVE BEENPROPERLY EXECUTED PURSUANT TO SECTION 11(A)(1)(G) OF THESECURITIES EXCHANGE ACT OF 1934 ("EXCHANGE ACT") TO BETRANSMITTED TO THE NYSE FLOOR WITHOUT BEING IDENTIFIED IN AMANNER THAT WOULD ENABLE THE ORDER TO BE HANDLED PURSUANTTO THE REQUIREMENTS OF EXCHANGE ACT SECTION 11(A)(1)(G).[JANUARY 20, 2005 THROUGH DECEMBER 31, 2007 ONLY]4. VIOLATED SECTION 11(A)(1) OF THE EXCHANGE ACT AND NYSE RULE 90IN THAT, ON FOUR OCCASIONS, ORDERS WERE EXECUTED BY THE FIRM'SFLOOR BROKERS ON THE NYSE FLOOR FOR AN ACCOUNT IN WHICH THEFIRM HAD AN INTEREST WITHOUT SUCH ORDERS MEETING THEREQUIREMENTS OF A STATUTORY EXEMPTION. [JANUARY 20, 2005THROUGH DECEMBER 31, 2007 ONLY]**CONTINUED ON #13C**


Resolution:


Sanction Details: **6/23/08**DECISION NO. 08-36 ISSUED BY NYSE HEARING BOARD.DECISION: DURING THE PERIOD OF JUNE 30, 2004 THROUGH DECEMBER31, 2007, CREDIT SUISSE SECURITIES (USA) LLCVIOLATED NYSE RULE 92(A) BY ENTERING ORDER TO BUY (SELL) NYSE-LISTED SECURITY WHILE KNOWINGLY IN POSSESSION OF CUSTOMERORDER TO BUY (SELL) SUCH SECURITY, WHICH COULD BE EXECUTED ATSAME PRICE; VIOLATED NYSE RULE 401 BY FAILING TO ADEQUATELYDOCUMENT WHETHER IT HAD OBTAINED CUSTOMER'SPERMISSION TO TRADE ALONG WITH CUSTOMER'S ORDER; VIOLATEDNYSE RULE 410(B) BY ALLOWING PROPRIETARY ORDERS THAT COULDONLY HAVE BEEN PROPERLY EXECUTED PURSUANT TO SECTIONL1(A)(I)(G) OF SECURITIES EXCHANGE ACT OF 1934 TO BE TRANSMITTEDTO NYSE FLOOR WITHOUT BEING IDENTIFIED IN MANNER THAT WOULDENABLE ORDER TO BE HANDLED PURSUANT TO REQUIREMENTS OFEXCHANGE ACT SECTION L1(A)(I)(G); VIOLATED SECTION L1(A)(I) OFEXCHANGE ACT AND NYSE RULE 90 BY EXECUTING ORDERS BY FIRM'SFLOOR BROKERS ON FLOOR FOR ACCOUNT IN WHICH FIRM HADINTEREST WITHOUT SUCH ORDERS MEETING REQUIREMENTS OFSTATUTORY EXEMPTION; VIOLATED NYSE RULE 123C BY FAILING TOCOMPLY WITH REQUIREMENTS GOVERNING ENTRY AND CANCELLATIONOF MOC AND LOC ORDERS; VIOLATED NYSE RULE 132 BY SUBMITTINGTRADES TO COMPARISON AND CLEARANCE WITH INACCURATE ACCOUNTTYPE INDICATORS OR OTHER AUDIT TRAIL DATA OR WITHOUT REQUIREDAUDIT TRAIL DATA; VIOLATED NYSE RULE 476(A)(8) BY PURCHASE ANDSALE OF SECURITIES, EXECUTION OF WHICH INVOLVED NO CHANGE OFBENEFICIAL OWNERSHIP; VIOLATED NYSE RULE 342 BY FAILING TOREASONABLY SUPERVISE AND IMPLEMENT ADEQUATE CONTROLS,INCLUDING SEPARATE SYSTEM OF FOLLOW UP AND REVIEW,REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH NYSE RULESWITH RESPECT TO (A) TRANSMISSION AND EXECUTION OF CERTAINPROPRIETARY AND AGENCY TRADES ON NYSE FLOOR; (B) SUBMISSIONOF CERTAIN AUDIT TRAIL TRADE DATA ELEMENTS; AND (C) ENTRY ANDCANCELLATION OFMOC AND LOC ORDERS - CONSENT TO CENSURE AND$350,000 FINE.


Decision






**6/23/08**DECISION NO. 08-36 ISSUED BY NYSE HEARING BOARD.DECISION: DURING THE PERIOD OF JUNE 30, 2004 THROUGH DECEMBER31, 2007, CREDIT SUISSE SECURITIES (USA) LLCVIOLATED NYSE RULE 92(A) BY ENTERING ORDER TO BUY (SELL) NYSE-LISTED SECURITY WHILE KNOWINGLY IN POSSESSION OF CUSTOMERORDER TO BUY (SELL) SUCH SECURITY, WHICH COULD BE EXECUTED ATSAME PRICE; VIOLATED NYSE RULE 401 BY FAILING TO ADEQUATELYDOCUMENT WHETHER IT HAD OBTAINED CUSTOMER'SPERMISSION TO TRADE ALONG WITH CUSTOMER'S ORDER; VIOLATEDNYSE RULE 410(B) BY ALLOWING PROPRIETARY ORDERS THAT COULDONLY HAVE BEEN PROPERLY EXECUTED PURSUANT TO SECTIONL1(A)(I)(G) OF SECURITIES EXCHANGE ACT OF 1934 TO BE TRANSMITTEDTO NYSE FLOOR WITHOUT BEING IDENTIFIED IN MANNER THAT WOULDENABLE ORDER TO BE HANDLED PURSUANT TO REQUIREMENTS OFEXCHANGE ACT SECTION L1(A)(I)(G); VIOLATED SECTION L1(A)(I) OFEXCHANGE ACT AND NYSE RULE 90 BY EXECUTING ORDERS BY FIRM'SFLOOR BROKERS ON FLOOR FOR ACCOUNT IN WHICH FIRM HADINTEREST WITHOUT SUCH ORDERS MEETING REQUIREMENTS OFSTATUTORY EXEMPTION; VIOLATED NYSE RULE 123C BY FAILING TOCOMPLY WITH REQUIREMENTS GOVERNING ENTRY AND CANCELLATIONOF MOC AND LOC ORDERS; VIOLATED NYSE RULE 132 BY SUBMITTINGTRADES TO COMPARISON AND CLEARANCE WITH INACCURATE ACCOUNTTYPE INDICATORS OR OTHER AUDIT TRAIL DATA OR WITHOUT REQUIREDAUDIT TRAIL DATA; VIOLATED NYSE RULE 476(A)(8) BY PURCHASE ANDSALE OF SECURITIES, EXECUTION OF WHICH INVOLVED NO CHANGE OFBENEFICIAL OWNERSHIP; VIOLATED NYSE RULE 342 BY FAILING TOREASONABLY SUPERVISE AND IMPLEMENT ADEQUATE CONTROLS,INCLUDING SEPARATE SYSTEM OF FOLLOW UP AND REVIEW,REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH NYSE RULESWITH RESPECT TO (A) TRANSMISSION AND EXECUTION OF CERTAINPROPRIETARY AND AGENCY TRADES ON NYSE FLOOR; (B) SUBMISSIONOF CERTAIN AUDIT TRAIL TRADE DATA ELEMENTS; AND (C) ENTRY ANDCANCELLATION OFMOC AND LOC ORDERS - CONSENT TO CENSURE AND$350,000 FINE.

Regulator Statement **7/23/08** THE DECISION BECAME FINAL AS OF THE CLOSE OF BUSINESSON JULY 18, 2008. THE FINE BECAME PAYABLE ON THAT SAME DATE.


Allegations: WITHOUT ADMITTING OR DENYING ANY ALLEGATIONS OR FINDINGSREFERRED TO HEREIN, CSSU STIPULATED THAT DURING THE PERIOD OFJUNE 30, 2004 THROUGH DECEMBER 31, 2007, IT 1. VIOLATED NYSE RULE92(A) BY, ON FOUR OCCASIONS, ENTERING AN ORDER TO BUY (SELL) ANNYSE-LISTED SECURITY WHILE KNOWINGLY IN POSSESSION OF ACUSTOMER ORDER TO BUY (SELL) SUCH SECURITY, WHICH COULD BEEXECUTED AT THE SAME PRICE. [JANUARY 20, 2005 THROUGH DECEMBER31, 2007 ONLY] 2. VIOLATED NYSE RULE 401, ON 11 OCCASIONS, IN THAT ITFAILED TO CONDUCT ITS BUSINESS AFFAIRS IN ACCORDANCE WITHPRINCIPLES OF GOOD BUSINESS PRACTICE BY FAILING TO ADEQUATELYDOCUMENT WHETHER IT HAD OBTAINED ITS CUSTOMER'S PERMISSIONTO TRADE ALONG WITH THE CUSTOMER'S ORDER. [JANUARY 20, 2005THROUGH DECEMBER 31, 2007 ONLY] 3. VIOLATED NYSE RULE 410(B), INTHAT THE FIRM, ON SIX OCCASIONS, ALLOWED PROPRIETARY ORDERSTHAT COULD ONLY HAVE BEEN PROPERLY EXECUTED PURSUANT TOSECTION 11(A)(1)(G) OF THE SECURITIES EXCHANGE ACT OF 1934("EXCHANGE ACT") TO BE TRANSMITTED TO THE NYSE FLOOR WITHOUTBEING IDENTIFIED IN A MANNER THAT WOULD ENABLE THE ORDER TO BEHANDLED PURSUANT TO THE REQUIREMENTS OF EXCHANGE ACTSECTION 11(A)(1)(G). [JANUARY 20, 2005 THROUGH DECEMBER 31, 2007ONLY] 4. VIOLATED SECTION 11(A)(1) OF THE EXCHANGE ACT AND NYSERULE 90 IN THAT, ON FOUR OCCASIONS, ORDERS WERE EXECUTED BYTHE FIRM'S FLOOR BROKERS ON THE NYSE FLOOR FOR AN ACCOUNT INWHICH THE FIRM HAD AN INTEREST WITHOUT SUCH ORDERS MEETINGTHE REQUIREMENTS OF A STATUTORY EXEMPTION. [JANUARY 20, 2005THROUGH DECEMBER 31, 2007 ONLY] **CONTINUED ON #13C**














WITHOUT ADMITTING OR DENYING ANY ALLEGATIONS OR FINDINGSREFERRED TO HEREIN, CSSU STIPULATED THAT DURING THE PERIOD OFJUNE 30, 2004 THROUGH DECEMBER 31, 2007, IT 1. VIOLATED NYSE RULE92(A) BY, ON FOUR OCCASIONS, ENTERING AN ORDER TO BUY (SELL) ANNYSE-LISTED SECURITY WHILE KNOWINGLY IN POSSESSION OF ACUSTOMER ORDER TO BUY (SELL) SUCH SECURITY, WHICH COULD BEEXECUTED AT THE SAME PRICE. [JANUARY 20, 2005 THROUGH DECEMBER31, 2007 ONLY] 2. VIOLATED NYSE RULE 401, ON 11 OCCASIONS, IN THAT ITFAILED TO CONDUCT ITS BUSINESS AFFAIRS IN ACCORDANCE WITHPRINCIPLES OF GOOD BUSINESS PRACTICE BY FAILING TO ADEQUATELYDOCUMENT WHETHER IT HAD OBTAINED ITS CUSTOMER'S PERMISSIONTO TRADE ALONG WITH THE CUSTOMER'S ORDER. [JANUARY 20, 2005THROUGH DECEMBER 31, 2007 ONLY] 3. VIOLATED NYSE RULE 410(B), INTHAT THE FIRM, ON SIX OCCASIONS, ALLOWED PROPRIETARY ORDERSTHAT COULD ONLY HAVE BEEN PROPERLY EXECUTED PURSUANT TOSECTION 11(A)(1)(G) OF THE SECURITIES EXCHANGE ACT OF 1934("EXCHANGE ACT") TO BE TRANSMITTED TO THE NYSE FLOOR WITHOUTBEING IDENTIFIED IN A MANNER THAT WOULD ENABLE THE ORDER TO BEHANDLED PURSUANT TO THE REQUIREMENTS OF EXCHANGE ACTSECTION 11(A)(1)(G). [JANUARY 20, 2005 THROUGH DECEMBER 31, 2007ONLY] 4. VIOLATED SECTION 11(A)(1) OF THE EXCHANGE ACT AND NYSERULE 90 IN THAT, ON FOUR OCCASIONS, ORDERS WERE EXECUTED BYTHE FIRM'S FLOOR BROKERS ON THE NYSE FLOOR FOR AN ACCOUNT INWHICH THE FIRM HAD AN INTEREST WITHOUT SUCH ORDERS MEETINGTHE REQUIREMENTS OF A STATUTORY EXEMPTION. [JANUARY 20, 2005THROUGH DECEMBER 31, 2007 ONLY] **CONTINUED ON #13C**


Resolution:


Sanction Details: **6/23/08**DECISION NO. 08-36 ISSUED BY NYSE HEARING BOARD.DECISION: DURING THE PERIOD OF JUNE 30, 2004 THROUGH DECEMBER31, 2007, CREDIT SUISSE SECURITIES (USA) LLC VIOLATED NYSE RULE92(A) BY ENTERING ORDER TO BUY (SELL) NYSE-LISTED SECURITY WHILEKNOWINGLY IN POSSESSION OF CUSTOMER ORDER TO BUY (SELL) SUCHSECURITY, WHICH COULD BE EXECUTED AT SAME PRICE; VIOLATED NYSERULE 401 BY FAILING TO ADEQUATELY DOCUMENT WHETHER IT HADOBTAINED CUSTOMER'S PERMISSION TO TRADE ALONG WITHCUSTOMER'S ORDER; VIOLATED NYSE RULE 410(B) BY ALLOWINGPROPRIETARY ORDERS THAT COULD ONLY HAVE BEEN PROPERLYEXECUTED PURSUANT TO SECTION L1(A)(I)(G) OF SECURITIES EXCHANGEACT OF 1934 TO BE TRANSMITTED TO NYSE FLOOR WITHOUT BEINGIDENTIFIED IN MANNER THAT WOULD ENABLE ORDER TO BE HANDLEDPURSUANT TO REQUIREMENTS OF EXCHANGE ACT SECTION L1(A)(I)(G);VIOLATED SECTION L1(A)(I) OF EXCHANGE ACT AND NYSE RULE 90 BYEXECUTING ORDERS BY FIRM'S FLOOR BROKERS ON FLOOR FORACCOUNT IN WHICH FIRM HAD INTEREST WITHOUT SUCH ORDERSMEETING REQUIREMENTS OF STATUTORY EXEMPTION; VIOLATED NYSERULE 123C BY FAILING TO COMPLY WITH REQUIREMENTS GOVERNINGENTRY AND CANCELLATION OF MOC AND LOC ORDERS; VIOLATED NYSERULE 132 BY SUBMITTING TRADES TO COMPARISON AND CLEARANCEWITH INACCURATE ACCOUNT TYPE INDICATORS OR OTHER AUDIT TRAILDATA OR WITHOUT REQUIRED AUDIT TRAIL DATA; VIOLATED NYSE RULE476(A)(8) BY PURCHASE AND SALE OF SECURITIES, EXECUTION OF WHICHINVOLVED NO CHANGE OF BENEFICIAL OWNERSHIP; VIOLATED NYSERULE 342 BY FAILING TO REASONABLY SUPERVISE AND IMPLEMENTADEQUATE CONTROLS, INCLUDING SEPARATE SYSTEM OF FOLLOW UPAND REVIEW, REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHNYSE RULES WITH RESPECT TO (A) TRANSMISSION AND EXECUTION OFCERTAIN PROPRIETARY AND AGENCY TRADES ON NYSE FLOOR; (B)SUBMISSION OF CERTAIN AUDIT TRAIL TRADE DATA ELEMENTS; AND (C)ENTRY AND CANCELLATION OFMOC AND LOC ORDERS - CONSENT TOCENSURE AND $350,000 FINE.


Decision






**6/23/08**DECISION NO. 08-36 ISSUED BY NYSE HEARING BOARD.DECISION: DURING THE PERIOD OF JUNE 30, 2004 THROUGH DECEMBER31, 2007, CREDIT SUISSE SECURITIES (USA) LLC VIOLATED NYSE RULE92(A) BY ENTERING ORDER TO BUY (SELL) NYSE-LISTED SECURITY WHILEKNOWINGLY IN POSSESSION OF CUSTOMER ORDER TO BUY (SELL) SUCHSECURITY, WHICH COULD BE EXECUTED AT SAME PRICE; VIOLATED NYSERULE 401 BY FAILING TO ADEQUATELY DOCUMENT WHETHER IT HADOBTAINED CUSTOMER'S PERMISSION TO TRADE ALONG WITHCUSTOMER'S ORDER; VIOLATED NYSE RULE 410(B) BY ALLOWINGPROPRIETARY ORDERS THAT COULD ONLY HAVE BEEN PROPERLYEXECUTED PURSUANT TO SECTION L1(A)(I)(G) OF SECURITIES EXCHANGEACT OF 1934 TO BE TRANSMITTED TO NYSE FLOOR WITHOUT BEINGIDENTIFIED IN MANNER THAT WOULD ENABLE ORDER TO BE HANDLEDPURSUANT TO REQUIREMENTS OF EXCHANGE ACT SECTION L1(A)(I)(G);VIOLATED SECTION L1(A)(I) OF EXCHANGE ACT AND NYSE RULE 90 BYEXECUTING ORDERS BY FIRM'S FLOOR BROKERS ON FLOOR FORACCOUNT IN WHICH FIRM HAD INTEREST WITHOUT SUCH ORDERSMEETING REQUIREMENTS OF STATUTORY EXEMPTION; VIOLATED NYSERULE 123C BY FAILING TO COMPLY WITH REQUIREMENTS GOVERNINGENTRY AND CANCELLATION OF MOC AND LOC ORDERS; VIOLATED NYSERULE 132 BY SUBMITTING TRADES TO COMPARISON AND CLEARANCEWITH INACCURATE ACCOUNT TYPE INDICATORS OR OTHER AUDIT TRAILDATA OR WITHOUT REQUIRED AUDIT TRAIL DATA; VIOLATED NYSE RULE476(A)(8) BY PURCHASE AND SALE OF SECURITIES, EXECUTION OF WHICHINVOLVED NO CHANGE OF BENEFICIAL OWNERSHIP; VIOLATED NYSERULE 342 BY FAILING TO REASONABLY SUPERVISE AND IMPLEMENTADEQUATE CONTROLS, INCLUDING SEPARATE SYSTEM OF FOLLOW UPAND REVIEW, REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHNYSE RULES WITH RESPECT TO (A) TRANSMISSION AND EXECUTION OFCERTAIN PROPRIETARY AND AGENCY TRADES ON NYSE FLOOR; (B)SUBMISSION OF CERTAIN AUDIT TRAIL TRADE DATA ELEMENTS; AND (C)ENTRY AND CANCELLATION OFMOC AND LOC ORDERS - CONSENT TOCENSURE AND $350,000 FINE.

Firm Statement WITHOUT ADMITTING OR DENYING ANY ALLEGATIONS THE FIRMCONSENTED TO CENSURE AND $350,000 FINE.


i



Allegations: **3/20/08** STIPULATION OF FACTS AND CONSENT TO PENALTYFILED BY NYSE REGULATION'S DIVISION OF ENFORCEMENT ANDPENDING. 1) VIOLATED NYSE RULE 123(E) AND NYSE RULE123(F) IN THAT ON THOUSANDS OF OCCASIONS THE FIRM FAILED TOPROVIDE CERTAIN REQUIRED DATA NEEDED TO LINK THE ENTRY OFORDERS WITH REPORTS OF EXECUTION IN THE FRONT END SYSTEMICCAPTURE SYSTEM; AND 2) VIOLATED NYSE RULE 342 IN THAT THE FIRMFAILED TO IMPLEMENT ADEQUATE CONTROLS, INCLUDING A SEPARATESYSTEM OF FOLLOW-UP AND REVIEW, REASONABLY DESIGNED TO FULLYREMEDIATE THE FIRM'S ORDER MANAGEMENT SYSTEM TO MEET NYSETECHNICAL SPECIFICATIONS IN A TIMELY MANNER AND THEREBYPREVENT VIOLATIONS OF NYSE RULE 123(E) AND NYSE RULE 123(F).STIPULATED SANCTION: CENSURE AND FINE IN THE AMOUNT OF$100,000.














Resolution:


Sanction Details: **3/24/08** DECISION NO. 08-16 ISSUED BY NYSE HEARINGBOARD. DECISION: VIOLATED NYSE RULES 123(E) AND 123(F) BYFAILING TO PROVIDE CERTAIN REQUIRED DATA NEEDED TO LINK ENTRYOF ORDERS WITH REPORTS OF EXECUTION IN FRONT END SYSTEMICCAPTURE SYSTEM; VIOLATED NYSE RULE 342 BY FAILING TO IMPLEMENTADEQUATE CONTROLS, INCLUDING SEPARATE SYSTEM OF FOLLOW-UPAND REVIEW,REASONABLY DESIGNED TO FULLY REMEDIATE FIRM'SORDER MANAGEMENT SYSTEM TO MEET NYSE TECHNICALSPECIFICATIONS IN TIMELY MANNER AND THEREBY PREVENT VIOLATIONSOF NYSE RULE 123(E) AND NYSE RULE 123(F) - CONSENT TO CENSUREAND $100,000 FINE.

Regulator Statement **4/29/08** THE DECISION BECAME FINAL AS OF THE CLOSE OF BUSINESSON APRIL 18, 2008 AND THE FINE BECAME PAYABLE ON THAT SAME DATE.


Decision


Allegations: THE NYSE ALLEGED THAT THE FIRM VIOLATED 1) NYSE RULE 123(E) ANDNYSE RULE 123(F)IN THAT IT FAILED TO PROVIDE CERTAIN REQUIREDDATA NEEDED TO LINK THE ENTRY OF ORDERS WITH REPORTS OFEXECUTION IN THE FRONT END SYSTEMIC CAPTURE SYSTEM; AND 2)VIOLATED NYSE RULE 342 IN THAT THE FIRM FAILED TO IMPLEMENTADEQUATE CONTROLS, INCLUDING A SEPARATE SYSTEM OF FOLLOW-UPAND REVIEW, REASONABLY DESIGNED TO FULLY REMEDIATE THE FIRM'SORDER MANAGEMENT SYSTEM TO MEET NYSE TECHNICALSPECIFICATIONS IN A TIMELY MANNER AND THEREBY PREVENTVIOLATIONS OF NYSE RULE 123(E) AND NYSE RULE 123(F).









Censure






THE NYSE ALLEGED THAT THE FIRM VIOLATED 1) NYSE RULE 123(E) ANDNYSE RULE 123(F)IN THAT IT FAILED TO PROVIDE CERTAIN REQUIREDDATA NEEDED TO LINK THE ENTRY OF ORDERS WITH REPORTS OFEXECUTION IN THE FRONT END SYSTEMIC CAPTURE SYSTEM; AND 2)VIOLATED NYSE RULE 342 IN THAT THE FIRM FAILED TO IMPLEMENTADEQUATE CONTROLS, INCLUDING A SEPARATE SYSTEM OF FOLLOW-UPAND REVIEW, REASONABLY DESIGNED TO FULLY REMEDIATE THE FIRM'SORDER MANAGEMENT SYSTEM TO MEET NYSE TECHNICALSPECIFICATIONS IN A TIMELY MANNER AND THEREBY PREVENTVIOLATIONS OF NYSE RULE 123(E) AND NYSE RULE 123(F).


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE IMPOSITION THE FIRM AGREED TOA CENSURE AND A FINE IN THE AMOUNT OF $100,000.


Decision


i


Allegations: **6/29/07**STIPULATION AND CONSENT TO PENALTY FILED BY NYSEREGULATION'S DIVISION OF ENFORCEMENT AND PENDING. CONSENTEDTO FINDINGS:WITHOUT ADMITTING OR DENYING GUILT, CREDIT SUISSESECURITIES (USA) LLC CONSENTS TO FINDINGS THAT IT VIOLATED:1.NYSE RULE 401(A) BY FAILING TO ADHERE TO THE PRINCIPLES OF GOODBUSINESS PRACTICE IN THAT THE FIRM FAILED TO ENSURE THE DELIVERYOF PROSPECTUSES IN CONNECTION WITH CERTAIN SALES OFREGISTERED SECURITIES IN VIOLATION OF SECTION 5(B)(2) OF THESECURITIES ACT OF 1933;2.NYSE RULE 1100(B) BY FAILING TO DELIVERPRODUCT DESCRIPTIONS TO CUSTOMERS THAT PURCHASED EXCHANGETRADED FUNDS; AND3. NYSE RULE 342 BY FAILING TO PROVIDE FOR, ESTABLISH AND MAINTAINAPPROPRIATE PROCEDURES OF SUPERVISION AND CONTROL INCLUDINGA SYSTEM OF FOLLOW-UP AND REVIEW, WITH RESPECT TO ITSOPERATIONAL AND TECHNOLOGICAL ACTIVITIES RELATING TO THEDELIVERY OF PRODUCT DESCRIPTIONS AND PROSPECTUSES.STIPULATED SANCTION:THE IMPOSITION BY THE NYSE OF:1. CENSURE;2. A FINE IN THE AMOUNT OF $500,000; AND3. AN UNDERTAKING TO PROVIDE ENFORCEMENT WITH A WRITTENCERTIFICATION THAT ITS CURRENT POLICIES AND PROCEDURES,INCLUDING WRITTEN SUPERVISORY AND OPERATIONAL POLICIES ANDPROCEDURES, REGARDING THE DELIVERY OF PROSPECTUSES ANDPRODUCT DESCRIPTIONS ARE REASONABLY DESIGNED TO ENSURECOMPLIANCE WITH THE FEDERAL SECURITIES LAWS AND NYSE RULESAPPLICABLE TO THE DELIVERY OF PROSPECTUSES AND PRODUCTDESCRIPTIONS. THE FIRM WILL PROVIDE ENFORCEMENT WITH THISWRITTEN CERTIFICATION WITHIN 90 DAYS FROM THE DATE THAT AHEARING PANEL DECISION IN THIS MATTER BECOMES FINAL.











Docket/Case Number: HPD 07-130



**6/29/07**STIPULATION AND CONSENT TO PENALTY FILED BY NYSEREGULATION'S DIVISION OF ENFORCEMENT AND PENDING. CONSENTEDTO FINDINGS:WITHOUT ADMITTING OR DENYING GUILT, CREDIT SUISSESECURITIES (USA) LLC CONSENTS TO FINDINGS THAT IT VIOLATED:1.NYSE RULE 401(A) BY FAILING TO ADHERE TO THE PRINCIPLES OF GOODBUSINESS PRACTICE IN THAT THE FIRM FAILED TO ENSURE THE DELIVERYOF PROSPECTUSES IN CONNECTION WITH CERTAIN SALES OFREGISTERED SECURITIES IN VIOLATION OF SECTION 5(B)(2) OF THESECURITIES ACT OF 1933;2.NYSE RULE 1100(B) BY FAILING TO DELIVERPRODUCT DESCRIPTIONS TO CUSTOMERS THAT PURCHASED EXCHANGETRADED FUNDS; AND3. NYSE RULE 342 BY FAILING TO PROVIDE FOR, ESTABLISH AND MAINTAINAPPROPRIATE PROCEDURES OF SUPERVISION AND CONTROL INCLUDINGA SYSTEM OF FOLLOW-UP AND REVIEW, WITH RESPECT TO ITSOPERATIONAL AND TECHNOLOGICAL ACTIVITIES RELATING TO THEDELIVERY OF PRODUCT DESCRIPTIONS AND PROSPECTUSES.STIPULATED SANCTION:THE IMPOSITION BY THE NYSE OF:1. CENSURE;2. A FINE IN THE AMOUNT OF $500,000; AND3. AN UNDERTAKING TO PROVIDE ENFORCEMENT WITH A WRITTENCERTIFICATION THAT ITS CURRENT POLICIES AND PROCEDURES,INCLUDING WRITTEN SUPERVISORY AND OPERATIONAL POLICIES ANDPROCEDURES, REGARDING THE DELIVERY OF PROSPECTUSES ANDPRODUCT DESCRIPTIONS ARE REASONABLY DESIGNED TO ENSURECOMPLIANCE WITH THE FEDERAL SECURITIES LAWS AND NYSE RULESAPPLICABLE TO THE DELIVERY OF PROSPECTUSES AND PRODUCTDESCRIPTIONS. THE FIRM WILL PROVIDE ENFORCEMENT WITH THISWRITTEN CERTIFICATION WITHIN 90 DAYS FROM THE DATE THAT AHEARING PANEL DECISION IN THIS MATTER BECOMES FINAL.


Resolution:

Other Sanctions Ordered: CONSENT TO CENSURE, $500,000 FINE AND UNDERTAKING.

Sanction Details: **9/7/07**DECISION 07-130 ISSUED BY NYSE HEARING BOARDDECISION: CREDIT SUISSE SECURITIES (USA) LLC CONSENTED TOFINDINGS THAT IT VIOLATED: 1. NYSE RULE 401(A) BY FAILING TO ADHERETO THE PRINCIPLES OF GOOD BUSINESS PRACTICE IN THAT THE FIRMFAILED TO ENSURE THE DELIVERY OF PROSPECTUSES IN CONNECTIONWITH CERTAIN SALES OF REGISTERED SECURITIES IN VIOLATION OFSECTION 5(B)(2) OF THE SECURITIES ACT OF 1933; 2. NYSE RULE 1100(B)BY FAILING TO DELIVER PRODUCT DESCRIPTIONS TO CUSTOMERS THATPURCHASED EXCHANGE TRADED FUNDS; AND 3. NYSE RULE 342 BYFAILING TO PROVIDE FOR, ESTABLISH AND MAINTAIN APPROPRIATEPROCEDURES OF SUPERVISION AND CONTROL INCLUDING A SYSTEM OFFOLLOW-UP AND REVIEW, WITH RESPECT TO ITS OPERATIONAL ANDTECHNOLOGICAL ACTIVITIES RELATING TO THE DELIVERY OF PRODUCTDESCRIPTIONS AND PROSPECTUSES. SANCTION: CENSURE, A $500,000FINE AND AN UNDERTAKING


Decision






**9/7/07**DECISION 07-130 ISSUED BY NYSE HEARING BOARDDECISION: CREDIT SUISSE SECURITIES (USA) LLC CONSENTED TOFINDINGS THAT IT VIOLATED: 1. NYSE RULE 401(A) BY FAILING TO ADHERETO THE PRINCIPLES OF GOOD BUSINESS PRACTICE IN THAT THE FIRMFAILED TO ENSURE THE DELIVERY OF PROSPECTUSES IN CONNECTIONWITH CERTAIN SALES OF REGISTERED SECURITIES IN VIOLATION OFSECTION 5(B)(2) OF THE SECURITIES ACT OF 1933; 2. NYSE RULE 1100(B)BY FAILING TO DELIVER PRODUCT DESCRIPTIONS TO CUSTOMERS THATPURCHASED EXCHANGE TRADED FUNDS; AND 3. NYSE RULE 342 BYFAILING TO PROVIDE FOR, ESTABLISH AND MAINTAIN APPROPRIATEPROCEDURES OF SUPERVISION AND CONTROL INCLUDING A SYSTEM OFFOLLOW-UP AND REVIEW, WITH RESPECT TO ITS OPERATIONAL ANDTECHNOLOGICAL ACTIVITIES RELATING TO THE DELIVERY OF PRODUCTDESCRIPTIONS AND PROSPECTUSES. SANCTION: CENSURE, A $500,000FINE AND AN UNDERTAKING

Regulator Statement **10/4/07** THE DECISION BECAME FINAL AS OF THE CLOSE OF BUSINESSON OCTOBER 2, 2007 AND THE FINE BECAME PAYABLE ON THAT SAMEDATE. CONTACT PEGGY GERMINO 212-656-8450.






CENSURE





Allegations: THE NYSE DIVISION OF ENFORCEMENT ALLEGED THAT CREDIT SUISSESECURITIES (USA) LLC VIOLATED NYSE RULE 104(A) IN THAT THE FIRMFAILED TO ENSURE THE DELIVERY OF PROSPECTUSES IN CONNECTIONWITH CERTAIN SALES OF REGISTERED SECURITIES; VIOLATED NYSERULE 1100(B) BY FAILING TO DELIVER PRODUCT DESCRIPTIONS TOCUSTOMERS AND VIOLATED NYSE RULE 342 BY FAILING TO PROVIDE FOR,ESTABLISH AND MAINTAIN APPROPRIATE PROCEDURES OF SUPERVISIONAND CONTROL RELATING TO THE DELIVERY OF PRODUCT DESCRIPTIONSAND PROSPECTUSES.



Resolution:

Other Sanctions Ordered: CONSENT TO CENSURE, $500,000 FINE AND UNDERTAKING.

Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS THE FIRM AGREEDTO A FINE IN THE AMOUNT OF $500,000 AND CENSURE.


Decision






WITHOUT ADMITTING OR DENYING THE ALLEGATIONS THE FIRM AGREEDTO A FINE IN THE AMOUNT OF $500,000 AND CENSURE.


i


Initiated By: NASD




Other Product Type(s): NASDAQ SECURITIES

Allegations: SEC RULES 10B-10, 604, NASD RULES 2110, 3010, 3350, 4632, 6130, 6130(B),6420, 6955, 6955(A), - CREDIT SUISSE SECURITIES (USA) LLC FAILED TODISPLAY IMMEDIATELY CUSTOMER LIMIT ORDERS IN NASDAQ SECURITIESIN ITS PUBLIC QUOTATION WHEN EACH SUCH OFFER WAS AT A PRICETHAT WOULD HAVE IMPROVED THE FIRM'S BID OR OFFER IN EACH SUCHSECURITY; OR WHEN THE ORDER WAS PRICED EQUAL TO THE FIRM'S BIDOR OFFER AND THE NATIONAL BEST BID OR OFFER FOR EACH SUCHSECURITY AND THE SIZE OF THE ORDER REPRESENTED MORE THAN A DEMINIMIS CHANGE IN RELATION TO THE SIZE ASSOCIATED WITH THE FIRM'SBID OR OFFER IN EACH SUCH SECURITY. THE FIRM EXECUTED SHORTSALE TRANSACTIONS IN CERTAIN SECURITIES, ALL OF WHICH WERENASDAQ NATIONAL MARKET SECURITIES, AT OR BELOW THE CURRENTINSIDE BID WHEN THE CURRENT INSIDE BID WAS BELOW THE PRECEDINGINSIDE BID IN THE SECURITY; ROUTED ORDERS TO ELECTRONICCOMMUNICATIONS NETWORKS (ECNS) FOR EXECUTION; THE RESULTINGSHORT SALE TRANSACTIONS WERE EXECUTED ON THE ECNS AT ORBELOW THE CURRENT INSIDE BID WHEN THE CURRENT INSIDE BID WASBELOW THE PRECEDING INSIDE BID IN THE SECURITY; AND FAILED TOMONITOR THE ECNS' COMPLIANCE WITH NASD RULE 3350 AS TO THEORDERS THAT THE FIRM ROUTED TO THE ECNS. THE FIRM'SSUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISIONREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLESECURITIES LAWS, REGULATIONS AND NASD RULES INCLUDING NASDMARKETPLACE RULE 6130(D)(6)(TRADE REPORT INPUT), NASD CONDUCTRULE 3350 (THE BID TEST), NASD CONDUCT RULES 3110(B)(1)(MARKINGOF CUSTOMER TICKETS) AND 3370 (AFFIRMATIVEDETERMINATIONS),TRADE REPORTING,SHORT SALES,BEST EXECUTION,SOFT DOLLAR ACCOUNTS AND TRADING, BOOKS AND RECORDS, ANDOATS. THE FIRM FAILED TO ACCEPT OR DECLINE IN THE NASDAQ MARKETCENTER TRANSACTIONS IN ELIGIBLE SECURITIES WITHIN 20 MINUTESAFTER EXECUTION THAT THE FIRM HAD AN OBLIGATION TO ACCEPT ORDECLINE AS THE ORDER ENTRY FIRM; [CONTINUED IN ITEM 14]












Resolution:



Regulator Statement THE FIRM PROVIDED WRTTEN NOTIFICATION TO ITS CUSTOMERS THATDISCLOSED AN INCORRECT CAPACITY IN THE TRANSACTION; THE FIRMTRANSMITTED TO OATS REPORTS THAT CONTAINED INACCURATE,INCOMPLETE OR IMPROPERLY FORMATTED DATA. THE FIRM FAILED TOCORRECTLY REPORT TO THE NASDAQ MARKET CENTER RISKLESSPRINCIPAL TRANSACTIONS IN NASDAQ SECURITIES; FAILED TO REPORTTO THE NASDAQ MARKET CENTER LAST SALE REPORTS OFTRANSACTIONS IN NASDAQ SECURITIES; SENT DUPLICATE MEDIAREPORTS OF AGENCY TRADES TO THE NASDAQ MARKET CENTER INNASDAQ SECURITIES; FAILED TO REPORT TO THE NASDAQ MARKETCENTER THE CORRECT SYMBOL INDICATING WHETHER IT EXECUTEDTRANSACTIONS IN ELIGIBLE SECURITIES IN A PRINCIPAL OR AGENCYCAPACITY; FAILED TO CORRECTLY REPORT TO THE NASDAQ MARKETCENTER ONE RISKLESS PRINCIPAL TRANSACTION IN ELIGIBLESECURITIES; PROVIDED WRITTEN NOTIFICATION TO ITS CUSTOMERSTHAT DISCLOSED AN INCORRECT CAPACITY IN TRANSACTIONS; AND/ORFAILED TO DOCUMENT THE CORRECT AVERAGE PRICE DISCLOSURE;AND/OR FAILED TO DOCUMENT THE MARKET MAKER DISCLOSURE.


No









Initiated By: NASD


Censure


FINE





Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, CREDIT SUISSEENTERED INTO AN AWC WITH THE NASD COVERING 6 INDIVIDUALINQUIRIES AND EXAMS DATING BACK TO 2003. SPECIFICALLY, THESETTLEMENT INVOLVED TRADE REPORTING ISSUES SUCH AS LIMITORDER DISPLAY, SHORT SALES, ACT AND OATS. IN ADDITION, THESETTLEMENT ALSO COVERED THE 2004 AND 2005 TRADING AND MARKETMAKING EXAMS.



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO A CENSURE AND A $110,000 FINE.




i


Allegations: WITHOUT ADMITTING OR DENYING THE CHARGES, RESPONDENTCONSENTED TO FINDINGS THAT IT VIOLATED PHLX RULE 707 FOR FAILINGTO EXERCISE DUE DILIGENCE IN HANDLING A CUSTOMER ORDER TOEXECUTE A 3000 X 4000 RATIO CALL SPREAD IN THE NASDAQ-100 INDEXTRACKING STOCK ("QQQ"). AFTER RESPONDENT SOLICITED A MARKETFROM THE QQQ TRADING CROWD AT THE CHICAGO BOARD OPTIONEXCHANGE, INC. ("CBOE") AND THE CROWD MADE A MARKET OF A NETCREDIT PRICE OF $3, RESPONDENT SUBSEQUENTLY ALLOWED THE RATIOCALL SPREAD TO BE TRADED AT THE EXCHANGE AT A NET CREDIT PRICEOF $2.90. A PORTION OF THE RATIO CALL SPREAD WAS CROSSED WITH ASOLICITED BROKER/DEALER ORDER. AS A RESULT, THE CUSTOMERORDER RECEIVED A LESS FAVORABLE PRICE ($30,000) THAN COULD HAVEBEEN OBTAINED AT THE CBOE.








Initiated By: PHILADELPHIA STOCK EXCHANGE




Docket/Case Number: ENFORCEMENT NUMBER 2002-03



WITHOUT ADMITTING OR DENYING THE CHARGES, RESPONDENTCONSENTED TO FINDINGS THAT IT VIOLATED PHLX RULE 707 FOR FAILINGTO EXERCISE DUE DILIGENCE IN HANDLING A CUSTOMER ORDER TOEXECUTE A 3000 X 4000 RATIO CALL SPREAD IN THE NASDAQ-100 INDEXTRACKING STOCK ("QQQ"). AFTER RESPONDENT SOLICITED A MARKETFROM THE QQQ TRADING CROWD AT THE CHICAGO BOARD OPTIONEXCHANGE, INC. ("CBOE") AND THE CROWD MADE A MARKET OF A NETCREDIT PRICE OF $3, RESPONDENT SUBSEQUENTLY ALLOWED THE RATIOCALL SPREAD TO BE TRADED AT THE EXCHANGE AT A NET CREDIT PRICEOF $2.90. A PORTION OF THE RATIO CALL SPREAD WAS CROSSED WITH ASOLICITED BROKER/DEALER ORDER. AS A RESULT, THE CUSTOMERORDER RECEIVED A LESS FAVORABLE PRICE ($30,000) THAN COULD HAVEBEEN OBTAINED AT THE CBOE.


Resolution:


Sanction Details: RESPONDENT AGREED TO THE FOLLOWING SANCTIONS: (I) A TOTAL FINEOF $75,000 TO BE PAID JOINTLY TO THE CBOE AND THE EXCHANGE; (II)RESTITUTION IN THE AMOUNT OF $30,000 TO THE CUSTOMER; (III)DISGORGEMENT OF $5,250 OF CERTAIN COMMISSIONS RESULTING FROMTHE TRANSACTION TO BE PAID JOINTLY TO THE CBOE AND THEEXCHANGE; (IV) A CENSURE; AND (V) RESPONDENT IS ORDERED TOCOMPLETE THE FOLLOWING UNDERTAKINGS: (1) PARTICIPATION IN ANEDUCATIONAL UNDERTAKING PURSUANT TO WHICH TRADERS INRESPONDENT'S EXCHANGE TRADED DERIVATIVES GROUP INCLUDINGANY FIRM TRADERS THAT CONDUCT OPTIONS DERIVATIVES BUSINESSWILL ATTEND AN EDUCATIONAL SESSION CONDUCTED BY RESPONDENT'SOUTSIDE LEGAL COUNSEL, THE CBOE AND PHLX; AND 2) SUBMISSION TOTHE CBOE AND PHLX A SEPARATE OPTIONS COMPLIANCE MANUAL WITHIN60 DAYS FROM THE ISSUANCE OF THE DECISION.


No








RESPONDENT AGREED TO THE FOLLOWING SANCTIONS: (I) A TOTAL FINEOF $75,000 TO BE PAID JOINTLY TO THE CBOE AND THE EXCHANGE; (II)RESTITUTION IN THE AMOUNT OF $30,000 TO THE CUSTOMER; (III)DISGORGEMENT OF $5,250 OF CERTAIN COMMISSIONS RESULTING FROMTHE TRANSACTION TO BE PAID JOINTLY TO THE CBOE AND THEEXCHANGE; (IV) A CENSURE; AND (V) RESPONDENT IS ORDERED TOCOMPLETE THE FOLLOWING UNDERTAKINGS: (1) PARTICIPATION IN ANEDUCATIONAL UNDERTAKING PURSUANT TO WHICH TRADERS INRESPONDENT'S EXCHANGE TRADED DERIVATIVES GROUP INCLUDINGANY FIRM TRADERS THAT CONDUCT OPTIONS DERIVATIVES BUSINESSWILL ATTEND AN EDUCATIONAL SESSION CONDUCTED BY RESPONDENT'SOUTSIDE LEGAL COUNSEL, THE CBOE AND PHLX; AND 2) SUBMISSION TOTHE CBOE AND PHLX A SEPARATE OPTIONS COMPLIANCE MANUAL WITHIN60 DAYS FROM THE ISSUANCE OF THE DECISION.






CENSURE, DISGORGEMENT


Docket/Case Number: ENFORCEMENT NUMBER 2002-03



Allegations: WITHOUT ADMITTING OR DENYING THE CHARGES, RESPONDENTCONSENTED TO FINDINGS THAT IT VIOLATED PHLX RULE 707 FOR FAILINGTO EXERCISE DUE DILIGENCE IN HANDLING A CUSTOMER ORDER TOEXECUTE A 3000 X 4000 RATIO CALL SPREAD IN THE NASDAQ-100 INDEXTRACKING STOCK ("QQQ"). AFTER RESPONDENT SOLICITED A MARKETFROM THE QQQ TRADING CROWD AT THE CHICAGO BOARD OPTIONEXCHANGE, INC. ("CBOE") AND THE CROWD MADE A MARKET OF A NETCREDIT PRICE OF $3, RESPONDENT SUBSEQUENTLY ALLOWED THE RATIOCALL SPREAD TO BE TRADED AT THE EXCHANGE AT A NET CREDIT PRICEOF $2.90. A PORTION OF THE RATIO CALL SPREAD WAS CROSSED WITH ASOLICITED BROKER/DEALER ORDER. AS A RESULT, THE CUSTOMERORDER RECEIVED A LESS FAVORABLE PRICE ($30,000) THAN COULD HAVEBEEN OBTAINED AT THE CBOE.



Resolution:


Sanction Details: RESPONDENT AGREED TO THE FOLLOWING SANCTIONS: (I) A TOTAL FINEOF $75,000 TO BE PAID JOINTLY TO THE CBOE AND THE EXCHANGE; (II)RESTITUTION IN THE AMOUNT OF $30,000 TO THE CUSTOMER; (III)DISGORGEMENT OF $5,250 OF CERTAIN COMMISSIONS RESULTING FROMTHE TRANSACTION TO BE PAID JOINTLY TO THE CBOE AND THEEXCHANGE; (IV) A CENSURE; AND (V) RESPONDENT IS ORDERED TOCOMPLETE THE FOLLOWING UNDERTAKINGS: (1) PARTICIPATION IN ANEDUCATIONAL UNDERTAKING PURSUANT TO WHICH TRADERS INRESPONDENT'S EXCHANGE TRADED DERIVATIVES GROUP INCLUDINGANY FIRM TRADERS THAT CONDUCT OPTIONS DERIVATIVES BUSINESSWILL ATTEND AN EDUCATIONAL SESSION CONDUCTED BY RESPONDENT'SOUTSIDE LEGAL COUNSEL, THE CBOE AND PHLX; AND 2) SUBMISSION TOTHE CBOE AND PHLX A SEPARATE OPTIONS COMPLIANCE MANUAL WITHIN60 DAYS FROM THE ISSUANCE OF THE DECISION.







www.finra.org/brokercheck User GuidanceRESPONDENT AGREED TO THE FOLLOWING SANCTIONS: (I) A TOTAL FINEOF $75,000 TO BE PAID JOINTLY TO THE CBOE AND THE EXCHANGE; (II)RESTITUTION IN THE AMOUNT OF $30,000 TO THE CUSTOMER; (III)DISGORGEMENT OF $5,250 OF CERTAIN COMMISSIONS RESULTING FROMTHE TRANSACTION TO BE PAID JOINTLY TO THE CBOE AND THEEXCHANGE; (IV) A CENSURE; AND (V) RESPONDENT IS ORDERED TOCOMPLETE THE FOLLOWING UNDERTAKINGS: (1) PARTICIPATION IN ANEDUCATIONAL UNDERTAKING PURSUANT TO WHICH TRADERS INRESPONDENT'S EXCHANGE TRADED DERIVATIVES GROUP INCLUDINGANY FIRM TRADERS THAT CONDUCT OPTIONS DERIVATIVES BUSINESSWILL ATTEND AN EDUCATIONAL SESSION CONDUCTED BY RESPONDENT'SOUTSIDE LEGAL COUNSEL, THE CBOE AND PHLX; AND 2) SUBMISSION TOTHE CBOE AND PHLX A SEPARATE OPTIONS COMPLIANCE MANUAL WITHIN60 DAYS FROM THE ISSUANCE OF THE DECISION.


i


Initiated By: NASD



Docket/Case Number: EAF0401490001



Allegations: NASD RULES 2110, 2711(H)(7) AND 2711(H) (10) AND 3010(A) - FROMFEBRUARY 2003 TO NOVEMBER 2005, CREDIT SUISSE REGULARLYPUBLISHED RESEARCH REPORTS THAT VIOLATED NASD RULES BY USINGVAGUE, GENERIC OR UNCLEAR LANGUAGE TO DESCRIBE ITS PRICETARGET VALUATION METHODS AND THE RISKS THAT MIGHT IMPEDEACHIEVEMENT OF THE PRICE TARGETS. IN CERTAIN RESEARCHREPORTS, THE FIRM USED GENERIC LISTS OF POSSIBLE VALUATIONMETHODS WITHOUT INDICATING WHICH METHOD WAS ACTUALLY TODETERMINED IN PART BY USING A PROPRIETARY VALUATION METHODWITHOUT FURTHER DESCRIBING THE VALUATION METHODS OR THEFACTORS CONSIDERED IN DETERMINING THE PRICE TARGET. IN OTHERPRICE TARGET DISCLOSURES, THE FIRM USED LANGUAGE THAT MADE ITDIFFICULT TO DISCERN THE VALUATION METHOD USED. THE FIRM'SDISCLOSURES CONCERNING RISKS THAT MIGHT THAT MIGHT IMPEDEACHIEVEMENT OF THE PRICE TARGET WERE COMPARABLY DEFICIENT.NASD WARNED THE FIRM THAT IT HAD CONCLUDED THAT THE FIRM'SRESEARCH DISCLOSURES FAILED TO COMPLY WITH NASD RULES, BUTTHE FIRM CONTINUED TO PUBLISH RESEARCH REPORTS CONTAININGDEFECTIVE DISCLOSURES. THE FIRM FAILED TO ENFORCE WRITTENSUPERVISORY PROCEDURES DESIGNED TO ENSURE COMPLIANCE WITHNASD RULES 2711(H)(7) AND 2711(H)(10).






https://www.finra.org/rules-guidance/oversight-enforcement/finra-disciplinary-actions?search=EAF0401490001





Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, CREDIT SUISSECONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS; THEREFORE THE FIRM IS CENSURED, FINED $225,000 AND THEFIRM SHALL UNDERTAKE TO REVIEW A MEANINGFUL SAMPLE OF ITSRESEARCH REPORTS AND DESCRIBE THE METHODOLOGY USED TOREVIEW THIS SAMPLE OF REPORTS AND CERTIFY IN WRITING TO NASDTHAT THE FIRM IS IN COMPLIANCE WITH NASD RULES 2711(H)(7) AND2711(H) (10) WITH RESPECT TO SUCH SAMPLE, INCLUDING THEREQUIREMENT THAT PRICE TARGET VALUATION METHODS AND RISKSTHAT MIGHT IMPEDE ACHIEVEMENT OF THE PRICE TARGET BE DISCLOSEDCLEAR, COMPREHENSIVE AND PROMINENT MANNER.


No




Initiated By: NASD

Allegations: THE NASD ALLEGED THAT CREDIT SUISSE SECURITIES (USA) LLCVIOLATED NASD RULES 2110, 2711(H)(7)AND 2711(H)(10)AND 3010(A)INTHAT FROM FEBRUARY 2003 TO NOVEMBER 2005, THE FIRM REGULARLYPUBLISHED RESEARCH REPORTS THAT VIOLATED NASD RULES BY USINGVAGUE, GENERIC OR UNCLEAR LANGUAGE TO DESCRIBE ITS PRICETARGET VALUATION METHODS AND THE RISKS THAT MIGHT IMPEDEACHIEVEMENT OF THE PRICE TARGETS. THE FIRM ALSO FAILED TOENFORCE WRITTEN SUPERVISORY PROCEDURES ESIGNED TO ENSURECOMPLIANCE WITH NASD RULES 2711(H)(7) AND 2711(H)(10).







Initiated By: NASD





Docket/Case Number: EAF0401490001




Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, CREDIT SUISSESECURITIES (USA) LLC CONSENTED TO THE DESCRIBED SANCTIONS ANDTO THE ENTRY OF FINDINGS; THEREFORE THE FIRM IS CENSURED, FINED$225,000 AND THE FIRM SHALL UNDERTAKE TO REVIEW A MEANINGFULSAMPLE OF ITS RESEARCH REPORTS AND DESCRIBE THE METHODOLOGYUSED TO REVIEW THIS SAMPLE OF REPORTS AND CERTIFY IN WRITING TONASD THAT THE FIRM IS IN COMPLIANCE WITH NASD RULES 2711(H)(7)AND 2711(H) (10) WITH RESPECT TO SUCH SAMPLE, INCLUDING THEREQUIREMENT THAT PRICE TARGET VALUATION METHODS AND RISKSTHAT MIGHT IMPEDE ACHIEVEMENT OF THE PRICE TARGET BE DISCLOSEDCLEAR, COMPREHENSIVE AND PROMINENT MANNER.




i


Initiated By: CHICAGO BOARD OF TRADE BUSINESS CONDUCT COMMITTEE


Docket/Case Number: 05-RFT-043


Allegations: THE CHICAGO BOARD OF TRADE SUBCOMMITTEE ALLEGED THAT THEFIRM VIOLATED REGULATION 332.08, IN THAT THE FIRM FAILED TO MAKEALL TRADE DATA SUBMISSIONS IN A CORRECT MANNER.






https://www.finra.org/rules-guidance/oversight-enforcement/finra-disciplinary-actions?search=EAF0401490001



Other


FINE




Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING ANY VIOLATION OF REGULATION332.08, CREDIT SUISSE SECURITIES (USA) LLC AGREED TO PAY A FINE OF$1,000.00 IN SETTLEMENT OF THIS MATTER.


Decision


i


Allegations: **6/22/06**STIPULATION AND CONSENT TO PENALTY FILED BY NYSEREGULATION DIVISION OF ENFORCEMENT AND PENDING. CONSENTED TOFINDINGS (WITHOUT ADMITTING OR DENYING GUILT):1.VIOLATED RULE203(B)(1) OF REGULATION SHO IN THAT IT ACCEPTED SHORT SALEORDERS AND EFFECTED THOSE ORDERS WITHOUT HAVING:A.BORROWED THE SECURITIES, OR ENTERED INTO BONA-FIDEARRANGEMENTS TO BORROW THE SECURITIES; OR B.REASONABLEGROUNDS TO BELIEVE THAT THE SECURITIES COULD BE BORROWED SOTHAT THEY COULD BE DELIVERED ON THE DATES DELIVERY WAS DUE.2.VIOLATED RULE 203(A) OF REGULATION SHO IN THAT IT EFFECTEDSALES PURSUANT TO ORDERS MARKED LONG WHEN IT DID NOT KNOWOR HAVE REASONABLE GROUNDS TO BELIEVE THAT IT:A.WOULD BE ABLE TO DELIVER THE SECURITY ON THE DATE THEDELIVERY WAS DUE; AND/OR B.THAT CUSTOMERS WERE NOTREPRESENTING SHORT SALES AS LONG SALES. 3.VIOLATED NYSE RULE342 IN THAT IT FAILED TO PROVIDE FOR APPROPRIATE PROCEDURES OFSUPERVISION AND CONTROL TO ASCERTAIN THAT:A.PRIOR TO EFFECTING CUSTOMER SHORT SALE ORDERS IT HADBORROWED THE SECURITIES, ENTERED INTO BONA-FIDEARRANGEMENTS TO BORROW THE SECURITIES, OR HAD REASONABLEGROUNDS TO BELIEVE THAT THE SECURITIES COULD BE BORROWED SOTHAT THEY COULD BE DELIVERED ON THE DATES DELIVERY WAS DUE.B.WHEN EFFECTING CUSTOMER SELL ORDERS MARKED LONG IT KNEWOR HAD REASONABLE GROUNDS TO BELIEVE THAT: I.IT WOULD BE ABLETO DELIVER THE SECURITY ON THE DATE THE DELIVERY WAS DUE; ANDII.SHORT SALES WERE NOT MISREPRESENTED AS LONG SALES.STIPULATED SANCTION: 1.CENSURE; AND 2.A FINE IN THE AMOUNT OF$250,000.











Docket/Case Number: HPD# 06-112



**6/22/06**STIPULATION AND CONSENT TO PENALTY FILED BY NYSEREGULATION DIVISION OF ENFORCEMENT AND PENDING. CONSENTED TOFINDINGS (WITHOUT ADMITTING OR DENYING GUILT):1.VIOLATED RULE203(B)(1) OF REGULATION SHO IN THAT IT ACCEPTED SHORT SALEORDERS AND EFFECTED THOSE ORDERS WITHOUT HAVING:A.BORROWED THE SECURITIES, OR ENTERED INTO BONA-FIDEARRANGEMENTS TO BORROW THE SECURITIES; OR B.REASONABLEGROUNDS TO BELIEVE THAT THE SECURITIES COULD BE BORROWED SOTHAT THEY COULD BE DELIVERED ON THE DATES DELIVERY WAS DUE.2.VIOLATED RULE 203(A) OF REGULATION SHO IN THAT IT EFFECTEDSALES PURSUANT TO ORDERS MARKED LONG WHEN IT DID NOT KNOWOR HAVE REASONABLE GROUNDS TO BELIEVE THAT IT:A.WOULD BE ABLE TO DELIVER THE SECURITY ON THE DATE THEDELIVERY WAS DUE; AND/OR B.THAT CUSTOMERS WERE NOTREPRESENTING SHORT SALES AS LONG SALES. 3.VIOLATED NYSE RULE342 IN THAT IT FAILED TO PROVIDE FOR APPROPRIATE PROCEDURES OFSUPERVISION AND CONTROL TO ASCERTAIN THAT:A.PRIOR TO EFFECTING CUSTOMER SHORT SALE ORDERS IT HADBORROWED THE SECURITIES, ENTERED INTO BONA-FIDEARRANGEMENTS TO BORROW THE SECURITIES, OR HAD REASONABLEGROUNDS TO BELIEVE THAT THE SECURITIES COULD BE BORROWED SOTHAT THEY COULD BE DELIVERED ON THE DATES DELIVERY WAS DUE.B.WHEN EFFECTING CUSTOMER SELL ORDERS MARKED LONG IT KNEWOR HAD REASONABLE GROUNDS TO BELIEVE THAT: I.IT WOULD BE ABLETO DELIVER THE SECURITY ON THE DATE THE DELIVERY WAS DUE; ANDII.SHORT SALES WERE NOT MISREPRESENTED AS LONG SALES.STIPULATED SANCTION: 1.CENSURE; AND 2.A FINE IN THE AMOUNT OF$250,000.


Resolution:


Sanction Details: **6/28/06**DECISION 06-112 ISSUED BY NYSE HEARING BOARDDECISION:VIOLATED RULE 203(B)(1) OF REGULATION SHO BY ACCEPTINGSHORT SALE ORDERS AND EFFECTING THOSE ORDERS WITHOUT HAVINGBORROWED SECURITIES OR ENTERED INTO BONA-FIDE ARRANGEMENTSTO BORROW THEM OR WITHOUT HAVING REASONABLE GROUNDS TOBELIEVE THAT SECURITIES COULD BE BORROWED SO THAT THEY COULDBE DELIVERED ON DATES DELIVERY WAS DUE; VIOLATED RULE 203(A) OFREGULATION SHO BY EFFECTING SALES PURSUANT TO ORDERS MARKEDLONG WHEN IT DID NOT KNOW OR HAVE REASONABLE GROUNDS TOBELIEVE THAT IT WOULD BE ABLE TO DELIVER THE SECURITY ON DATETHE DELIVERY WAS DUE OR THAT CUSTOMERS WERE NOTREPRESENTING SHORT SALES AS LONG SALES; VIOLATED NYSE RULE 342BY FAILING TO PROVIDE FOR APPROPRIATE PROCEDURES OFSUPERVISION AND CONTROL TO ASCERTAIN THAT PRIOR TO EFFECTINGCUSTOMER SHORT SALE ORDERS IT HAD BORROWED SECURITIES,ENTERED INTO BONA-FIDE ARRANGEMENTS TO BORROW THESECURITIES, OR HAD REASONABLE GROUNDS TO BELIEVE THAT THESECURITIES COULD BE BORROWED SO THAT THEY COULD BE DELIVEREDON THE DATES DELIVERY WAS DUE; AND WHEN EFFECTING CUSTOMERSELL ORDERS MARKED LONG IT KNEW OR HAD REASONABLE GROUNDSTO BELIEVE THAT IT WOULD BE ABLE TO DELIVER THE SECURITY ON THEDATE THE DELIVERY WAS DUE, AND SHORT SALES WERE NOTMISREPRESENTED AS LONG SALES.CONSENT TO CENSURE AND $250,000 FINE.


Decision






**6/28/06**DECISION 06-112 ISSUED BY NYSE HEARING BOARDDECISION:VIOLATED RULE 203(B)(1) OF REGULATION SHO BY ACCEPTINGSHORT SALE ORDERS AND EFFECTING THOSE ORDERS WITHOUT HAVINGBORROWED SECURITIES OR ENTERED INTO BONA-FIDE ARRANGEMENTSTO BORROW THEM OR WITHOUT HAVING REASONABLE GROUNDS TOBELIEVE THAT SECURITIES COULD BE BORROWED SO THAT THEY COULDBE DELIVERED ON DATES DELIVERY WAS DUE; VIOLATED RULE 203(A) OFREGULATION SHO BY EFFECTING SALES PURSUANT TO ORDERS MARKEDLONG WHEN IT DID NOT KNOW OR HAVE REASONABLE GROUNDS TOBELIEVE THAT IT WOULD BE ABLE TO DELIVER THE SECURITY ON DATETHE DELIVERY WAS DUE OR THAT CUSTOMERS WERE NOTREPRESENTING SHORT SALES AS LONG SALES; VIOLATED NYSE RULE 342BY FAILING TO PROVIDE FOR APPROPRIATE PROCEDURES OFSUPERVISION AND CONTROL TO ASCERTAIN THAT PRIOR TO EFFECTINGCUSTOMER SHORT SALE ORDERS IT HAD BORROWED SECURITIES,ENTERED INTO BONA-FIDE ARRANGEMENTS TO BORROW THESECURITIES, OR HAD REASONABLE GROUNDS TO BELIEVE THAT THESECURITIES COULD BE BORROWED SO THAT THEY COULD BE DELIVEREDON THE DATES DELIVERY WAS DUE; AND WHEN EFFECTING CUSTOMERSELL ORDERS MARKED LONG IT KNEW OR HAD REASONABLE GROUNDSTO BELIEVE THAT IT WOULD BE ABLE TO DELIVER THE SECURITY ON THEDATE THE DELIVERY WAS DUE, AND SHORT SALES WERE NOTMISREPRESENTED AS LONG SALES.CONSENT TO CENSURE AND $250,000 FINE.

Regulator Statement **7/5/06**THE DECISION IS NOW FINAL AND EFFECTIVEIMMEDIATELY.CONTACT: PEGGY GERMINO 212-656-8450






CENSURE


Docket/Case Number: HPD#06-112



Allegations: THE NYSE ALLEGED THAT CREDIT SUISSE SECURITIES LLC VIOLATEDRULE 203(B)(1) OF REGULATION SHO; VIOLATED RULE 203(A) OFREGULATION SHO; VIOLATED NYSE RULE 342 IN THAT IT FAILED TOPROVIDE FOR APPROPRIATE PROCEDURES OF SUPERVISION ANDCONTROL IN CONNECTION WITH EFFECTING CUSTOMER SHORT SALEORDERS.



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE IMPOSITION THE FIRM AGREED TOA CENSURE AND A FINE IN THE AMOUNT OF $250,000.


Decision


i















Allegations: **2/23/06** STIPULATION EXECUTED AND HEARING REQUESTEDVIOLATIONS: FAILED TO TRANSMIT TO ITS CUSTOMERS ACCURATEINFORMATION REGARDING PROXY SOLICITATIONS; SUBMITTED VOTESFOR MORE SHARES THAN IT WAS ENTITLED TO VOTE IN PROXY MATTERS;FAILED TO IMPLEMENT POLICIES AND PROCEDURES TO HAVE THETABULATOR ACCURATELY TALLY PROXY VOTES CAST BY ITS CUSTOMERS;SUBMITTED VOTES FOR MORE SHARES THAN IT WAS ENTITLED TO VOTEIN PROXY MATTERS; FAILED TO ASSURE ACCURATE SUBMISSION OFPROXY DATA TO TABULATORS; FAILED TO RECONCILE ITS RECORD OFSTOCK OWNERSHIP SO THAT VOTES BY CUSTOMERS WERE ACCURATELYTALLIED; FAILED TO SUPERVISE ITS OPERATIONS TO PREVENT OVER-VOTING, TO IMPLEMENT PROCEDURES FOR SUPERVISION OF THE PROXYFUNCTION AND FOR SUPERVISION OF THE PROXY SERVICE PROVIDER.STIPULATED SANCTION: CENSURE AND $250,000 FINE



Resolution:


Sanction Details: **4/18/06**DECISION 06-54 ISSUED BY NYSE HEARING PANELDECISION:CREDIT SUISSE SECURITIES (USA) LLC WAS FOUND GUILTYOF:1. VIOLATING NYSE RULE 451 IN THAT, ON NUMEROUS OCCASIONS, ITFAILED TO TRANSMIT TO ITS CUSTOMERS WHO WERE BENEFICIALOWNERS OF STOCK, VIA ITS SERVICE PROVIDER, ACCURATEINFORMATION IN CONNECTION WITH PROXY SOLICITATIONS.2. VIOLATING NYSE RULE 452, IN THAT, ON ONE OR MORE OCCASIONS, ITSUBMITTED VOTES FOR MORE SHARES THAN IT WAS ENTITLED TO VOTEIN PROXY MATTERS. 3. ENGAGED IN CONDUCT INCONSISTENT WITH JUSTAND EQUITABLE PRINCIPLES OF TRADE IN THAT IT: (A) FAILED TOIMPLEMENT ADEQUATE POLICIES AND PROCEDURES TO ADJUST ITSRECORD OF STOCK OWNERSHIP SO THAT VOTES OF ITS CUSTOMERSWHO WERE BENEFICIAL OWNERS OF STOCK WERE ACCURATELY TALLIEDBY THE TABULATOR FOR PROXY VOTING PURPOSES; (B) ON NUMEROUSOCCASIONS, SUBMITTED VOTES FOR MORE SHARES THAN IT WASENTITLED TO VOTE IN PROXY MATTERS; AND (C) FAILED TO ASSURE THATITS SYSTEMS AND PROCEDURES PROVIDED FOR THE ACCURATESUBMISSION OF PROXY DATA TO THE PROXY TABULATORS. 4. VIOLATINGNYSE RULE 401 BY FAILING TO ADHERE TO THE PRINCIPLES OF GOODBUSINESS PRACTICE IN THAT IT FAILED TO RECONCILE ITS RECORD OFSTOCK OWNERSHIP SO THAT VOTES OF BENEFICIAL OWNERS WEREACCURATELY TALLIED FOR PROXY VOTING PURPOSES, WHICH RESULTEDIN AN OVER-VOTE ON ONE OR MORE OCCASIONS. 5. VIOLATING NYSERULE 342 IN THAT THE FIRM FAILED TO: (A) SUPERVISE PROXYOPERATIONS TO PREVENT SUBMISSION OF VOTES FOR MORE SHARESTHAN IT WAS ENTITLED TO VOTE; (B) PROVIDE FOR AND IMPLEMENTWRITTEN PROCEDURES FOR PROXY OPERATIONS AND SUPERVISION OFTHE PROXY FUNCTION; AND (C) PROVIDE FOR AND IMPLEMENT WRITTENPROCEDURES FOR SUPERVISION OF ITS PROXY SERVICE PROVIDER.THE FIRM CONSENTED TO A CENSURE AND A $250,000 FINE.


Decision






**4/18/06**DECISION 06-54 ISSUED BY NYSE HEARING PANELDECISION:CREDIT SUISSE SECURITIES (USA) LLC WAS FOUND GUILTYOF:1. VIOLATING NYSE RULE 451 IN THAT, ON NUMEROUS OCCASIONS, ITFAILED TO TRANSMIT TO ITS CUSTOMERS WHO WERE BENEFICIALOWNERS OF STOCK, VIA ITS SERVICE PROVIDER, ACCURATEINFORMATION IN CONNECTION WITH PROXY SOLICITATIONS.2. VIOLATING NYSE RULE 452, IN THAT, ON ONE OR MORE OCCASIONS, ITSUBMITTED VOTES FOR MORE SHARES THAN IT WAS ENTITLED TO VOTEIN PROXY MATTERS. 3. ENGAGED IN CONDUCT INCONSISTENT WITH JUSTAND EQUITABLE PRINCIPLES OF TRADE IN THAT IT: (A) FAILED TOIMPLEMENT ADEQUATE POLICIES AND PROCEDURES TO ADJUST ITSRECORD OF STOCK OWNERSHIP SO THAT VOTES OF ITS CUSTOMERSWHO WERE BENEFICIAL OWNERS OF STOCK WERE ACCURATELY TALLIEDBY THE TABULATOR FOR PROXY VOTING PURPOSES; (B) ON NUMEROUSOCCASIONS, SUBMITTED VOTES FOR MORE SHARES THAN IT WASENTITLED TO VOTE IN PROXY MATTERS; AND (C) FAILED TO ASSURE THATITS SYSTEMS AND PROCEDURES PROVIDED FOR THE ACCURATESUBMISSION OF PROXY DATA TO THE PROXY TABULATORS. 4. VIOLATINGNYSE RULE 401 BY FAILING TO ADHERE TO THE PRINCIPLES OF GOODBUSINESS PRACTICE IN THAT IT FAILED TO RECONCILE ITS RECORD OFSTOCK OWNERSHIP SO THAT VOTES OF BENEFICIAL OWNERS WEREACCURATELY TALLIED FOR PROXY VOTING PURPOSES, WHICH RESULTEDIN AN OVER-VOTE ON ONE OR MORE OCCASIONS. 5. VIOLATING NYSERULE 342 IN THAT THE FIRM FAILED TO: (A) SUPERVISE PROXYOPERATIONS TO PREVENT SUBMISSION OF VOTES FOR MORE SHARESTHAN IT WAS ENTITLED TO VOTE; (B) PROVIDE FOR AND IMPLEMENTWRITTEN PROCEDURES FOR PROXY OPERATIONS AND SUPERVISION OFTHE PROXY FUNCTION; AND (C) PROVIDE FOR AND IMPLEMENT WRITTENPROCEDURES FOR SUPERVISION OF ITS PROXY SERVICE PROVIDER.THE FIRM CONSENTED TO A CENSURE AND A $250,000 FINE.

Regulator Statement **6/9/06**DECISON IS NOW FINAL AND EFFECTIVE IMMEDIATELY.CONTACT: PEGGY GERMINO 212-656-8450



Allegations: THE NYSE DIVISION OF ENFORCEMENT ALLEGED THAT CREDIT SUISSESECURITIES (USA) LLC FAILED TO TRANSMIT TO ITS CUSTOMERSACCURATE INFORMATION REGARDING PROXY SOLICITATIONS;SUBMITTED VOTES FOR MORE SHARES THAN IT WAS ENTITLED TO VOTEIN PROXY MATTERS; FAILED TO IMPLEMENT POLICIES AND PROCEDURESTO HAVE THE TABULATOR ACCURATELY TALLY PROXY VOTES CAST BY ITSCUSTOMERS; FAILED TO ASSURE ACCURATE SUBMISSION OF PROXYDATA TO TABULATORS; FAILED TO RECONCILE ITS RECORD OF STOCKOWNERSHIP SO THAT VOTES BY CUSTOMERS WERE ACCURATELYTALLIED; FAILED TO SUPERVISE ITS OPERATIONS TO PREVENT OVER-VOTING, TO IMPLEMENT PROCEDURES FOR SUPERVISION OF THE PROXYFUNCTION AND FOR SUPERVISION OF THE PROXY SERVICE PROVIDER.










CENSURE






Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, CREDIT SUISSESECURITIES (USA) LLC AGREED TO A CENSURE AND A FINE OF $250,000.


Decision


i


Allegations: NASD RULES 2110, 3010, 6230(A), 6230(B), 6230(E) -CREDIT SUISSE FIRSTBOSTON, LLC ACQUIRED A PRIVATE CLIENT SERVICES BUSINESS FROMANOTHER MEMBER FIRM THAT CONTINUED TO PROVIDE CLEARING,CUSTODY, AND TRACE REPORTING TO THE PRIVATE CLIENT SERVICESBUT NOT TO OTHER PARTS OF CREDIT SUISSE; THE PRIVATE CLIENTSERVICES TRADES WERE REPORTED TO TRACE UNDER A SEPARATEMARKET IDENTIFIER, FBPC. CREDIT SUISSE BECAME AWARE OF TRACEREPORTING DISCREPANCIES INVOLVING THE FBPC IDENTIFIER: FBPCFAILED TO REPORT TO TRACE TRANSACTIONS IN TRACE-ELIGIBLESECURITIES EXECUTED ON A BUSINESS DAY DURING TRACE SYSTEMHOURS WITHIN 45 MINUTES OF THE EXECUTION TIME; FBPC REGULARLYFAILED TO TIMELY REPORT OTHER TRADES TO TRACE; REPORTEDTRANSACTIONS IN TRACE-ELIGIBLE SECURITIES TO TRACE THAT IT WASNOT REQUIRED TO REPORT; REGULARLY FAILED TO REPORT TO TRACETRANSACTIONS IN TRACE-ELIGIBLE SECURITIES IT WAS REQUIRED TOREPORT; AND FBPC'S SUPERVISORY SYSTEM FAILED TO PROVIDE FORSUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHRESPECT TO APPLICABLE SECURITIES LAWS, REGULATIONS, AND NASDRULES CONCERNING TRACE REPORTING.







Initiated By: NASD






Other Product Type(s): TRACE-ELIGIBLE SECURITIES

NASD RULES 2110, 3010, 6230(A), 6230(B), 6230(E) -CREDIT SUISSE FIRSTBOSTON, LLC ACQUIRED A PRIVATE CLIENT SERVICES BUSINESS FROMANOTHER MEMBER FIRM THAT CONTINUED TO PROVIDE CLEARING,CUSTODY, AND TRACE REPORTING TO THE PRIVATE CLIENT SERVICESBUT NOT TO OTHER PARTS OF CREDIT SUISSE; THE PRIVATE CLIENTSERVICES TRADES WERE REPORTED TO TRACE UNDER A SEPARATEMARKET IDENTIFIER, FBPC. CREDIT SUISSE BECAME AWARE OF TRACEREPORTING DISCREPANCIES INVOLVING THE FBPC IDENTIFIER: FBPCFAILED TO REPORT TO TRACE TRANSACTIONS IN TRACE-ELIGIBLESECURITIES EXECUTED ON A BUSINESS DAY DURING TRACE SYSTEMHOURS WITHIN 45 MINUTES OF THE EXECUTION TIME; FBPC REGULARLYFAILED TO TIMELY REPORT OTHER TRADES TO TRACE; REPORTEDTRANSACTIONS IN TRACE-ELIGIBLE SECURITIES TO TRACE THAT IT WASNOT REQUIRED TO REPORT; REGULARLY FAILED TO REPORT TO TRACETRANSACTIONS IN TRACE-ELIGIBLE SECURITIES IT WAS REQUIRED TOREPORT; AND FBPC'S SUPERVISORY SYSTEM FAILED TO PROVIDE FORSUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHRESPECT TO APPLICABLE SECURITIES LAWS, REGULATIONS, AND NASDRULES CONCERNING TRACE REPORTING.


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, CREDIT SUISSEFIRST BOSTON CONSENTED TO THE DESCRIBED SANCTIONS AND TO THEENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED$60,000. THE FIRM HAS SUBMITTED REVISED WRITTEN SUPERVISORYPROCEDURES TO NASD.


No




Allegations: NASD RULES 2110, 3010, 6230(A), 6230(B), 6230(E) -CREDIT SUISSE FIRSTBOSTON, LLC ACQUIRED A PRIVATE CLIENT SERVICES BUSINESS FROMANOTHER MEMBER FIRM THAT CONTINUED TO PROVIDE CLEARING,CUSTODY, AND TRACE REPORTING TO THE PRIVATE CLIENT SERVICESBUT NOT TO OTHER PARTS OF CREDIT SUISSE; THE PRIVATE CLIENTSERVICES TRADES WERE REPORTED TO TRACE UNDER A SEPARATEMARKET IDENTIFIER, FBPC. CREDIT SUISSE BECAME AWARE OF TRACEREPORTING DISCREPANCIES INVOLVING THE FBPC IDENTIFIER: FBPCFAILED TO REPORT TO TRACE TRANSACTIONS IN TRACE-ELIGIBLESECURITIES EXECUTED ON A BUSINESS DAY DURING TRACE SYSTEMHOURS WITHIN 45 MINUTES OF THE EXECUTION TIME; FBPC REGULARLYFAILED TO TIMELY REPORT OTHER TRADES TO TRACE; REPORTEDTRANSACTIONS IN TRACE-ELIGIBLE SECURITIES TO TRACE THAT IT WASNOT REQUIRED TO REPORT; REGULARLY FAILED TO REPORT TO TRACETRANSACTIONS IN TRACE-ELIGIBLE SECURITIES IT WAS REQUIRED TOREPORT; AND FBPC'S SUPERVISORY SYSTEM FAILED TO PROVIDE FORSUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHRESPECT TO APPLICABLE SECURITIES LAWS, REGULATIONS, AND NASDRULES CONCERNING TRACE REPORTING.








Initiated By: NASD






Other Product Type(s): TRACE-ELIGIBLE SECURITIES

NASD RULES 2110, 3010, 6230(A), 6230(B), 6230(E) -CREDIT SUISSE FIRSTBOSTON, LLC ACQUIRED A PRIVATE CLIENT SERVICES BUSINESS FROMANOTHER MEMBER FIRM THAT CONTINUED TO PROVIDE CLEARING,CUSTODY, AND TRACE REPORTING TO THE PRIVATE CLIENT SERVICESBUT NOT TO OTHER PARTS OF CREDIT SUISSE; THE PRIVATE CLIENTSERVICES TRADES WERE REPORTED TO TRACE UNDER A SEPARATEMARKET IDENTIFIER, FBPC. CREDIT SUISSE BECAME AWARE OF TRACEREPORTING DISCREPANCIES INVOLVING THE FBPC IDENTIFIER: FBPCFAILED TO REPORT TO TRACE TRANSACTIONS IN TRACE-ELIGIBLESECURITIES EXECUTED ON A BUSINESS DAY DURING TRACE SYSTEMHOURS WITHIN 45 MINUTES OF THE EXECUTION TIME; FBPC REGULARLYFAILED TO TIMELY REPORT OTHER TRADES TO TRACE; REPORTEDTRANSACTIONS IN TRACE-ELIGIBLE SECURITIES TO TRACE THAT IT WASNOT REQUIRED TO REPORT; REGULARLY FAILED TO REPORT TO TRACETRANSACTIONS IN TRACE-ELIGIBLE SECURITIES IT WAS REQUIRED TOREPORT; AND FBPC'S SUPERVISORY SYSTEM FAILED TO PROVIDE FORSUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHRESPECT TO APPLICABLE SECURITIES LAWS, REGULATIONS, AND NASDRULES CONCERNING TRACE REPORTING.


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, CREDIT SUISSEFIRST BOSTON CONSENTED TO THE DESCRIBED SANCTIONS AND TO THEENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED$60,000. THE FIRM HAS SUBMITTED REVISED WRITTEN SUPERVISORYPROCEDURES TO NASD.




i


Allegations: **1/20/06**STIPULATION AND CONSENT TO PENALTY FILED BY NYSEDIVISION OF ENFORCEMENT AND PENDING CONSENTED TO FINDINGS:1.VIOLATED EXCHANGE RULE 410A BY FAILING TO SUBMIT ACCURATETRADING INFORMATION THROUGH THE SUBMISSION OF ELECTRONICBLUE SHEETS IN RESPONSE TO ONE OR MORE REQUESTS FOR SUCHINFORMATION BY THE EXCHANGE; 2. VIOLATED EXCHANGE RULE401 BY FAILING TO ADHERE TO THE PRINCIPLES OF GOOD BUSINESSPRACTICE IN THE CONDUCT OF THEIR BUSINESS AFFAIRS IN THAT ITSUBMITTED INACCURATE TRADING INFORMATION ON ELECTRONIC BLUESHEETS IN RESPONSE TO ONE OR MORE REQUESTS FOR SUCHINFORMATION BY THE EXCHANGE; AND 3.VIOLATED EXCHANGE RULES342 BY FAILING TO ESTABLISH AND MAINTAIN APPROPRIATE SYSTEMS ANDPROCEDURES FOR THE SUPERVISION AND CONTROL OF AREASRESPONSIBLE FOR COMPLYING WITH ELECTRONIC BLUE SHEETREPORTING REQUIREMENTS, AND FAILED TO ESTABLISH A SEPARATESYSTEM OF FOLLOW-UP AND REVIEW TO REASONABLY ENSURECOMPLIANCE WITH EXCHANGE RULES RELATING TO THE PREPARATIONAND SUBMISSION OF ELECTRONIC BLUE SHEETS. STIPULATEDSANCTION:THE IMPOSITION BY THE EXCHANGE OF A CENSURE, A $150,000FINE AND A REQUIREMENT THAT RESPONDENT WILL CONDUCT AVALIDATION OF ALL REQUIRED BLUE SHEET DATA ELEMENTS INACCORDANCE WITH ISG REGULATORY MEMORANDUM, ISG 2005-01.














Allegations: **1/20/06**STIPULATION AND CONSENT TO PENALTY FILED BY NYSEDIVISION OF ENFORCEMENT AND PENDING CONSENTED TO FINDINGS:1.VIOLATED EXCHANGE RULE 410A BY FAILING TO SUBMIT ACCURATETRADING INFORMATION THROUGH THE SUBMISSION OF ELECTRONICBLUE SHEETS IN RESPONSE TO ONE OR MORE REQUESTS FOR SUCHINFORMATION BY THE EXCHANGE; 2. VIOLATED EXCHANGE RULE401 BY FAILING TO ADHERE TO THE PRINCIPLES OF GOOD BUSINESSPRACTICE IN THE CONDUCT OF THEIR BUSINESS AFFAIRS IN THAT ITSUBMITTED INACCURATE TRADING INFORMATION ON ELECTRONIC BLUESHEETS IN RESPONSE TO ONE OR MORE REQUESTS FOR SUCHINFORMATION BY THE EXCHANGE; AND 3.VIOLATED EXCHANGE RULES342 BY FAILING TO ESTABLISH AND MAINTAIN APPROPRIATE SYSTEMS ANDPROCEDURES FOR THE SUPERVISION AND CONTROL OF AREASRESPONSIBLE FOR COMPLYING WITH ELECTRONIC BLUE SHEETREPORTING REQUIREMENTS, AND FAILED TO ESTABLISH A SEPARATESYSTEM OF FOLLOW-UP AND REVIEW TO REASONABLY ENSURECOMPLIANCE WITH EXCHANGE RULES RELATING TO THE PREPARATIONAND SUBMISSION OF ELECTRONIC BLUE SHEETS. STIPULATEDSANCTION:THE IMPOSITION BY THE EXCHANGE OF A CENSURE, A $150,000FINE AND A REQUIREMENT THAT RESPONDENT WILL CONDUCT AVALIDATION OF ALL REQUIRED BLUE SHEET DATA ELEMENTS INACCORDANCE WITH ISG REGULATORY MEMORANDUM, ISG 2005-01.


Resolution:


Sanction Details: **1/24/06**DECISION 06-014 ISSUED BY NYSE HEARING PANEL DECISION:VIOLATED NYSE RULE 410A BY FAILING TO SUBMIT ACCURATE TRADINGINFORMATION THROUGH THE SUBMISSION OF ELECTRONIC BLUESHEETS; VIOLATED NYSE RULE 401 BY SUBMITTING INACCURATETRADING INFORMATION ON ELECTRONIC BLUE SHEETS; VIOLATED NYSERULE 342 BY FAILING TO ESTABLISH AND MAINTAIN APPROPRIATESYSTEMS AND PROCEDURES FOR THE SUPERVISION AND CONTROL OFAREAS RESPONSIBLE FOR COMPLYING WITH ELECTRONIC BLUE SHEETREPORTING REQUIREMENTS AND FAILING TO ESTABLISH A SEPARATESYSTEM OF FOLLOW-UP AND REVIEW TO REASONABLY ENSURECOMPLIANCE WITH NYSE RULES RELATING TO THE PREPARATION ANDSUBMISSION OF ELECTRONIC BLUE SHEETS. -CONSENT TO CENSURE,FINE OF $150,000, AND A REQUIREMENT TO CONDUCT VALIDATION OF ALLREQUIRED BLUE SHEET DATA ELEMENTS, AND UNDERTAKING TO INFORMNYSE IN WRITING THAT VALIDATION HAS BEEN COMPLETED.


Decision






**1/24/06**DECISION 06-014 ISSUED BY NYSE HEARING PANEL DECISION:VIOLATED NYSE RULE 410A BY FAILING TO SUBMIT ACCURATE TRADINGINFORMATION THROUGH THE SUBMISSION OF ELECTRONIC BLUESHEETS; VIOLATED NYSE RULE 401 BY SUBMITTING INACCURATETRADING INFORMATION ON ELECTRONIC BLUE SHEETS; VIOLATED NYSERULE 342 BY FAILING TO ESTABLISH AND MAINTAIN APPROPRIATESYSTEMS AND PROCEDURES FOR THE SUPERVISION AND CONTROL OFAREAS RESPONSIBLE FOR COMPLYING WITH ELECTRONIC BLUE SHEETREPORTING REQUIREMENTS AND FAILING TO ESTABLISH A SEPARATESYSTEM OF FOLLOW-UP AND REVIEW TO REASONABLY ENSURECOMPLIANCE WITH NYSE RULES RELATING TO THE PREPARATION ANDSUBMISSION OF ELECTRONIC BLUE SHEETS. -CONSENT TO CENSURE,FINE OF $150,000, AND A REQUIREMENT TO CONDUCT VALIDATION OF ALLREQUIRED BLUE SHEET DATA ELEMENTS, AND UNDERTAKING TO INFORMNYSE IN WRITING THAT VALIDATION HAS BEEN COMPLETED.

Regulator Statement **2/28/06**THE DECISION IS NOW FINAL AND EFFECTIVE IMMEDIATELY.CONTACT: PEGGY GERMINO 212-656-8450





Allegations: THE NYSE DIVISION OF ENFORCEMENT FILED A STIPULATION OF FACTSAND CONSENT TO PENALTY AND CONSENTED TO THE FOLLOWINGFINDINGS: 1.VIOLATED EXCHANGE RULE 410A BY FAILING TO SUBMITACCURATE TRADING INFORMATION THROUGH THE SUBMISSION OFELECTRONIC BLUE SHEETS IN RESPONSE TO ONE OR MORE REQUESTSFOR SUCH INFORMATION BY THE EXCHANGE; 2.VIOLATED EXCHANGERULE 401 BY FAILING TO ADHERE TO THE PRINCIPLES OF GOODBUSINESS PRACTICE IN THE CONDUCT OF THEIR BUSINESS AFFAIRS INTHAT IT SUBMITTED INACCURATE TRADING INFORMATION ONELECTRONIC BLUE SHEETS IN RESPONSE TO ONE OR MORE REQUESTSFOR SUCH INFORMATION BY THE EXCHANGE; AND 3.VIOLATED EXCHANGERULES 342 BY FAILING TO ESTABLISH AND MAINTAIN APPROPRIATESYSTEMS AND PROCEDURES FOR THE SUPERVISION AND CONTROL OFAREAS RESPONSIBLE FOR COMPLYING WITH ELECTRONIC BLUE SHEETREPORTING REQUIREMENTS, AND FAILED TO ESTABLISH A SEPARATESYSTEM OF FOLLOW-UP AND REVIEW TO REASONABLY ENSURECOMPLIANCE WITH EXCHANGE RULES RELATING TO THE PREPARATIONAND SUBMISSION OF ELECTRONIC BLUE SHEETS. STIPULATEDSANCTION:THE IMPOSITION BY THE EXCHANGE OF A CENSURE, A $150,000FINE AND A REQUIREMENT THAT RESPONDENT WILL CONDUCT AVALIDATION OF ALL REQUIRED BLUE SHEET DATA ELEMENTS INACCORDANCE WITH ISG REGULATORY MEMORANDUM, ISG 2005-01.








Censure


FINE



Other Product Type(s): NYSE ELECTRONIC BLUE SHEETS


Resolution:


Sanction Details: **1/24/06**DECISION 06-014 ISSUED BY NYSE HEARING PANEL DECISION:VIOLATED NYSE RULE 410A BY FAILING TO SUBMIT ACCURATE TRADINGINFORMATION THROUGH THE SUBMISSION OF ELECTRONIC BLUESHEETS; VIOLATED NYSE RULE 401 BY SUBMITTING INACCURATETRADING INFORMATION ON ELECTRONIC BLUE SHEETS; VIOLATED NYSERULE 342 BY FAILING TO ESTABLISH AND MAINTAIN APPROPRIATESYSTEMS AND PROCEDURES FOR THE SUPERVISION AND CONTROL OFAREAS RESPONSIBLE FOR COMPLYING WITH ELECTRONIC BLUE SHEETREPORTING REQUIREMENTS AND FAILING TO ESTABLISH A SEPARATESYSTEM OF FOLLOW-UP AND REVIEW TO REASONABLY ENSURECOMPLIANCE WITH NYSE RULES RELATING TO THE PREPARATION ANDSUBMISSION OF ELECTRONIC BLUE SHEETS. -CONSENT TO CENSURE,FINE OF $150,000, AND A REQUIREMENT TO CONDUCT VALIDATION OF ALLREQUIRED BLUE SHEET DATA ELEMENTS, AND UNDERTAKING TO INFORMNYSE IN WRITING THAT VALIDATION HAS BEEN COMPLETED.


Decision


i


Allegations: **12/6/05**STIPULATION AND CONSENT TO PENALTY FILED BY NYSEDIVISION OF ENFORCEMENT AND PENDING CONSENTED TO FINDINGSTHAT IT:A.1.VIOLATED SECTION 17(A) OF THE SECURITIES EXCHANGE ACTOF 1934("EXCHANGE ACT") AND RULES 17A-3 AND 17A-4 THEREUNDERAND EXCHANGE RULE 440 BY FAILING TO MAKE AND/OR MAINTAIN:ACCURATE AND COMPLETE RECORDS OF RECONCILIATION OF SUSPENSEACCOUNT FUNDS AND COPIES OF EMPLOYEE INTERNAL ACCOUNTTRADING REPORTS.2.VIOLATED EXCHANGE RULE 342 IN THAT THE FIRMFAILED TO PROVIDE FOR, ESTABLISH, AND MAINTAIN ADEQUATEPROCEDURES AND CONTROLS, INCLUDING A SYSTEM OF FOLLOW-UP ANDREVIEW OF CERTAIN BUSINESS ACTIVITIES IN ORDER TO ENSURECOMPLIANCE WITH EXCHANGE AND FEDERAL LAWS REGARDING: I.)WIREFUND TRANSFERS FROM SUSPENSE ACCOUNTS; II.)DOCUMENTATIONPERTAINING TO MOVEMENT OF FUNDS FROM SUSPENSE ACCOUNTS, ANDIII.)APPROVAL AND REVIEW OF EMPLOYEE TRADING ACCOUNTS HELDOUTSIDE THE FIRM IN VIOLATION EXCHANGE RULE 407.B.THE IMPOSITIONBY THE EXCHANGE OF THE PENALTY OF:1.A CENSURE; AND 2.A FINE OF$200,000.














**12/6/05**STIPULATION AND CONSENT TO PENALTY FILED BY NYSEDIVISION OF ENFORCEMENT AND PENDING CONSENTED TO FINDINGSTHAT IT:A.1.VIOLATED SECTION 17(A) OF THE SECURITIES EXCHANGE ACTOF 1934("EXCHANGE ACT") AND RULES 17A-3 AND 17A-4 THEREUNDERAND EXCHANGE RULE 440 BY FAILING TO MAKE AND/OR MAINTAIN:ACCURATE AND COMPLETE RECORDS OF RECONCILIATION OF SUSPENSEACCOUNT FUNDS AND COPIES OF EMPLOYEE INTERNAL ACCOUNTTRADING REPORTS.2.VIOLATED EXCHANGE RULE 342 IN THAT THE FIRMFAILED TO PROVIDE FOR, ESTABLISH, AND MAINTAIN ADEQUATEPROCEDURES AND CONTROLS, INCLUDING A SYSTEM OF FOLLOW-UP ANDREVIEW OF CERTAIN BUSINESS ACTIVITIES IN ORDER TO ENSURECOMPLIANCE WITH EXCHANGE AND FEDERAL LAWS REGARDING: I.)WIREFUND TRANSFERS FROM SUSPENSE ACCOUNTS; II.)DOCUMENTATIONPERTAINING TO MOVEMENT OF FUNDS FROM SUSPENSE ACCOUNTS, ANDIII.)APPROVAL AND REVIEW OF EMPLOYEE TRADING ACCOUNTS HELDOUTSIDE THE FIRM IN VIOLATION EXCHANGE RULE 407.B.THE IMPOSITIONBY THE EXCHANGE OF THE PENALTY OF:1.A CENSURE; AND 2.A FINE OF$200,000.


Resolution:


Sanction Details: **5/19/06**DECISION 06-16 ISSUED BY NYSE HEARING PANELDECISION: VIOLATED SECTION 17(A) OF SECURITIES EXCHANGE ACT OF1934 AND RULES 17A-3 AND 17A-4 THEREUNDER AND NYSE RULE 440 BYFAILING TO MAKE AND/OR MAINTAIN ACCURATE AND COMPLETERECORDS OF RECONCILIATION OF SUSPENSE ACCOUNT FUNDS ANDCOPIES OF EMPLOYEE INTERNAL ACCOUNT TRADING REPORTS;VIOLATED NYSE RULE 342 BY FAILING TO PROVIDE FOR, ESTABLISH, ANDMAINTAIN ADEQUATE PROCEDURES AND CONTROLS, INCLUDING SYSTEMOF FOLLOW-UP AND REVIEW OF CERTAIN BUSINESS ACTIVITIES IN ORDERTO ENSURE COMPLIANCE WITH NYSE RULES AND FEDERAL LAWSREGARDING WIRE-FUND TRANSFERS FORM SUSPENSE ACCOUNTS,DOCUMENTATION PERTAINING TO MOVEMENT OF FUNDS FROMSUSPENSE ACCOUNTS, AND APPROVAL AND REVIEW OF EMPLOYEE-TRADING ACCOUNTS HELD OUTSIDE FIRM IN VIOLATION OF NYSE RULE407 CONSENT TO CENSURE AND $200,000 FINE.


Decision






**5/19/06**DECISION 06-16 ISSUED BY NYSE HEARING PANELDECISION: VIOLATED SECTION 17(A) OF SECURITIES EXCHANGE ACT OF1934 AND RULES 17A-3 AND 17A-4 THEREUNDER AND NYSE RULE 440 BYFAILING TO MAKE AND/OR MAINTAIN ACCURATE AND COMPLETERECORDS OF RECONCILIATION OF SUSPENSE ACCOUNT FUNDS ANDCOPIES OF EMPLOYEE INTERNAL ACCOUNT TRADING REPORTS;VIOLATED NYSE RULE 342 BY FAILING TO PROVIDE FOR, ESTABLISH, ANDMAINTAIN ADEQUATE PROCEDURES AND CONTROLS, INCLUDING SYSTEMOF FOLLOW-UP AND REVIEW OF CERTAIN BUSINESS ACTIVITIES IN ORDERTO ENSURE COMPLIANCE WITH NYSE RULES AND FEDERAL LAWSREGARDING WIRE-FUND TRANSFERS FORM SUSPENSE ACCOUNTS,DOCUMENTATION PERTAINING TO MOVEMENT OF FUNDS FROMSUSPENSE ACCOUNTS, AND APPROVAL AND REVIEW OF EMPLOYEE-TRADING ACCOUNTS HELD OUTSIDE FIRM IN VIOLATION OF NYSE RULE407 CONSENT TO CENSURE AND $200,000 FINE.

Regulator Statement **7/6/06**DECISION IS NOW FINAL AND EFFECTIVE IMMEDIATELY.CONTACT: PEGGY GERMINO 212-656-8450






CENSURE





Allegations: THE NYSE DIVISION OF ENFORCEMENT ALLEGED THAT CREDIT SUISSESECURITIES (USA) LLC (AS THE SUCCESSOR-IN-INTEREST TODONALDSON LUFKIN & JENRETTE SECURITIES CORP.) VIOLATED: 1.SECTION 17(A) OF THE SECURITIES EXCHANGE ACT OF 1934("EXCHANGEACT") AND RULES 17A-3 AND 17A-4 THEREUNDER AND EXCHANGE RULE440 BY FAILING TO MAKE AND/OR MAINTAIN: ACCURATE AND COMPLETERECORDS OF RECONCILIATION OF SUSPENSE ACCOUNT FUNDS ANDCOPIES OF EMPLOYEE INTERNAL ACCOUNT TRADINGREPORTS.2.VIOLATED EXCHANGE RULE 342 IN THAT THE FIRM FAILED TOPROVIDE FOR, ESTABLISH, AND MAINTAIN ADEQUATE PROCEDURES ANDCONTROLS, INCLUDING A SYSTEM OF FOLLOW-UP AND REVIEW OFCERTAIN BUSINESS ACTIVITIES IN ORDER TO ENSURE COMPLIANCE WITHEXCHANGE AND FEDERAL LAWS REGARDING: I.)WIRE FUND TRANSFERSFROM SUSPENSE ACCOUNTS; II.)DOCUMENTATION PERTAINING TOMOVEMENT OF FUNDS FROM SUSPENSE ACCOUNTS, AND III.)APPROVALAND REVIEW OF EMPLOYEE TRADING ACCOUNTS HELD OUTSIDE THEFIRM IN VIOLATION EXCHANGE RULE 407.B.



Resolution:


Decision







Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, CREDIT SUISSESECURITES (USA) LLC AGREED TO THE IMPOSITION OF A CENSURE AND AFINE OF $200,000.


i


Initiated By: PACIFIC STOCK EXCHANGE




CENSURE AND AMENDING OPERATIONAL AND SUPERISORY PROCEDURESTO GREATLY REDUCE IF NOT ELIMINATE FUTURE VIOLATIONS OF MARKETMAKER OBLIGATIONS TO MAINTAIN CONTINUOUS TWO-SIDED Q ORDERS.





Allegations: MEMBER FIRM VIOLATED PCXE RULE 7.23(A)(1) WHEN IT FAILED TOMAINTAIN CONTINUOUS TWO-SIDED Q ORDERS FOR ISSUES IN WHICH ITIS REGISTERED AS A MARKET MAKER.



Resolution:

Other Sanctions Ordered: AMEND ITS OPERATIONAL AND SUPERVISORY PROCEDURES TO GREATLYREDUCE IF NOT ELIMINATE FUTURE VIOLATIONS OF ITS MARKET MAKEROBLIGATIONS TO MAINTAIN CONTINUOUS TWO-SIDED Q ORDERS.

Sanction Details: $26,000.00 FINE LEVIED AGAINST CSFB WAS PAID ON OCTOBER 10, 2005.


No

















Allegations: THE PACIFIC STOCK EXCHANGE ALLEGED THE FIRM FAILED TO MAINTAINCONTINUOUS TWO-SIDED Q ORDERS IN ONE SECURITY, IN VIOLATION OFPCXE RULE 7.23(A)(1).



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRMCONSENTED TO A FINE OF $26,000.00, A CENSURE AND AN UNDERTAKINGWHEREBY CSFB SHALL DEMONSTRATE TO THE SATISFACTION OF THEPCXE DIRECTOR OF MARKET REGULATION NO LATER THAN THIRTY (30)CALENDAR DAYS AFTER THE DATE THIS OFFER IS APPROVED BY THEBCC, THAT CSFB HAS AMENDED ITS OPERATIONAL AND SUPERVISORYPROCEDURES TO REDUCE IF NOT ELIMINATE FUTURE VIOLATIONS.




i


Allegations: SEC ADMINISTRATIVE RELEASE ACT OF 33-8578, MAY 31, 2005, SECURITIESEXCHANGE ACT OF 34-51764, MAY 31, 2005 AND INVESTMENT ADVISERSACT 40-2391, MAY 31, 2005; RESPONDENT MEMBER FAILED REASONABLYSUPERVISE TRADER; HAD INADEQUATE SYSTEM TO IMPLEMENTPROCEDURES REGARDING MONITORING OF THE AUSTRALIA DESK;INADEQUATE SYSTEMS TO IMPLEMENT PROCEDURES FOR TRACKING ANDMONITORING SUPERVISORY APPOINTMENTS ON THE AUSTRALIA DESK;NO PROCEDURES FOR MONITORING THE CONVERSION ACCOUNT;INADEQUATE SYSTEMS FOR MONITORING TRADE CANCELLATION.









Cease and Desist






SEC ADMINISTRATIVE RELEASE ACT OF 33-8578, MAY 31, 2005, SECURITIESEXCHANGE ACT OF 34-51764, MAY 31, 2005 AND INVESTMENT ADVISERSACT 40-2391, MAY 31, 2005; RESPONDENT MEMBER FAILED REASONABLYSUPERVISE TRADER; HAD INADEQUATE SYSTEM TO IMPLEMENTPROCEDURES REGARDING MONITORING OF THE AUSTRALIA DESK;INADEQUATE SYSTEMS TO IMPLEMENT PROCEDURES FOR TRACKING ANDMONITORING SUPERVISORY APPOINTMENTS ON THE AUSTRALIA DESK;NO PROCEDURES FOR MONITORING THE CONVERSION ACCOUNT;INADEQUATE SYSTEMS FOR MONITORING TRADE CANCELLATION.


Resolution:

Other Sanctions Ordered: UNDERTAKING TO MAINTAIN THE FOLLOWING IMPROVEMENTS:IMPLEMENT OF CONTROL OVER THE AUSTRALIA DESK IN NEW YORK,IMPROVE TRADE CANCELLATION PROCEDURE, AND MONITOR THECONVERSION ACCOUNT.

Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS HEREIN, RESPONDENTMEMBER CONSENTED TO THE ENTRY OF THIS ORDER. ACCORDINGLY,PURSUANT TO SECTION 8A OF THE SECURITIES ACT AND SECTION 15(B)(6)AND 21C OF THE EXCHANGE ACT AND SECTION 203(F) OF THE ADVISERSACT, IT IS HEREBY ORDERED THAT, CSFB SHALL CEASE AND DESIST FROMCOMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONSOF SECTION 17(A) OF THE EXCHANGE ACT AND RULE 17A-3 THEREUNDER.


No


Order

iReporting Source:







Initiated By: U.S. SECURITIES AND EXCHANGE COMMISSION




CEASE AND DESIST




Other Product Type(s): AMERICAN DEPOSITORY RECEIPT

Allegations: ON OR ABOUT MAY 31, 2005, THE SEC ENTERED A CEASE AND DESISTORDER AND A $200,000 FINE AGAINST CSFB FOR ITS FAILURE IN 2000 TOSUPERVISE A TRADER NAMED CHARLES O'BRIEN, JR. MR. O'BRIENFAILED TO DISCLOSE A PROPRIETARY TRADING LOSS IN AN ADR CALLEDLOOKSMART AND HE INTERNALLY MISMARKED THE LOOKSMARTPOSITIONS TO CONCEAL THE LOSS. NO CUSTOMERS WERE INVOLVEDAND ALL PRICES REPORTED TO NASDAQ WERE ACCURATE.



Resolution:

Other Sanctions Ordered: UNDERTAKING TO MAINTAIN THE FOLLOWING IMPROVEMENTS:IMPLEMENT OF CONTROL OVER THE AUSTRALIA DESK IN NEW YORK,IMPROVE TRADE CANCELLATION PROCEDURE, AND MONITOR THECONVERSION ACCOUNT.

Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS CSFB CONSENTEDTO THE ENTRY OF THIS ORDER, ACCORDINGLY, PURSUANT TO SECTION8A OF THE SECURITIES ACT AND SECTION 15(B)(6) AND 21C OF THEEXCHANGE ACT AND SECTION 203 (F) OF THE ADVISERS ACT, TO CEASEAND DESIST FROM COMMITTING OR CAUSING ANY VIOLATION AND ANYFUTURE VIOLATIONS OF SECTION 17(A)OF THE EXCHANGE ACT AND RULE17A-3 THEREUNDER.

Firm Statement SEE DETAIL ABOVE.


Settled


i







Initiated By: NASD




Docket/Case Number: CLG050072



Allegations: SEC RULE 10B-10, NASD CONDUCT RULES 2110 AND 3010, AND NASDMARKETPLACE RULE 6130(B); RESPONDENT MEMBER FAILED TO ACCEPTOR DECLINE IN ACT TRANSACTIONS IN ELIGIBLE SECURITIES WITHIN 20MINUTES AFTER EXECUTION; FAILED TO PROVIDE WRITTEN NOTIFICATIONDISCLOSING TO ITS CUSTOMER ITS CORRECT CAPACITY IN THETRANSACTIONS; THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDEFOR SUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCEWITH RESPECT TO THE APPLICABLE SECURITIES LAWS AND REGULATIONCONCERNING BEST EXECUTION, TRADE REPORTING AND OATS.



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, RESPONDENT FIRMCONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS; THEREFORE, FIRM IS CENSURED AND FINED $17,500.


No



iReporting Source:





https://www.finra.org/rules-guidance/oversight-enforcement/finra-disciplinary-actions?search=CLG050072



Initiated By: NASD




Docket/Case Number: CLG050072



Allegations: ALLEGED VIOLATION OF SEC RULE 10B-10, NASD CONDUCT RULES 2110AND 3010, AND NASD MARKETPLACE RULE 6130(B); THE FIRM FAILED TOACCEPT OR DECLINE TRANSACTIONS IN ELIGIBLE SECURITIES WITHINTWENTY MINUTES AFTER EXECUTION; DID NOT PROVIDE ITS CORRECTCAPACITY VIA WRITTEN CONFIRMATION TO CUSTOMERS; THE FIRM'SSUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISIONREASONABLE DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLESECURITIES LAWS AND REGULATION, AND RULES OF NASD.



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRMCONSENTED TO THE IMPOSITION OF A CENSURE AND FINE OF $17,500.




i




Allegations: FIRM FAILED TO MAINTAIN CONTINUOUS, TWO-SIDED Q ORDERS INVIOLATION OF PCXE RULE 7.23(A)(1).






https://www.finra.org/rules-guidance/oversight-enforcement/finra-disciplinary-actions?search=CLG050072





Docket/Case Number: 04-07/33741, 33764 & 33800




Resolution:


Sanction Details: $10,400.00, ALL LEVIED AGAINST CREDIT SUISSE FIRST BOSTON LLC.


No









Docket/Case Number: 04-07/33741,33764 & 33800



Allegations: THE PACIFIC STOCK EXCHANGE ALLEGED THE FIRM FAILED TO MAINTAINCONTINUOUS,TWO-SIDED Q ORDERS IN ONE SECURITY, IN VIOLATION OFPCXE RULE 7.23(A)(1).








Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRMCONSENTED TO A FINE OF $10,400.00.




i


Initiated By: NASD




Docket/Case Number: CAF040066



Allegations: NASD CONDUCT RULES 2110 AND 3010 - RESPONDENT MEMBERDONALDSON, LUFKIN & JENRETTE SECURITIES, CORP., FORMED ACOMPANY AND FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORYSYSTEM AND WRITTEN SUPERVISORY PROCEDURES DESIGNED TOENSURE THAT A REPRESENTATIVE EMPLOYED WITH THE COMPANY,COMPLIED WITH ALL APPLICABLE SECURITIES LAWS AND REGULATIONS,AND NASD RULES; FAILED TO DESIGNATE A PRINCIPAL, AND FAILED TODEVELOP WRITTEN SUPERVISORY PROCEDURES FOR THE COMPANY TOSUPERVISE THE REPRESENTATIVE ACTIVITIES. RESPONDENT MEMBERFAILED TO ENSURE THAT PROCEDURES WERE IN PLACE TO REVIEW THEDISTRIBUTION OF QUARTERLY PERFORMANCE REPORTS, AND WRITTENCOMMENTARY FOR THE COMPANY PREPARED BY THE REPRESENTATIVE.



Resolution:


No








Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE RESPONDENTMEMBER CONSENTED TO THE FINDING OF THE ALLEGATIONS AND TO THEFOLLOWING SANCTIONS: CENSURED AND FINED $100,000.00.


No



Initiated By: NASD




CENSURE





Allegations: NASD ALLEGED THAT DONALDSON, LUFKIN & JENRETTE SECURITIESCORP. ("DLJSC"), PREDECESSOR IN INTEREST TO CREDIT SUISSE FIRSTBOSTON, LLC, FAILED TO SUPERVISE A GENERAL SECURITIESREPRESENTATIVE OF DLJSC, WITH RESPECT TO HIS RECOMMENDATIONTO A PUBLIC CUSTOMER TO INVEST IN A CERTAIN INVESTMENTPARTNERSHIP, AND ALSO FAILED TO HAVE APPROPRIATE PROCEDURESFOR REVIEW AND APPROVAL OF QUARTERLY PERFORMANCE REPORTSWHICH WERE DISTRIBUTED TO THE LIMITED PARTNERS OF THATPARTNERSHIP.



Resolution:









Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRMCONSENTED TO A CENSURE AND A FINE OF $100,000.



i






CENSURE


Docket/Case Number: FILE NO 3-11609



Allegations: THE SEC ORDER STATED THAT DONALDSON, LUFKIN & JENRETTESECURITIES CORP., PREDECESSOR IN INTEREST TO CREDIT SUISSEFIRST BOSTON, LLC, FAILED REASONABLY TO SUPERVISE ONE OF ITSFORMER REGISTERED REPRESENTATIVES,R. CHRISTOPHER HANNA, WITHA VIEW TO PREVENTING AND DETECTING HIS VIOLATIONS OF THEFEDERAL SECURITIES LAWS DURING A PORTION OF THE TWELVE-YEARPERIOD THAT IT EMPLOYED HIM FROM NOVEMBER 1989 TO MAY 2001.



Resolution:


Sanction Details: REFER TO THE ABOVE.


Order


i







Initiated By: NASD




Docket/Case Number: CMS040135



Allegations: NASD MARKETPLACE RULE 6955(A) AND NASD CONDUCT RULE 2110 -CREDIT SUISSE FIRST BOSTON LLC FAILED TO TIMELY REPORT TO ORDERAUDIT TRAIL SYSTEM ("OATS") 1,064,475 REPORTABLE ORDER EVENTS("ROES"). THESE LATE ROES REPRESENTED 9.9% OF ALL ROESSUBMITTED BY THE FIRM TO OATS DURING THE REVIEW PERIOD (APRIL 1THROUGH JUNE 30, 2003). DURING THE REVIEW PERIOD, CREDIT SUISSEFIRST BOSTON LLC SUBMITTED TO OATS 258,276 REPORTS WITHRESPECT TO EQUITY SECURITIES TRADED ON THE NASDAQ STOCKMARKET (THE "SUBJECT REPORTS") THAT WERE NOT IN THE ELECTRONICFORM PRESCRIBED BY NASD. THE SUBJECT REPORTS WERE NOTREJECTED BY THE OATS SYSTEM AND NOTICE OF SUCH REJECTION WASMADE AVAILABLE TO THE FIRM ON OATS WEBSITE. THE FIRM DID NOTCORRECT OR REPLACE 258,276 OF THE SUBJECT REPORTS, OR 100PERCENT OF THE SUBJECT REPORTS. DURING THE SUBSEQUENTREVIEW PERIOD (JULY 1 THROUGH SEPTEMBER 30, 2003) THE FIRMTRANSMITTED TO OATS 91,238 REPORTS THAT CONTAINED INACCURATE,INCOMPLETE, OR IMPROPERLY FORMATTED DATA. SPECIFICALLY, THEREPORTS CONTAINED INACCURATE TIME STAMPS. THESE INACCURATEREPORTS REPRESENTED ONE PERCENT OF ALL REPORTS TRANSMITTEDBY THE FIRM DURING THE REVIEW PERIOD.



Resolution:


No









Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, CREDIT SUISSEFIRST BOSTON LLC CONSENTED TO THE DESCRIBED SANCTIONS AND TOTHE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED ANDFINED IN THE AMOUNT $50,000.00.



Initiated By: NASD




CENSURE





Allegations: NASD MARKETPLACE RULE 6955(A) AND NASD CONDUCT RULE 2110 -CREDIT SUISSE FIRST BOSTON LLC FAILED TO TIMELY REPORT TO ORDERAUDIT TRAIL SYSTEM ("OATS") 1,064,475 REPORTABLE ORDER EVENTS("ROES"). THESE LATE ROES REPRESENTED 9.9% OF ALL ROESSUBMITTED BY THE FIRM TO OATS DURING THE REVIEW PERIOD (APRIL 1THROUGH JUNE 30, 2003). DURING THE REVIEW PERIOD, CREDIT SUISSEFIRST BOSTON LLC SUBMITTED TO OATS 258,276 REPORTS WITHRESPECT TO EQUITY SECURITIES TRADED ON THE NASDAQ STOCKMARKET (THE "SUBJECT REPORTS") THAT WERE NOT IN THE ELECTRONICFORM PRESCRIBED BY NASD. THE SUBJECT REPORTS WERE NOTREJECTED BY THE OATS SYSTEM AND NOTICE OF SUCH REJECTION WASMADE AVAILABLE TO THE FIRM ON OATS WEBSITE. THE FIRM DID NOTCORRECT OR REPLACE 258,276 OF THE SUBJECT REPORTS, OR 100PERCENT OF THE SUBJECT REPORTS. DURING THE SUBSEQUENTREVIEW PERIOD (JULY 1 THROUGH SEPTEMBER 30, 2003) THE FIRMTRANSMITTED TO OATS 91,238 REPORTS THAT CONTAINED INACCURATE,INCOMPLETE, OR IMPROPERLY FORMATTED DATA. SPECIFICALLY, THEREPORTS CONTAINED INACCURATE TIME STAMPS. THESE INACCURATEREPORTS REPRESENTED ONE PERCENT OF ALL REPORTS TRANSMITTEDBY THE FIRM DURING THE REVIEW PERIOD.








CENSURE


Resolution:






i


Initiated By: SOUTH CAROLINA SECURITIES COMMISSION




CEASE AND DESIST




Other Product Type(s): RESEARCH

Allegations: IT WAS FOUND THAT CSFB VIOLATED THE ACT.



Resolution:


Sanction Details: CSFB WILL CEASE AND DESIST FROM VIOLATING THE ACT AND WILLCOMPLY WITH THE ACT IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THIS ORDER AND WILL COMPLY WITH THEUNDERTAKINGS OF ADDENDUM A, INCORPORATED HEREIN BYREFERENCE.


Order






Firm Statement THIS PROCEEDING AROSE OUT OF A JOINT INVESTIGATION BY THE SEC,THE NYSE, THE NASD AND VARIOUS STATE REGULATORY AGENCIES INTOALLEGED CONFLICTS OF INTEREST BETWEEN THE APPLICANT'S EQUITYRESEARCH DEPARTMENT AND ITS INVESTMENT BANKING DEPARTMENT.THE ENSUING "GLOBAL" SETTLEMENT INVOLVED THE APPLICANT ANDNINE OTHER LARGE SECURITIES FIRMS.


i


Initiated By: LOUISIANA COMMISSIONER OF SECURITIES




CEASE AND DESIST





Allegations: IT WAS FOUND THAT: (1) CSFB ENGAGED IN FRAUDULENT CONDUCT INTHE ISSUANCE OF CERTAIN RESEARCH REPORTS, AND (2) CSFB MADECERTAIN UNTRUE STATEMENTS IN CONNECTION WITH THE SALE OFSECURITIES.



Resolution:





Order






THIS PROCEEDING AROSE OUT OF A JOINT INVESTIGATION BY THE SEC,THE NYSE, THE NASD AND VARIOUS STATE REGULATORY AGENCIES INTOALLEGED CONFLICTS OF INTEREST BETWEEN THE APPLICANT'S EQUITYRESEARCH DEPARTMENT AND ITS INVESTMENT BANKING DEPARTMENT.THE ENSUING "GLOBAL" SETTLEMENT INVOLVED THE APPLICANT ANDNINE OTHER LARGE SECURITIES FIRMS.


i


Initiated By: KANSAS SECURITIES COMMISSIONER


Cease and Desist


WITH FINE


Docket/Case Number: 2003E044/KSC 2003-4737



Other Product Type(s): GENERAL SECURITES BD

Allegations: CREDIT SUISSE FIRST BOSTON, LLC'S ACTIVITIES IN CONNECTION WITHCERTAIN CONFLICTS OF INTEREST THAT RESEARCH ANALYSTS WERESUBJECT TO DURING THE PERIOD OF JULY 1, 1999, THROUGH JUNE 30,2001.



Resolution:


Sanction Details: CREDIT SUISSE FIRST BOSTON, LLC WILL CEASE AND DESIST FROMVIOLATING KSA 17-1254(M)(7)&(12) IN CONNECTION WITH THE RESEARCHPRACTIES REFERENCED IN THE ORDER, WILL COMPLY WITH KSA 17-1254(M)(7)&(12) IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ORDER, AND WILL COMPLY WITH THEUNDERTAKINGS.


Yes







www.finra.org/brokercheck User GuidanceCREDIT SUISSE FIRST BOSTON, LLC WILL CEASE AND DESIST FROMVIOLATING KSA 17-1254(M)(7)&(12) IN CONNECTION WITH THE RESEARCHPRACTIES REFERENCED IN THE ORDER, WILL COMPLY WITH KSA 17-1254(M)(7)&(12) IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THE ORDER, AND WILL COMPLY WITH THEUNDERTAKINGS.


Initiated By: KANSAS SECURITIES COMMISSIONER




CEASE AND DESIST


Docket/Case Number: 2003E044 K.S.C. NO.2003-4737



Allegations: IT WAS FOUND THAT: (1) CSFB ENGAGED IN FRAUDULENT CONDUCT INTHE ISSUANCE OF CERTAIN RESEARCH REPORTS, AND (2) CSFB FAILEDTO COMPLY WITH THE RECORD KEEPING REQUIREMENTS OF THEDIVISION.



Resolution:





Order


i
















Allegations: SEE SUMMARY



Resolution:

Other Sanctions Ordered: A ONE HUNDRED THOUSAND DOLLAR ($100,000) FINE AND A CENSURE

Sanction Details: A ONE HUNDRED THOUSAND DOLLAR ($100,000) FINE AND A CENSURE

Regulator Statement CREDIT SUISSE FIRST BOSTON CORP. ("CSFB"), AN EXCHANGE MEMBERORGANIZATION, WAS CENSURED AND FINED IN THE AMOUNT OF $100,000FOR THE FOLLOWING CONDUCT. CSFB CAUSED EIGHT FIRMPROPRIETARY ORDERS TO BE ENTERED AND EXECUTED ON THE CBOEFLOOR AS CUSTOMER ORDERS. IN ADDITION, IN OR ABOUT AUGUST 1999UNTIL IN OR ABOUT DECEMBER 2002, CSFB FAILED TO EFFECTIVELYMONITOR OPTION TRADING ACTIVITY IN ITS FIRM PROPRIETARYACCOUNTS AS WELL AS IN THOSE OF CERTAIN CSFB EMPLOYEES.SPECIFICALLY, CSFB IN AUGUST 1999 IMPLEMENTED SYSTEMPROGRAMMING CHANGES THAT GRADUALLY AND INADVERTENTLYELIMINATED OPTIONS ACTIVITY FROM THE EXCEPTION REPORTS USEDTO MONITOR THOSE ACCOUNTS FOR POTENTIAL MISUSE OF MATERIALNON-PUBLIC INFORMATION. CSFB KNEW BY DECEMBER 2000 THAT THESECHANGES WERE ELIMINATING OPTIONS TRADING ACTIVITY FROM THEEXCEPTION REPORTS AND IT FAILED TO COMPLETE CORRECTING THISDEFICIENCY OR ADOPT A SUBSTITUTE PROCESS TO RESTORE THEEFFECTIVENESS OF ITS MONITORING PROCEDURES IN A TIMELY MANNER.CSFB HAS INDICATED TO CBOE STAFF THAT IT HAS DONE A SELECTEDREMEDIAL REVIEW OF RELEVANT OPTION ACTIVITY AND IT FOUND NOISSUES. (CBOE RULES 4.1 - JUST AND EQUITABLE PRINCIPLES OF TRADE;4.2 - ADHERENCE TO LAW; 4.18 - PREVENTION OF THE MISUSE OFMATERIAL, NONPUBLIC INFORMATION; 4.6 - FALSE STATEMENTS; 6.24(A) -ORDERS REQUIRED TO BE IN WRITTEN FORM; 6.51(D) - TRADEINFORMATION; 9.8 AND INTERPRETATION .02 THERETO - SUPERVISION OFACCOUNTS.)


No








CREDIT SUISSE FIRST BOSTON CORP. ("CSFB"), AN EXCHANGE MEMBERORGANIZATION, WAS CENSURED AND FINED IN THE AMOUNT OF $100,000FOR THE FOLLOWING CONDUCT. CSFB CAUSED EIGHT FIRMPROPRIETARY ORDERS TO BE ENTERED AND EXECUTED ON THE CBOEFLOOR AS CUSTOMER ORDERS. IN ADDITION, IN OR ABOUT AUGUST 1999UNTIL IN OR ABOUT DECEMBER 2002, CSFB FAILED TO EFFECTIVELYMONITOR OPTION TRADING ACTIVITY IN ITS FIRM PROPRIETARYACCOUNTS AS WELL AS IN THOSE OF CERTAIN CSFB EMPLOYEES.SPECIFICALLY, CSFB IN AUGUST 1999 IMPLEMENTED SYSTEMPROGRAMMING CHANGES THAT GRADUALLY AND INADVERTENTLYELIMINATED OPTIONS ACTIVITY FROM THE EXCEPTION REPORTS USEDTO MONITOR THOSE ACCOUNTS FOR POTENTIAL MISUSE OF MATERIALNON-PUBLIC INFORMATION. CSFB KNEW BY DECEMBER 2000 THAT THESECHANGES WERE ELIMINATING OPTIONS TRADING ACTIVITY FROM THEEXCEPTION REPORTS AND IT FAILED TO COMPLETE CORRECTING THISDEFICIENCY OR ADOPT A SUBSTITUTE PROCESS TO RESTORE THEEFFECTIVENESS OF ITS MONITORING PROCEDURES IN A TIMELY MANNER.CSFB HAS INDICATED TO CBOE STAFF THAT IT HAS DONE A SELECTEDREMEDIAL REVIEW OF RELEVANT OPTION ACTIVITY AND IT FOUND NOISSUES. (CBOE RULES 4.1 - JUST AND EQUITABLE PRINCIPLES OF TRADE;4.2 - ADHERENCE TO LAW; 4.18 - PREVENTION OF THE MISUSE OFMATERIAL, NONPUBLIC INFORMATION; 4.6 - FALSE STATEMENTS; 6.24(A) -ORDERS REQUIRED TO BE IN WRITTEN FORM; 6.51(D) - TRADEINFORMATION; 9.8 AND INTERPRETATION .02 THERETO - SUPERVISION OFACCOUNTS.)


Initiated By: CHICAGO BOARD OPTIONS EXCHANGE, INC.




CENSURE





Allegations: IT WAS ALLEGED THAT THE FIRM VIOLATED CBOE EXCHANGE RULES 4.1,4.18, 4.2, 4.6, 6.24(A) 6.51(D), 9.8, IN THAT CSFB CAUSED CERTAIN FIRMPROPRIETARY ORDERS TO BE ENTERED AND EXECUTED ON THE CBOEFLOOR AS CUSTOMER ORDERS AND FAILED TO IMPLEMENT ADEQUATESUPERVISORY PROCEDURES RELATING TO CERTAIN EXCEPTIONREPORTS.



Resolution:










Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRMCONSENTED TO A CENSURE AND THE PAYMENT OF A $100,000.00 FINEIMPOSED BY THE CBOE.


i


Initiated By: UTAH DIVISION OF SECURITIES


Cease and Desist


MONETARY PENALTY TO THE DIVISION IN THE AMOUNT OF $750,000






Allegations: RESEARCH ANALYST CONFLICTS OF INTEREST



Resolution:


Sanction Details: CEASE AND DESIST AND PAY A MONETARY PENALTY OF $750,000.00 TOSECURITIES INVESTOR EDUCATION AND TRAINING FUND.

Regulator Statement FOR MORE INFORMATION, PLEASE VISIT THE DIVISION'S WEB SITE AT:HTTP://WWW.SECURITIES.STATE.UT.US/ACTIONSEVENTS.ASP?DOCKET+NUMBER=SD%2D03%2D0028


Consent


Allegations: IT WAS FOUND THAT CSFB ENGAGED IN FRAUDULENT CONDUCT IN THEISSUANCE OF CERTAIN RESEARCH REPORTS







Initiated By: UTAH DEPARTMENT OF COMMERCE DIVISION OF SECURITIES




CEASE AND DESIST





Allegations: IT WAS FOUND THAT CSFB ENGAGED IN FRAUDULENT CONDUCT IN THEISSUANCE OF CERTAIN RESEARCH REPORTS


Resolution:





Order


i


Allegations: CONFLICTS OF INTEREST BETWEEN BANKING AND ANALYST FUNCTIONS,FAVORABLE ANALYST REPORTS ON "BANKING PRODUCTS," RESEARCHREPORTS W/O REASONABLE BASIS, IMPROPER SPINNING ANDDISTRIBUTION.


Appealed To and Date AppealFiled:

N/A






Initiated By: IOWA


Cease and Desist


FINE


Docket/Case Number: C03-10-161



Other Product Type(s): N/A

CONFLICTS OF INTEREST BETWEEN BANKING AND ANALYST FUNCTIONS,FAVORABLE ANALYST REPORTS ON "BANKING PRODUCTS," RESEARCHREPORTS W/O REASONABLE BASIS, IMPROPER SPINNING ANDDISTRIBUTION.


Resolution:

Other Sanctions Ordered: CSFB CONSENTED TO THE ENTRY OF THE ORDER WITHOUT ADMITTINGOR DENYING THE ALLEGATIONS OF MISCONDUCT.

Sanction Details: ONE OF SEVERAL ANALYST TASK FORCE SETTLEMENTS. CONSENTORDER ALSO CONTAINED SEVERAL UNDERTAKINGS.

Regulator Statement N/A


No


Consent


Initiated By: IOWA SECURITIES DIVISION

Allegations: CONFLICTS OF INTEREST BETWEEN BANKING AND ANALYST FUNCTIONS,FAVORABLE ANALYST REPORTS ON "BANKING PRODUCTS," RESEARCHREPORTS W/O REASONABLE BASIS, IMPROPER SPINNING ANDDISTRIBUTION.








Cease and Desist


FINE


Docket/Case Number: C03-10-161




Resolution:

Other Sanctions Ordered: CSFB CONSENTED TO THE ENTRY OF THE ORDER WITHOUT ADMITTINGOR DENYING THE ALLEGATIONS OF MISCONDUCT.

Sanction Details: ONE OF SEVERAL ANALYST TASK FORCE SETTLEMENTS. CONSENTORDER ALSO CONTAINED SEVERAL UNDERTAKINGS.



Consent


i


Initiated By: WEST VIRGINIA SECURITIES DIVISION




Docket/Case Number: E03-1355













CEASE AND DESIST


Resolution:





Order


i


Initiated By: PA SECURITIES COMMISSIONCONTACT: G. PHILIP RUTLEDGE (717) 787-8059


Other





Other Product Type(s): SECURITIES

Allegations: THIS ACTION IS IN CONNECTION WITH THE GLOBAL ANALYST SETTLEMENTWHICH INCORPORATED THE FINAL JUDGMENT OF THE U.S. DISTRICTCOURT FOR THE SOUTHERN DISTRICT OF NEW YORK, CIVIL ACTION NO.03 CIV. 2946 (WHP) ENTERED ON OCTOBER 31, 2003.








Other


RESPONDENT CREDIT SUISSE FIRST BOSTON LLC F/K/A CREDIT SUISSEFIRST BOSTON CORPORATION PAID A $2,838,808.00 ADMINISTRATIVEASSESSMENT.


Resolution:


Sanction Details: RESPONDENT CREDIT SUISSE FIRST BOSTON LLC F/K/A CREDIT SUISSEFIRST BOSTON CORPORATION PAID A $2,838,808.00 ADMINISTRATIVEASSESSMENT.


Settled


Initiated By: PENNSYLVANIA SECURITIES COMMISSION


Other


CREDIT SUISSE FIRST BOSTON LLC F/K/A CREDIT SUISSE FIRST BOSTONCORPORATION PAID A $2,838,808.00 ADMINISTRATIVE ASSESSMENT.





Allegations: THIS ACTION IS IN CONNECTION WITH THE GLOBAL ANALYST SETTLEMENTWHICH INCORPORATED THE FINAL JUDGMENT OF THE U.S. DISTRICTCOURT FOR THE SOUTHERN DISTRICT OF NEW YORK, CIVIL ACTION NO.03 CIV.2946 (WHP) ENTERED ON OCTOBER 31,2003.



Resolution:


Sanction Details: CREDIT SUISSE FIRST BOSTON LLC F/K/A CREDIT SUISSE FIRST BOSTONCORPORATION PAID A $2,838,808.00 ADMINISTRATIVE ASSESSMENT.


Settled






Sanction Details: CREDIT SUISSE FIRST BOSTON LLC F/K/A CREDIT SUISSE FIRST BOSTONCORPORATION PAID A $2,838,808.00 ADMINISTRATIVE ASSESSMENT.


i


Initiated By: OHIO DEPARTMENT OF COMMERCE - DIVISION OF SECURITIES




CEASE AND DESIST





Allegations: IT WAS FOUND THAT CSFB ENGAGED IN DECEPTIVE PRACTICES.



Resolution:





Settled


i







Initiated By: NORTH CAROLINA DEPARTMENT OF THE SECRETARY OF STATE -SECURITIES DIVISION




CEASE AND DESIST


Docket/Case Number: 03-015-1G



Allegations: THE NORTH CAROLINA SECURITIES DIVISION ALLEGED THAT CSFBENGAGED IN CERTAIN BUSINESS PRACTICES THAT CREATEDINAPPROPRIATE INFLUENCE BY INVESTMENT BANKERS OVER RESEARCHANALYSTS, THEREBY IMPOSING CONFLICTS OF INTEREST ON THEM. ITWAS FURTHER ALLEGED THAT CSFB PUBLISHED CERTAIN FRAUDULENTRESEARCH REPORTS AND OTHER RESEARCH REPORTS THAT VIOLATEDAPPLICABLE LEGAL OR REGULATORY REQUIREMENTS FORCOMMUNICATIONS WITH THE PUBLIC.



Resolution:





Order







i






CEASE AND DESIST


Docket/Case Number: 03-03-032-051 (CO)



Allegations: IT WAS FOUND THAT: (1) CSFB ENGAGED IN FRAUDULENT CONDUCT INTHE ISSUANCE OF CERTAIN RESEARCH REPORTS, (2) CSFB ENGAGED INDISHONEST AND UNETHICAL PRACTICES, (3) CSFB PROVIDEDRECOMMENDATIONS WITHOUT REASONABLE GROUNDS TO BELIEVE THATTHE RECOMMENDATION WAS SUITABLE, AND (4)CSFB FAILED TOREASONABLY SUPERVISE ITS EMPLOYEES.



Resolution:





Order







i


Initiated By: NEW HAMPSHIRE DEPARTMENT OF STATE - BUREAU OF SECURITIESREGULATION




CEASE AND DESIST





Allegations: IT WAS FOUND THAT: (1) CSFB ENGAGED IN FRAUDULENT CONDUCT INTHE ISSUANCE OF CERTAIN RESEARCH REPORTS, (2) CSFB FAILED TOCOMPLY WITH THE SEC AND THE NASD AND (3)CSFB FAILED TO COMPLYWITH THE RECORD KEEPING REQUIREMENTS OF THE DIVISION.



Resolution:





Order


i








Initiated By: MONTANA OFFICE OF SECRETARY OF STATE




CEASE AND DESIST


Docket/Case Number: I05-01-03-111






Resolution:





Order


i







Initiated By: MISSOURI




CEASE AND DESIST


Docket/Case Number: AO-03-17






Resolution:





Order


i


Allegations: IT WAS FOUND THAT: (1) CSFB ENGAGED IN FRAUDULENT CONDUCT INTHE ISSUANCE OF CERTAIN RESEARCH REPORTS, (2) CSFB ENGAGED INUNETHICAL PRACTICES, AND (3) CSFB FAILED TO ESTABLISH PROPERWRITTEN PROCEDURES FOR THE SUPERVISION ITS EMPLOYEES.







Initiated By: ILLINOIS SECRETARY OF STATE - SECURITIES DIVISION




CEASE AND DESIST





Allegations: IT WAS FOUND THAT: (1) CSFB ENGAGED IN FRAUDULENT CONDUCT INTHE ISSUANCE OF CERTAIN RESEARCH REPORTS, (2) CSFB ENGAGED INUNETHICAL PRACTICES, AND (3) CSFB FAILED TO ESTABLISH PROPERWRITTEN PROCEDURES FOR THE SUPERVISION ITS EMPLOYEES.


Resolution:





Order


i



Allegations: IT WAS FOUND THAT: (1) CSFB ENGAGED IN FRAUDULENT CONDUCT INTHE ISSUANCE OF CERTAIN RESEARCH REPORTS, AND (2) CSFBENGAGED IN DISHONEST AND UNETHICAL PRACTICES.











CEASE AND DESIST


Docket/Case Number: S-03532A-03-0000




Resolution:





Order


i


Initiated By: ARKANSAS SECURITIES DEPARTMENT


Allegations: IT WAS FOUND THAT: (1) CSFB ENGAGED IN FRAUDULENT CONDUCT INTHE ISSUANCE OF CERTAIN RESEARCH REPORTS, (2) CSFB ENGAGED INDISHONEST AND UNETHICAL PRACTICES, AND (3)CSFB FAILED TOREASONABLY SUPERVISE ITS EMPLOYEES.










CEASE AND DESIST





Resolution:





Order


i


Allegations: NASD CONDUCT RULES 2210, 2320 AND 3320, NASD MARKETPLACE RULE4613(B) AND SEC RULE 11AC1-1 - RESPONDENT MEMBER, IN CONNECTIONWITH CUSTOMER MARKET AND MARKETABLE LIMIT ORDERS, FAILED TOSEND ANY SELECTNET MESSAGES TO MARKET PARTICIPANTS OR ENTERANY ORDERS INTO ECN'S TO SELL SHARES OF A STOCK IN ORDER TO FILLTHE ORDERS WHICH IT HAD AN OBLIGATION, PURSUANT TO THE DUTY OFBEST EXECUTION, TO MAKE EVERY REASONABLE EFFORT TO EXECUTETHE ORDERS FULLY AND PROMPTLY WITHOUT REGARD TO PRICE; FAILEDTO USE REASONABLE DILIGENCE TO ASCERTAIN THE BEST INTER-DEALERMARKET FOR THE SUBJECT ORDERS AND FAILED TO BUY OR SELL INSUCH MARKET SO THAT THE RESULTANT PRICE TO THE FIRM'SCUSTOMERS WAS AS FAVORABLE AS POSSIBLE UNDER PREVAILINGMARKET CONDITIONS; AND, FAILED TO EXECUTE ORDERES UPONPRESENTMENT AND THEREBY FAILED TO HONOR IT'S PUBLISHEDQUOTATION.







Initiated By: NASD







NASD CONDUCT RULES 2210, 2320 AND 3320, NASD MARKETPLACE RULE4613(B) AND SEC RULE 11AC1-1 - RESPONDENT MEMBER, IN CONNECTIONWITH CUSTOMER MARKET AND MARKETABLE LIMIT ORDERS, FAILED TOSEND ANY SELECTNET MESSAGES TO MARKET PARTICIPANTS OR ENTERANY ORDERS INTO ECN'S TO SELL SHARES OF A STOCK IN ORDER TO FILLTHE ORDERS WHICH IT HAD AN OBLIGATION, PURSUANT TO THE DUTY OFBEST EXECUTION, TO MAKE EVERY REASONABLE EFFORT TO EXECUTETHE ORDERS FULLY AND PROMPTLY WITHOUT REGARD TO PRICE; FAILEDTO USE REASONABLE DILIGENCE TO ASCERTAIN THE BEST INTER-DEALERMARKET FOR THE SUBJECT ORDERS AND FAILED TO BUY OR SELL INSUCH MARKET SO THAT THE RESULTANT PRICE TO THE FIRM'SCUSTOMERS WAS AS FAVORABLE AS POSSIBLE UNDER PREVAILINGMARKET CONDITIONS; AND, FAILED TO EXECUTE ORDERES UPONPRESENTMENT AND THEREBY FAILED TO HONOR IT'S PUBLISHEDQUOTATION.


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, RESPONDENTMEMBER CONSENTED TO THE DESCRIBED SANCTIONS AND TO THEENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED$170,000. THE FIRM PROVIDED RESTITUTION TO CUSTOMERS INVOLVED INTHE AMOUNT OF $606,537.50, PLUS INTEREST.


No




Allegations: THE NASD ALLEGED VIOLATIONS OF NASD CONDUCT RULES 2210, 2320AND 3320, NASD MARKETPLACE RULE 4613(B) AND SEC RULE 11AC1-1.







Initiated By: NASD








Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, RESPONDENTMEMBER CONSENTED TO THE DESCRIBED SANCTIONS AND TO THEENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED$170,000. THE FIRM PROVIDED RESTITUTION TO CUSTOMERS INVOLVED INTHE AMOUNT OF $606,537.50, PLUS INTEREST.




i


Initiated By: OKLAHOMA


Docket/Case Number: ODS 03-130



Allegations: TIME PERIOD BEGINNING JULY 1, 1999, TO JUNE 30, 2001, TO WIT, CSFBFAILED TO ENSURE THAT RESEARCH ANALYSTS WERE ADEQUATELYINSULATED FROM PRESSURES AND INFLUENCES FROM COVEREDCOMPANIES AND INVESTMENT BANKING, AND CSFB FAILED TOREASONABLY SUPERVISE ITS EMPLOYEES TO ENSURE THAT ITSRESEARCH ANALYSTS WERE ADEQUATELY INSULATED FROM SUCHPRESSURES AND INFLUENCES.











Other Product Type(s): ANALYST INDEPENDENCE (IPO)


Resolution:


Sanction Details: CSFB ALSO AGREED TO COMPLY WITH ALL UNDERTAKINGS ESTABLISHEDAS PART OF THE GLOBAL ANALYST SETTLEMENT IN CONNECTION WITHTHE FIRM'S RESEARCH PRACTICES.


Consent


Initiated By: OKLAHOMA DEPARTMENT OF SECURITIES




CEASE AND DESIST


Docket/Case Number: ODS FILE NO. 03-130



Allegations: IT WAS FOUND THAT: (1) CSFB ENGAGED IN DISHONEST AND UNETHICALPRACTICES, AND (2) CSFB FAILED TO REASONABLY SUPERVISE ITSEMPLOYEES.



Resolution:


Order










i


Initiated By: NASD






Other Product Type(s): UNKNOWN TYPE OF SECURITY

Allegations: NASD MARKETPLACE RULE 6130(D) AND SEC RULE 11AC1-4 -RESPONDENT MEMBER ("FIRM") FAILED TO REPORT TO ACT THECORRECT SYMBOL INDICATING WHETHER THE TRANSACTION WAS A BUY,SELL, SELL SHORT, SELL SHORT EXEMPT OR CROSS FOR TRANSACTIONSIN ELIGIBLE SECURITIES. IN ADDITION, THE FIRM FAILED TO DISPLAYIMMEDIATELY THE CUSTOMER LIMIT ORDERS IN NASDAQ SECURITIES INITS PUBLIC QUOTATION, WHEN EACH SUCH ORDER WAS AT A PRICE THATWOULD HAVE IMPROVED THE FIRM'S BID OR OFFER IN EACH SUCHSECURITY; OR WHEN THE ORDER WAS PRICED EQUAL TO THE FIRM'S BIDOR OFFER AND THE NATIONAL BEST BID OR OFFER IN SUCH SECURITY,AND THE SIZE OF THE ORDER REPRESENTED MORE THAN A DE MINIMISCHANGE IN RELATION TO THE SIZE ASSOCIATED WITH ITS BID OR OFFERIN EACH SUCH SECURITY.








Resolution:




No




Initiated By: NASD




CENSURE





Allegations: THE NASD ALLEGED VIOLATIONS OF NASD MARKETPLACE RULE6130(D)(ACT REPORTING) AND SEC RULE 11AC1-4 (LIMIT ORDER DISPLAY).



Resolution:












i


Initiated By: OREGON DIVISION OF FINANCE AND CORPORATE SECURITIES




CEASE AND DESIST





Other Product Type(s): STOCK

Allegations: RESPONDENT ENGAGED IN FRAUDULENT, UNETHICAL AND DISHONESTPRACTICES IN CONNECTION WITH THE OFFER OR SALE OF SECURITIES.RESPONDENT ALSO FAILED REASONABLY TO SUPERVISE THEIREMPLOYEES. ALL ALLEGATIONS RELATED TO PRACTICES OF THERESEARCH AND INVESTMENT BANKING SECTIONS OF THERESPONDENT'S FIRM.



Resolution:


Sanction Details: NO PORTION OF PENALTY SUSPENDED

Regulator Statement RESEARCH ANALYSTS AT THE FIRM WERE SUBJECTED TO PRESSURESFROM THE INVESTMENT BANKING SECTION OF THE FIRM TO RATESTOCKS FAVORABLY SO AS TO GAIN THE INVESTMENT BANKINGBUSINESS OF THE FIRMS ISSUING THE STOCKS.


Yes


Consent






Regulator Statement RESEARCH ANALYSTS AT THE FIRM WERE SUBJECTED TO PRESSURESFROM THE INVESTMENT BANKING SECTION OF THE FIRM TO RATESTOCKS FAVORABLY SO AS TO GAIN THE INVESTMENT BANKINGBUSINESS OF THE FIRMS ISSUING THE STOCKS.


Initiated By: OREGON DEPARTMENT OF CONSUMER AND BUSINESS SERVICESDIVISION OF FINANCE AND CORPORATE SECURITIES




CEASE AND DESIST








Resolution:





Order







i


Initiated By: NASD




Docket/Case Number: C10030118


Other Product Type(s): COMMON STOCKS

Allegations: NASD RULES 2110, IM-2110-1 - THE PRIVATE CLIENT SERVICE GROUP OF AMEMBER FIRM WITH WHICH THE RESPONDENT MEMBER WAS AFFILIATEDSOLD COMMON STOCK IN PUBLIC OFFERINGS WHICH TRADED AT APREMIUM IN THE IMMEDIATE SECONDARY MARKET ("HOT ISSUE") ANDFAILED, PRIOR TO THE EXECUTION OF THE TRANSACTIONS TO OBTAINTHE REQUIRED DOCUMENTATION CONCERNING PERSONS HAVING ANYBENEFICIAL INTERESTS IN SUCH ACCOUNTS IN ACCORDANCE WITH NASDINTERPRETATIVE MEMORANDUM IM-2110-1(F)(1) REGARDING FREE-RIDINGAND WITHHOLDING.



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, CREDIT SUISSEFIRST BOSTON LLC CONSENTED TO THE DESCRIBED SANCTIONS AND TOTHE ENTRY OF FINDINGS, THEREFORE, THE FIRM IS CENSURED ANDFINED $6,500, JOINTLY AND SEVERALLY.


No








WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, CREDIT SUISSEFIRST BOSTON LLC CONSENTED TO THE DESCRIBED SANCTIONS AND TOTHE ENTRY OF FINDINGS, THEREFORE, THE FIRM IS CENSURED ANDFINED $6,500, JOINTLY AND SEVERALLY.


Initiated By: NASD


Censure


FINE OF $6,500.00




Other Product Type(s): COMMON STOCKS

Allegations: NASD ALLEGED THAT CSFB VIOLATED NASD RULE 2110 AND IM-2110-1.NASD ALLEGED THAT IN CONNECTION WITH A REVIEW OF 29 ACCOUNTSTHAT PURCHASED COMMON STOCK IN TWO PUBLIC OFFERINGS INNOVEMBER 2001, DLJ FAILED TO OBTAIN REQUIRED DOCUMENTATIONWITH RESPECT TO NINE ACCOUNTS CONCERNING PERSONS HAVING ANYBENEFICIAL INTERESTS IN SUCH ACCOUNTS. WITHOUT ADMITTING ORDENYING THE ALLEGATIONS, CSFB CONSENTED TO THE ENTRY OF THENASD'S FINDINGS.



Resolution:


Sanction Details: A CENSURE AND A FINE OF $6,500.00




i









Initiated By: WYOMING SECRETARY OF STATE AND ATTORNEY GENERAL




CEASE AND DESIST





IT WAS FOUND THAT: (1) CSFB ENGAGED IN FRAUDULENT CONDUCT INTHE ISSUANCE OF CERTAIN RESEARCH REPORTS, AND (2) CSFB FAILEDTO COMPLY WITH THE RECORD KEEPING REQUIREMENTS OF THEDIVISION.


Resolution:





Order


i


Initiated By: WISCONSIN DEPARTMENT OF FINANCIAL INSTITUTIONS


Allegations: IT WAS FOUND THAT: (1) CSFB ENGAGED IN FRAUDULENT CONDUCT INTHE ISSUANCE OF CERTAIN RESEARCH REPORTS, (2) CSFB ENGAGED INDISHONEST AND UNETHICAL PRACTICES, AND (3) CSFB FAILED TOREASONABLY SUPERVISE ITS EMPLOYEES.










CEASE AND DESIST


Docket/Case Number: FILE NO. S-03101(LX)




Resolution:





Order


i


Initiated By: WASHINGTON DEPARTMENT OF FINANCIAL INSTITUTIONS SECURITIESDIVISION



Allegations: IT WAS FOUND THAT: (1) CSFB ENGAGED IN FRAUDULENT CONDUCT INTHE ISSUANCE OF CERTAIN RESEARCH REPORTS, (2) CSFB CSFBENGAGED IN DISHONEST AND UNETHICAL PRACTICES, AND (3) CSFBFAILED TO REASONABLY SUPERVISE ITS EMPLOYEES.










CEASE AND DESIST





Resolution:





Order


i


Initiated By: VIRGINIA - DIVISION OF SECURITIES


Docket/Case Number: SEC-2003-00015



Allegations: COMMISSION RULES 21 VAC 5-20-260 B AND 21 VAC 5-20-280 A 18 WEREVIOLATED. CONTACT THE UNDERSIGNED FOR FURTHER INFORMATIONABOUT THE CONCLUSIONS OF LAW.











Other Product Type(s): CONTACT THE UNDERSIGNED FOR FURTHER INFORMATION


Resolution:

Other Sanctions Ordered: CONTACT UNDERSIGNED FOR FURTHER INFORMATION.

Sanction Details: CONTACT UNDERSIGNED FOR FURTHER INFORMATION

Regulator Statement $1,636,223.00 WAS RECEIVED AS PART OF THE SETTLEMENT AGREEMENTENTERED INTO THE ALL FIFTY STATE, THE DISTRICT OF COLUMBIA ANDTHE COMMONWEALTH OF PUERTO RICO, THROUGH A COMMITTEE OF THENORTH AMERICAN SECURITIES ADMINISTRATORS ASSOCIATION ("NASAA").JURISDICTION REPORTING INCIDENT: VIRGINIA STATE CORPORATIONCOMMISSION, DIVISION OF SECURITIES & RETAIL FRANCHISING. CONTACTKEVIN M. FURR AT 804-371-9081.


No


Settled


Initiated By: VIRGINIA STATE CORPORATION COMMISSION


Docket/Case Number: SEC-2003-00015













CEASE AND DESIST



Resolution:





Order


i


Initiated By: VERMONT


Docket/Case Number: 03-062-S

Allegations: VIOLATIONS OF THE VERMONT SECURITIES ACT IN THAT: (A) FIRM FAILEDTO ENSURE THAT ANALYSTS WHO ISSUED RESEARCH WERE ADEQUATELYINSULATED FROM PRESSURES AND INFLUENCES FROM COVEREDCOMPANIES AND INVESTMENT BANKING WHICH CONDUCT IS ADISHONEST AND UNETHICAL PRACTICE UNDER SECTION 4221A(A)(8) OFTHE ACT; AND (B) FIRM FAILED TO REASONABLY SUPERVISE ITSEMPLOYEES TO ENSURE THAT ITS ANALYSTS WHO ISSUED RESEARCHWERE ADEQUATELY INSULATED FROM PRESSURES AND INFLUENCESFROM COVERED COMPANIES AND INVESTMENT BANKING AS REQUIREDBY SECTION 4221A(A)(11) OF THE ACT.















Resolution:


Sanction Details: GLOBAL SETTLEMENT RESULTING FROM INVESTIGATION BY ANALYSTTASK FORCE. FIRM ADMITS THE JURISDICTION OF THE COMMISSIONER,NEITHER ADMITS NOR DENIES THE FINDINGS OF FACT AND CONCLUSIONSOF LAW CONTAINED IN THIS ORDER, AND CONSENTS TO THE ENTRY OFTHE ORDER BY THE COMMISSIONER.


Yes


Order


Initiated By: VERMONT DEPARTMENT OF BANKING, INSURANCE, SECURITIES ANDHEALTH CARE ADMINISTRATION














CEASE AND DESIST




Resolution:





Order


i


Initiated By: TENNESSEE COMMISSIONER OF COMMERCE AND INSURANCE




CEASE AND DESIST


Docket/Case Number: FILE NO.: 03-003











CEASE AND DESIST


Resolution:





Order


i


Initiated By: STATE OF SOUTH DAKOTA




CEASE AND DESIST


Docket/Case Number: CASE # 644











Resolution:





Order


i


Initiated By: RHODE ISLAND DEPARTMENT OF BUSINESS REGULATION DIVISION OFSECURITIES




CEASE AND DESIST





Allegations: IT WAS FOUND THAT: (1) CSFB ENGAGED IN FRAUDULENT CONDUCT INTHE ISSUANCE OF CERTAIN RESEARCH REPORTS, (2) CSFB ENGAGED INDISHONEST AND UNETHICAL PRACTICES, AND (3) CSFB FAILED TOCOMPLY WITH THE RECORD KEEPING REQUIREMENTS OF THE DIVISION.



Resolution: Order












i


Initiated By: PUERTO RICO OFFICE OF THE COMMISSIONER OF FINANCIALINSTITUTIONS




CEASE AND DESIST


Docket/Case Number: MATTER NO. C03-V-008






Resolution:


Order











i


Initiated By: NORTH DAKOTA





Docket/Case Number:



Other Product Type(s): ANALYST CONFLICT OF INTEREST

Allegations: SEE GLOBAL SETTLEMENT



Resolution:


Sanction Details: $727,500 ASSESSED AS A CIVIL PENALTY. $22,500 PAID TO THE INVESTOREDUCATION AND TECHNOLOGY FUND, ADMINISTERED BY THE SECURITIESDEPARTMENT. OTHER SANCTIONS AS SET FORTH IN GLOBALSETTLEMENT.


Consent






Sanction Details: $727,500 ASSESSED AS A CIVIL PENALTY. $22,500 PAID TO THE INVESTOREDUCATION AND TECHNOLOGY FUND, ADMINISTERED BY THE SECURITIESDEPARTMENT. OTHER SANCTIONS AS SET FORTH IN GLOBALSETTLEMENT.


Initiated By: NORTH DAKOTA SECURITIES DEPARTMENT




CEASE AND DESIST





Allegations: IT WAS FOUND THAT CSFB ENGAGED IN FRAUDULENT CONDUCT IN THEISSUANCE OF CERTAIN RESEARCH REPORTS.



Resolution:





Order


i








Initiated By: ATTORNEY STATE OF NEW YORK BUREAU OF INVESTMENT PROTECTION




CEASE AND DESIST





Allegations: IT WAS FOUND THAT CSFB VIOLATED THE MARTIN ACT.



Resolution:


Sanction Details: CSFB WILL CEASE DESIST FROM ENGAGING IN ANY ACTS IN VIOLATION OFTHE MARITN ACT AND WILL COMPLY WITH THE MARTIN ACT.



Order


i














CEASE AND DESIST






Resolution:





Order


i


Initiated By: NEVADA OFFICE OF THE SECRETARY OF STATE SECURITIES DIVISION












CEASE AND DESIST

Docket/Case Number: FILE NO. I03-182




Resolution:





Order


i


Initiated By: NEBRASKA DEPARTMENT OF BANKING AND FINANCE














CEASE AND DESIST




Resolution:





Order


i


Initiated By: OFFICE OF THE MISSISSIPPI SECRETARY OF STATE BUSINESSREGULATION AND ENFORCEMENT DIVISION


Docket/Case Number: 02-11-06-S


Allegations: IT WAS FOUND THAT: (1) CSFB ENGAGED IN FRAUDULENT CONDUCT INTHE ISSUANCE OF CERTAIN RESEARCH REPORTS, (2) CSFB FAILED TOCOMPLY WITH THE RECORD KEEPING REQUIREMENTS OF THE DIVISION,(3) CSFB ENGAGED IN DISHONEST AND UNETHICAL PRACTICES, AND (4)CSFB FAILED TO REASONABLY SUPERVISE ITS EMPLOYEES.










CEASE AND DESIST




Resolution:





Order


i


Initiated By: MINNESOTA DEPARTMENT OF COMMERCE




Docket/Case Number: SE2304867/BJP













CEASE AND DESIST


Resolution:





Order


i


Initiated By: MASSACHUSETTS OFFICE OF THE SECRETARY OF THE COMMONWEALTHSECURITIES DIVISION




Docket/Case Number: E-2002-41













CEASE AND DESIST


Resolution:





Order


i


Initiated By: MICHIGAN


Docket/Case Number: 03-041-M

Allegations: VIOLATIONS OF FEDERAL SECURITIES LAWS, NASD AND NYSE RULES.THIS ACTION WAS FILED IN RESPOSE TO THE SEC'S ACTION. FROM ATLEAST JULY 1998 THROUGH DECEMBER 2001, RESEARCH ANALYSTSWERE SUBJECT TO INAPPROPRIATE INFLUENCE BY INVESTMENTBANKING AT THE FIRM. THE FIRM PUBLISHED FALSE OR MISLEADINGRESEARCH, PUBLISHED EXAGGERATED OR UNWARRANTED RESEARCHOR RESEARCH THAT LACKED A REASONABLE BASIS, ENGAGED INIMPROPER "SPINNING" ACTIVITIES RELATING TO INITIAL PUBLICOFFERINGS, AND FAILED TO MAINTAIN APPROPRIATE SUPERVISION OVERIT'S RESEARCH AND INVESTMENT BANKING OPERATIONS.








Injunction


Docket/Case Number: 03-041-M





Resolution:


Sanction Details: COMPLY WITH THE TERMS OF THE SETTLEMENT IN THE CASE BROUGHTBY THE SEC.


Yes


Order


Initiated By: MICHIGAN OFFICE OF FINANCIAL AND INSURANCE SERVICESDEPARTMENT OF CONSUMER AND INDUSTRY SERVICES




Docket/Case Number: ORDER NO. 03-041-M













CEASE AND DESIST


Resolution:





Order


i


Initiated By: MARYLAND SECURITIES COMMISSIONER




CEASE AND DESIST













CEASE AND DESIST


Resolution:





Order


i


Initiated By: KENTUCKY DEPARTMENT OF FINANCIAL INSTITUTIONS




CEASE AND DESIST





Allegations: IT WAS FOUND THAT: (1) CSFB ENGAGED IN FRAUDULENT CONDUCT INTHE ISSUANCE OF CERTAIN RESEARCH REPORTS, (2)CSFB FAILED TOREASONABLY SUPERVISE ITS EMPLOYEES AND (3) CSFB FAILED TOCOMPLY WITH THE RECORD KEEPING REQUIREMENTS OF THE DIVISION.








Resolution:


Sanction Details: IT WAS FOUND THAT: (1) CSFB ENGAGED IN FRAUDULENT CONDUCT INTHE ISSUANCE OF CERTAIN RESEARCH REPORTS, AND (2) CSFB FAILEDTO COMPLY WITH THE RECORD KEEPING REQUIREMENTS OF THEDIVISION, (3) CSFB ENGAGED IN DISHONEST AND UNETHICAL PRACTICES,AND (4) CSFB FAILED TO REASONABLY SUPERVISE ITS EMPLOYEES.



Order


i


Initiated By: INDIANA OFFICE OF THE SECRETARY OF STATE SECURITIES DIVISION


Other


CEASE AND DESIST


Docket/Case Number: CAUSE NO. 03-0063 CO



Allegations: IT WAS FOUND THAT: (1) CSFB ENGAGED IN FRAUDULENT CONDUCT INTHE ISSUANCE OF CERTAIN RESEARCH REPORTS, (2) CSFB MADEUNTRUE STATEMENTS OF MATERIAL FACTS AND OMITTED TO STATECERTAIN MATERIAL FACTS IN CONNECTION WITH CERTAIN RESEZRCHREPORTS, (3) CSFB ENGAGED IN DISHONEST AND UNETHICALPRACTICES, AND (4) CSFB FAILED TO REASONABLY SUPERVISE ITSEMPLOYEES.








Resolution:





Order


i


Initiated By: IDAHO DIRECTOR OF THE DEPARTMENT OF FINANCE




CEASE AND DESIST





Allegations: IT WAS FOUND THAT CSFB ENGAGED IN DISHONEST AND UNETHICALPRACTICES.



Resolution:


Order











i


Initiated By: HAWAII DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS




CEASE AND DESIST


Docket/Case Number: SEU2002-044






Resolution:




Order









i


Initiated By: GEORGIA SEC. OF STATE-SECURITIES DIVISION


Cease and Desist


THE RESPONDENT SHALL PAY $500,000.00 IN CIVIL PENALTIES TO GA,$50,000.00 AS INVESTIGATIVE COSTS TO GA, AND $1,342,326.00 TO THEINVESTOR PROTECTION TRUST FOR THE PROMOTION OF INVESTORPROTECTION AND EDUCATION FOR THE BENEFIT OF GA INVESTORS ANDCITIZENS.


Docket/Case Number: EN-19515



Other Product Type(s): SEE #7

Allegations: THE RESPONDENT SETTLED ALLEGATIONS THAT UNDUE INFLUENCE BYINVESTMENT BANKING DIVISION ON SECURITIES RESEARCH AT FIRMRESULTED IN TAINTED RESEARCH.



Resolution:


Yes

Consent






Other Sanctions Ordered: SEE #2.

Sanction Details: FIRM AGREED TO PAY MONETARY PENALTIES, DISGORGEMENT, AND FUNDINDEPENDENT RESEARCH AND INVESTOR EDUCATION. FIRM ALSOAGREED TO REFORM PRACTICES TO MINIMIZE POSSIBILITY OF FUTURECONFLICTS OF INTEREST.


Yes



Initiated By: GEORGIA SECRETARY OF STATE - SECURITIES DIVISION


Cease and Desist


THE RESPONDENT SHALL PAY $500.000.00 IN CIVIL PENALITIES TOGEORGIA, $50,000.00 AS INVESTIGATIVE COSTS TO GEORGIA, AND$1,342,326.00 TO THE INVESTOR PROTECTION TRUST FOR THEPROMOTION OF INVESTOR PROTECTION AND EDUCATION FOR THEBENEFIT OF GEORGIA INVESTORS AND CITIZENS.


Docket/Case Number: EN-19515


Other Product Type(s): SEE #7

Allegations: THE RESPONDENT SETTLED ALLEGATIONS THAT UNDUE INFLUENCE BYINVESTMENT BANKING DIVISION ON SECURITIES AT FIRM RESULTED INTAINTED RESEARCH.



Resolution:



Consent







Sanction Details: CSFB AGREED TO PAY MONETARY PENALTIES, DISGORGEMENT, ANDREFORM PRACTICES TO MINIMIZE POSSIBILITY OF FUTURE CONFLICTSOF INTEREST.



i


Initiated By: DISTRICT OF COLUMBIA DEPARTMENT OF INSURANCE AND SECURITIESREGULATION




CEASE AND DESIST








Resolution:




Order






CSFB WILL CEASE AND DESIST FROM VIOLATING THE ACT AND WILLCOMPLY WITH THE ACT IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THIS ORDER AND WILL COMPLY WITH THEUNDERTAKINGS OF ADDENDUM A, INCORPORATED HEREIN BYREFERENCE.



i


Initiated By: DELAWARE SECURITIES COMMISSIONER


Other


RESEARCH


Docket/Case Number: C.A. NO.03-6-6



Allegations: IT WAS FOUND THAT: (1) CSFB ENGAGED IN FRAUDULENT CONDUCT INTHE ISSUANCE OF CERTAIN RESEARCH REPORTS, (2) CSFB FAILED TOCOMPLY WITH THE RECORD KEEPING REQUIREMENTS OF THE DIVISION,(3) CSFB ENGAGED IN DISHONEST AND UNETHICAL PRACTICES, AND (4)CSFB FAILED TO REASONABLY SUPERVISE ITS EMPLOYEES.



Resolution:

Other Sanctions Ordered: CSFB WILL CEASE AND DESIST FROM VIOLATING THE ACT AND WILLCOMPLY WITH THE ACT IN CONNECTION WITH THE RESEARCH PRACTICESREFERENCED IN THIS ORDER AND WILL COMPLY WITH THEUNDERTAKINGS OF ADDENDUM A, INCORPORATED HEREIN BYREFERENCE.

Sanction Details: A FINE OF $750,000. WAS PAID.


Order






Sanction Details: A FINE OF $750,000. WAS PAID.



i


Initiated By: COLORADO SECURITIES COMMISSIONER




CEASE AND DESIST


Docket/Case Number: ORDER 04-L-10



Allegations: IT WAS FOUND THAT: CSFB ENGAGED IN DISHONEST AND UNETHICALPRACTICES, AND (2) CSFB FAILED TO RESONABLY SUPERVISE ITSEMPLOYEES.



Resolution:





Order






THIS PROCEEDING AROSE OUT OF A JOINT INVESTIGATION BY THE SEC,THE NYSE, THE NASD AND VARIOUS STATE REGULATORY AGENCIES INTOALLEGED CONFLICTS OF INTEREST BETWEEN THE APPLICANT'S EQUITYRESEARCH DEPARTMENT AND ITS INVESTMENT BANKING DEPARTMENT.THE ENSUING "GLOBAL" SETTLEMENT INVOLVED THE APPLICANT ANDNINE OTHER LARGE SECURITIES FIRMS.


i


Initiated By: CALIFORNIA DEPARTMENT OF CORPORATION




CEASE AND DESIST





Allegations: IT WAS FOUND THAT: CSFB MADE UNTRUE STATEMENTS OF MATERIALFACTS AND OMITTED TO STATE CERTAIN MATERIAL FACTS INCONNECTION WITH CERTAIN RESEARCH REPORTS, AND (2) CSFB FAILEDTO REASONABLY SUPERVISE ITS EMPLOYEES.



Resolution:





Order





www.finra.org/brokercheck User GuidanceTHIS PROCEEDING AROSE OUT OF A JOINT INVESTIGATION BY THE SEC,THE NYSE, THE NASD AND VARIOUS STATE REGULATORY AGENCIES INTOALLEGED CONFLICTS OF INTEREST BETWEEN THE APPLICANT'S EQUITYRESEARCH DEPARTMENT AND ITS INVESTMENT BANKING DEPARTMENT.THE ENSUING "GLOBAL" SETTLEMENT INVOLVED THE APPLICANT ANDNINE OTHER LARGE SECURITIES FIRMS.


i


Initiated By: ALASKA DIVISION OF BANKING AND SECURITY




CEASE AND DESIST


Docket/Case Number: 04-08 S






Resolution:





Order


i












CEASE AND DESIST


Docket/Case Number: CO-2003



Allegations: IT WAS FOUND THAT: (1) CSFB FAILED TO REASONABLY SUPERVISE ITSEMPLOYEES, (2) CSFB ENGAGED IN ACTS OR PRACTICES THAT CREATEDOR MAINTAINED INAPPROPRIATE INFLUENCES BETWEEN DIFFERENTDIVISIONS, (3) CSFB VIOLATED CERTAIN NASD AND NYSE RULES, (4) CSFBISSUED CERTAIN RESEARCH REPORTS THAT WERE NOT BASED ONPRINCIPALS OF FAIR DEALING AND GOOD FAITH AND WHICH CONTAINEDEXAGGERATED CLAIMS, AND (5) CSFB ENGAGED IN FRAUDULENTCONDUCT IN THE ALLOCATION OF IPO'S.



Resolution:


Sanction Details: CEASE AND DESIST FROM VIOLATING THE ACT AND WILL COMPLY WITHTHE ACT IN CONNECTION WITH THE RESEARCH PRACTICES REFERENCEDIN THIS ORDER AND WILL COMPLY WITH THE UNDERTAKINGS OFADDENDUM A, INCORPORATED HERIN BY REFERENCE.

Firm Statement THIS PROCEEDING AROSE OUT OF A JOINT INVESTIGATION BY THESECURITIES AND EXCHANGE COMMISSION, THE NEW YORK STOCKEXCHANGE, THE NASD AND VARIOUS STATE REGULATORY AGENCIES INTOALLEGED CONFLICTS OF INTEREST BETWEEN THE APPLICANT'S EQUITYRESEARCH DEPARTMENT AND ITS INVESTMENT BANKING DEPARTMENT.THE ENSUING "GLOBAL" SETTLEMENT INVOLVED THE APPLICANT ANDNINE OTHER LARGE SECURITIES FIRMS.


Order







i


Initiated By: FLORIDA


Cease and Desist






Other Product Type(s): RESERACH.

Allegations: RESEARCH PRACTICES WERE IN QUESTION.



Resolution:


Sanction Details: NA

Regulator Statement RESEARCH PRACTICES WERE IN QUESTION.


No


Order









Initiated By: FLORIDA OFFICE OF FINANCIAL REGULATION




CEASE AND DESIST





IT WAS FOUND THAT: (1) CSFB ENGAGED IN FRAUDULENT CONDUCT INTHE ISSUANCE OF CERTAIN RESEARCH REPORTS, AND (2) CSFB FAILEDTO COMPLY WITH THE RECORD KEEPING REQUIREMENTS OF THEDIVISION.


Resolution:





Order


i


Allegations: THE FIRM ENGAGED IN UNETHICAL AND DISHONEST CONDUCT BY FAILINGTO ENSURE THAT ANALYSTS WHO ISSUED RESEARCH WERE ADEQUATELYINSULATED FROM PRESSURES AND INFLUENCES OF COVEREDCOMPANIES AND INVESTMENT BANKING. THE FIRM ALSO FAILED TOREASONABLY SUPERVISE ITS EMPLOYEES IN CONNECTION WITH THEISSUANCE OF RESEARCH. RESEARCH PRACTICES ALSO VIOLATEDRMSA'S ANTI-FRAUD PROVISIONS. THE FIRM ALSO ENGAGED IN ILLICITIPO ALLOCATION PRACTICES.







Initiated By: MAINE OFFICE OF SECURITIES


Cease and Desist







THE FIRM ENGAGED IN UNETHICAL AND DISHONEST CONDUCT BY FAILINGTO ENSURE THAT ANALYSTS WHO ISSUED RESEARCH WERE ADEQUATELYINSULATED FROM PRESSURES AND INFLUENCES OF COVEREDCOMPANIES AND INVESTMENT BANKING. THE FIRM ALSO FAILED TOREASONABLY SUPERVISE ITS EMPLOYEES IN CONNECTION WITH THEISSUANCE OF RESEARCH. RESEARCH PRACTICES ALSO VIOLATEDRMSA'S ANTI-FRAUD PROVISIONS. THE FIRM ALSO ENGAGED IN ILLICITIPO ALLOCATION PRACTICES.


Resolution:


Sanction Details: THE FIRM WAS ORDERED TO CEASE AND DESIST FROM VIOLATING THERMSA IN CONNECTION WITH CERTAIN CONFLICTS OF INTEREST TO WHICHITS RESEARCH ANALYSTS WERE SUBJECT AND TO IMPLEMENT CERTAINCHANGES WITH RESPECT TO ITS RESEARCH AND BANKING PRACTICES.THE CONSENT ORDER WAS EXECUTED AS PART OF A GLOBALSETTLEMENT OF COORDINATED INVESTIGATIONS ENTERED INTO BYFEDERAL AND STATE REGULATORS, AND SEVERAL LARGE BROKER-DEALERS WHO ENGAGED IN THE RESEARCH PRACTICES AT ISSUE. THEFIRM WAS ALSO ORDERED TO CEASE AND DESIST FROM IMPROPER IPOALLOCATION PRACTICES.


Yes


Order







Initiated By: MAINE OFFICE OF SECURITIES


Cease and Desist






Allegations: THE STATE ALLEGES THAT CSFB ENGAGED IN UNETHICAL ANDDISHONEST CONDUCT BY FAILING TO ENSURE THAT ANALYSTS WHOISSUED RESEARCH WERE ADEQUATELY INSULATED FROM PRESSURESAND INFLUENCES OF COVERED COMPANIES AND INVESTMENT BANKING.THE FIRM ALSO FAILED TO REASONABLY SUPERVISE ITS EMPLOYEES INCONNECTION WITH THE ISSUANCE OF RESEARCH. RESEARCHPRACTICES ALSO VIOLATED THE REVISED MAINE SECURITIES ACT'S ANTI-FRAUD PROVISIONS. THE FIRM ALSO ENGAGED IN ILLICIT IPO ALLOCATIONPRACTICES.



Resolution:


Sanction Details: CSFB WAS ORDERED TO CEASE AND DESIST FROM VIOLATING THEREVISED MAINE SECURITIES ACT IN CONNECTION WITH CERTAINCONFLICTS OF INTEREST TO WHICH ITS RESEARCH ANALYSTS WERESUBJECT AND TO IMPLEMENT CERTAIN CHANGES WITH RESPECT TO ITSRESEARCH AND BANKING PRACTICES. THE CONSENT ORDER WASEXECUTED AS PART OF A GLOBAL SETTLEMENT OF COORDINATEDINVESTIGATIONS ENTERED INTO BY FEDERAL AND STATE REGULATORS,AND SEVERAL LARGE BROKER-DEALERS WHO ENGAGED IN THERESEARCH PRACTICES AT ISSUE. THE FIRM WAS ALSO ORDERED TOCEASE AND DESIST FROM IMPROBER IPO ALLOCATION PRACTICES.


Order


i







Initiated By: NASD






Allegations: NASD CONDUCT RULES 2110 AND 3370, NASD MARKETPLACE RULES4642(B) AND 6955(A), AND SEC RULE 10B-10 - RESPONDENT MEMBER("FIRM") FAILED TO REPORT THROUGH THE AUTOMATED CONFIRMATIONTRANSACTION SERVICE ("ACT") LAST SALE REPORTS OF TRANSACTIONSIN NASDAQ SMALLCAP SECURITY. THE FIRM ALSO EXECUTED SHORTSALE ORDERS AND FAILED TO MAKE AN AFFIRMATIVE DETERMINATIONPRIOR TO EXECUTING SUCH ORDERS. THE FIRM, IN CUSTOMERTRANSACTIONS IN WHICH IT ACTED AS PRINCIPAL FOR ITS OWNACCOUNT, FAILED TO PROVIDE WRITTEN NOTIFICATION DISCLOSING TOITS CUSTOMER THE CORRECT REPORTED TRADE PRICE. IN ADDITION,THE FIRM, IN CUSTOMER TRANSACTIONS, PROVIDED INCORRECTWRITTEN NOTIFICATION DISCLOSING TO ITS CUSTOMER THAT THETRANSACTION WAS EXECUTED AT AN AVERAGE PRICE WHEN IT WAS NOT.THE FIRM ALSO FAILED, WITHIN 90 SECONDS AFTER EXECUTION, TOTRANSMIT THROUGH ACT LAST SALE REPORTS OF TRANSACTIONS INCONSOLIDATED QUOTATIONS SERVICE ("CQS") SECURITIES. IN ADDITION,THE FIRM TRANSMITTED TO OATS REPORTS THAT CONTAINEDINACCURATE, INCOMPLETE, OR IMPROPERLY FORMATTED DATA.SPECIFICALLY, THE REPORTS CONTAINED INACCURATE TIMESTAMPS ANDACCOUNT CODES. BECAUSE OF THE INACCURATE, INCOMPLETE ORIMPROPERLY FORMATTED DATA, THE OATS SYSTEM WAS UNABLE TO LINKTHE OATS EXECUTION REPORTS TO THE RELATED TRADE REPORTS INTOTHE AUTOMATED CONFIRMATION TRANSACTION SERVICE.FURTHERMORE, THE FIRM FAILED TO TIMELY REPORT TO OATSREPORTABLE ORDER EVENTS ("ROES"). THE FIRM ALSO SUBMITTED TOOATS REPORTS WITH RESPECT TO EQUITY SECURITIES TRADED ON THENASDAQ STOCK MARKET (THE "SUBJECT REPORTS") THAT WERE NOT INTHE ELECTRONIC FORM PRESCRIBED BY NASD. THE SUBJECT REPORTSWERE REJECTED BY THE OATS SYSTEM AND NOTICE OF SUCHREJECTION WAS MADE AVAILABLE TO THE FIRM ON THE OATS WEBSITE.THE FIRM DID NOT CORRECT OR REPLACE 100% OF THE SUBJECTREPORTS.









Resolution:




No




Initiated By: NATIONAL ASSOCIATION OF SECURITIES DEALER (NASD)


Censure






Allegations: ALLEGED VIOLATIONS OF NASD CONDUCT RULES 2110 AND 3370, NASDMARKETPLACE RULES 4642(B) AND 6955(A), AND SEC RULE 10B-10.



Resolution:












i


Initiated By: TEXAS


Cease and Desist


CEASE & DESIST FROM VIOLATING THE TEXAS SECURITIES ACT AND ANADMINISTRATIVE FINE & UNDERTAKING.


Docket/Case Number: SSB DKT NO 03-040;ORDER NO CDO/FIN-1537




Allegations: FROM JULY 1998 TO DECEMBER 2001, CSFB USED ITS EQUITY RESEARCHANALYSTS TO HELP SOLICIT AND CONDUCT INVESTMENT BANKINGBUSINESS. BY PROVIDING INCENTIVES FOR EQUITY RESEARCHANALYSTS TO ASSIST IN THE GENERATION OF INVESTMENT BANKINGREVENUES, CSFB CREATED & FOSTERED AN ENVIRONMENT W/CONFLICTS OF INTEREST THAT, IN SOME CIRCUMSTANCES, UNDERMINEDTHE INDEPENDENCE OF RESEARCH ANALYSTS & AFFECTED THEOBJECTIVITY OF THE REPORTS THEY ISSUED. IT WAS ORDERED THATCSFB WILL C & D FROM VIOLATING THE TEXAS SECURITIES ACT AND WILLCOMPLY WITH THE ACT IN CONNECTION W/ THE RESEARCH AND BANKINGPRACTICES REFERENCED IN THE ORDER & WILL COMPLY W/ THEUNDERTAKINGS. IN CONNECTION W/ THE SEC FINAL JUDGMENT &PURSUANT TO SECTION 23-1A(3) OF THE TEXAS SECURITIES ACT, THEFIRM PAID A SUM OF $4,819,970 AS AN ADMINISTRATIVE FINE.



Resolution:

Other Sanctions Ordered: CEASE AND DESIST FROM VIOLATING THE TEXAS SECURITIES ACT &COMPLY WITH THE UNDERTAKING ATTACHED TO THE ORDER.


Order







Sanction Details: $4,819,970 WAS PAID CONTEMPORANEOUSLY WITH DELIVERY OF THEORDER.


Initiated By: TEXAS


Cease and Desist


CEASE & DESIST FROM VIOLATING THE TEXAS SECURITIES ACT AND ANADMINISTRATIVE FINE & UNDERTAKING.


Docket/Case Number: SSB DKT NO 03-340;ORDER NO CDO/FIN-1537


Other Product Type(s): RESEARCH AND EQUITY PUBLIC OFFERINGS

Allegations: FROM JULY 1998 TO DECEMBER 2001, CSFB USED ITS EQUITY RESEARCHANALYSTS TO HELP SOLICIT AND CONDUCT INVESTMENT BANKINGBUSINESS. BY PROVIDING INCENTIVIES FOR EQUITY RESEARCHANALYSTS TO ASSIST IN THE GENERATION OF INVESTMENT BANKINGREVENUES, IT IS ALLEGED THAT CSFB CREATED & FOSTERED ANENVIRONMENT WITH CONFLICTS OF INTEREST THAT, IN SOMECIRCUMSTANCES, UNDERMINED THE INDEPENDENCE OF RESEARCHANALYSTS & AFFECTED THE OBJECTIVITY OF THE REPORTS THEYISSUED. IT WAS ORDERED THAT CSFB WILL CEASE & DESIST FROMVIOLATING THE TEXAS SECURITIES ACT AND WILL COMPLY WITH THE ACTIN CONNECTION WITH THE RESEARCH AND BANKING PRACTICESREFERENCED IN THE ORDER & WILL COMPLY WITH THE UNDERTAKINGS.IN CONNECTION WITH THE SEC FINAL JUDGMENT & PURSUANT TOSECTION 23-1A(3) OF THE TEXAS SECURITIES ACT, THE FIRM PAID A SUMOF $4,819,970 AS AN ADMINSTRATIVE FINE.



Resolution:




Order








i


Initiated By: CONNECTICUT








Other Product Type(s): ANALYST INDEPENDENCE (IPO)

Allegations: ON SEPTEMBER 12, 2003, THE BANKING COMMISSIONER ENTERED ACONSENT ORDER (DOCKET NO. CO-2003-6796-S) WITH RESPECT TOCREDIT SUISSE FIRST BOSTON LLC. THE AGENCY INVESTIGATIONCULMINATING IN THE ENTRY OF THE CONSENT ORDER FOCUSED ON THEFIRM'S RESEARCH PRACTICES FOR THE PERIOD 1998 THROUGH 2001,AND WAS PART OF SIMILAR INVESTIGATIONS CONDUCTED BY A MULTI-STATE TASK FORCE AND A JOINT TASK FORCE OF THE SEC, THE NEWYORK STOCK EXCHANGE AND THE NATIONAL ASSOCIATION OFSECURITIES DEALERS. THE GLOBAL RESOLUTION CAPPING THEINVESTIGATIONS RESULTED IN $75 MILLION ALLOCATED TO THE STATES;$75 MILLION REPRESENTING THE DISGORGEMENT OF COMMISSIONS ANDFEES; AND $50 MILLION TO BE EARMARKED FOR THE PROCUREMENT OFINDEPENDENT RESEARCH BY THE RESPONDENT. THE RESPONDENTALSO AGREED TO ABIDE BY CERTAIN UNDERTAKINGS DESIGNED TOSEPARATE INVESTMENT BANKING AND RESEARCH FUNCTIONS.

IN ENTERING THE CONSENT ORDER, THE COMMISSIONER FOUND THATTHE RESPONDENT HAD 1) VIOLATED SECTION 36B-4(A)(2) OF THE ACT BYISSUING FALSE AND MISLEADING RESEARCH REPORTS; 2) VIOLATEDSECTION 36B-4(B) OF THE ACT BY ENGAGING IN DISHONEST ORUNETHICAL BUSINESS PRACTICES; AND 3) FAILED TO ESTABLISH,ENFORCE AND MAINTAIN AN ADEQUATE SUPERVISORY SYSTEM TODETECT AND PREVENT REGULATORY VIOLATIONS.








Resolution:


Sanction Details: THE CONSENT ORDER MANDATED THAT THE RESPONDENT CEASE ANDDESIST FROM VIOLATING THE CONNECTICUT UNIFORM SECURITIES ACTAND FINED THE RESPONDENT $787,208.

Regulator Statement SEE ABOVE.


Consent


Initiated By: THE STATE OF CONNECTICUT








Allegations: THE COMMISSIONER FOUND THAT: (1) CSFB ISSUED CERTAIN RESEARCHREPORTS THAT WERE FALSE AND MISLEADING IN VIOLATION OF SECTION36B-4(A)(2) OF THE ACT; (2) CSFB ISSUED CERTAIN OTHER RESEARCHREPORTS, THE ISSUANCE OF WHICH CONSTITUTED A DISHONEST ORUNETHICAL BUSINESS PRACTICE IN VIOLATION OF SECTION 36B-4(B) OFTHE ACT; AND (3) CSFB FAILED TO ESTABLISH, ENFORCE AND MAINTAIN ASYSTEM TO SUPERVISE ITS ANALYSTS AND BANKERS THAT WASREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLESECURITIES LAWS AND REGULATIONS.



Resolution:


Consent







Sanction Details: THE CONSENT ORDER MANDATED THAT THE RESPONDENT CEASE ANDDESISIT FROM VIOLATING THE CONNECTICUT UNIFORM SECURITIES ACTAND FINED THE RESPONDENT $787,208.00

Firm Statement SEE ABOVE.


i









Allegations: **06/13/2003** STIPULATION AND CONSENT TO PENALTY FILED BY NYSEDIVISION OF ENFORCEMENT AND PENDING. CONSENTED TO FINDINGS:WITHOUT ADMITTING OR DENYING GUILT, CREDIT SUISSE FIRST BOSTONLLC CONSENTED TO A FINDING BY THE HEARING PANEL THAT THE FIRMVIOLATED: 1) EXCHANGE RULE 342 IN THAT IT FAILED TO REASONABLYPROVIDE APPROPRIATE PROCEDURES OF SUPERVISION AND CONTROLAND ESTABLISH A SYSTEM OF FOLLOW-UP AND REVIEW TO ENSURECOMPLIANCE WITH EXCHANGE RULES WITH RESPECT TO: A) THE REVIEWOF SALES LITERATURE PRIOR TO DISSEMINATION WITHIN THE FIRM; ANDB) THE DISSEMINATION OF MATERIAL, NON-PUBLIC INFORMATIONOBTAINED BY THE FIRM. 2) EXCHANGE RULE 401 IN THAT IT FAILED TOADHERE TO THE PRINCIPLES OF GOOD BUSINESS PRACTICES IN THAT ITFAILED TO REVIEW AND APPROVE THE CONTENTS OF SALES LITERATUREPRIOR TO THEIR WIDESPREAD DISSEMINATION WITHIN THE FIRM.STIPULATED SANCTION: THE IMPOSITION BY THE EXCHANGE OF THEPENALTY OF: A CENSURE; AND, A FINE OF $100,000.



Resolution:


Decision







Sanction Details: **07/22/2003** DECISION 03-138 ISSUED BY NYSE HEARING PANELDECISION: VIOLATED EXCHANGE RULES 342 AND 401 BY FAILING TOREVIEW AND APPROVE CONTENTS OF SALES LITERATURE PRIOR TOWIDESPREAD DISSEMINATION WITHIN THE FIRM, WHICH RESULTED IN THEDISSEMINATION OF MATERIAL, NON-PUBLIC INFORMATION -- CONSENT TOCENSURE, AND A FINE OF $100,000.

Regulator Statement **08/22/2003** THE DECISION IS NOW FINAL AND IS EFFECTIVEIMMEDIATELY. CONTACT: PEGGY GERMINO (212) 656-8450.



Initiated By: NEW YORK STOCK EXCHANGE, INC. ("NYSE") DIVISION OF ENFORCEMENT







Allegations: THE NYSE ALLEGED THAT THE FIRM VIOLATED: 1) EXCHANGE RULE 342 INTHAT IT FAILED TO REASONABLY PROVIDE APPROPRIATE PROCEDURESOF SUPERVISION AND CONTROL AND ESTABLISH A SYSTEM OF FOLLOW-UP AND REVIEW TO ENSURE COMPLIANCE WITH EXCHANGE RULES WITHRESPECT TO: A) THE REVIEW OF SALES LITERATURE PRIOR TODISSEMINATION WITHIN THE FIRM; AND B) THE DISSEMINATION OFMATERIAL, NON-PUBLIC INFORMATION OBTAINED BY THE FIRM. 2)EXCHANGE RULE 401 IN THAT IT FAILED TO ADHERE TO THE PRINCIPLESOF GOOD BUSINESS PRACTICES IN THAT IT FAILED TO REVIEW ANDAPPROVE THE CONTENTS OF SALES LITERATURE PRIOR TO THEIRWIDESPREAD DISSEMINATION WITHIN THE FIRM.











Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, CREDIT SUISSEFIRST BOSTON LLC CONSENTED TO A CENSURE AND THE IMPOSITION OFA $100,000.00 FINE.



i


Allegations: **4/21/03**STIPULATION AND CONSENT FILED BY THE NYSE DIVISION OFENFORCEMENT AND PENDING.CONSENTED FINDINGS:(1) VIOLATED SECTION 15(C) OF THE SECURITIES EXCHANGE ACT OF 1934(EXCHANGE ACT) RULE 15C-1 THEREUNDER, AND EXCHANGE RULES476(A)(6), 472 AND 401, BY ISSUING FRAUDULENT RESEARCH REPORTSABOUT TWO COMPANIES, DIGITAL IMPACT AND SYNOPSYS;(2) VIOLATEDEXCHANGE RULE 476(A)(6) BY ENGAGING IN CONDUCT INCONSISTENTWITH JUST AND EQUITABLE PRINCIPLES OF TRADE BY:A. ENGAGING INTHE ACTS AND PRACTICES THAT CREATED OR MAINTAINEDINAPPROPRIATE INFLUENCE BY THE INVESTMENT BANKING DEPARTMENTOVER RESEARCH ANALYSTS, THEREFORE IMPOSING CONFLICTS OFINTEREST ON ITS RESEARCH ANALYSTS, AND FAILING TO MANAGE THESECONFLICTS IN AN ADEQUATE OR APPROPRIATE MANNER;B.ISSUINGRESEARCH REPORTS ABOUT FOUR COMPANIES, NUMERICALTECHNOLOGIES, AGILENT, NPW, AND WINSTAR THAT WERE AFFECTED BYTHE CONFLICTS OF INTEREST IMPOSED ON ITS RESEARCH ANALYSTS, ASDESCRIBED ABOVE; ANDC.ENGAGING IN IMPROPER SPINNING; AND IPO DISTRIBUTION ACTIVITIES.(3) VIOLATED EXCHANGE RULE 401 BY FAILING TO ADHERE TO THEPRINCIPLES OF GOOD BUSINESS PRACTICE IN THE CONDUCT OF ITSBUSINESS AFFAIRS BY:A.ENGAGING IN THE ACTS AND PRACTICES THATCREATED OR MAINTAINED INAPPROPRIATE INFLUENCE BY THEINVESTMENT BANKING DEPARTMENT OVER RESEARCH ANALYSTS,THEREFORE IMPOSING CONFLICTS OF INTEREST ON ITS RESEARCHANALYSTS, AND FAILING TO MANAGE THESE CONFLICTS IN AN ADEQUATEOR APPROPRIATE MANNER; B. ISSUING RESEARCH REPORTS ABOUTFOUR COMPANIES, NUMERICAL TECHNOLOGIES, AGILENT, NPW, ANDWINSTAR THAT WERE AFFECTED BY THE CONFLICTS OF INTERESTIMPOSED ON ITS RESEARCH ANALYSTS, AS DESCRIBED ABOVE; AND C.BY ENGAGING IN IMPROPER SPINNING AND IPO DISTRIBUTION**CONTINUED IN HISPTORICAL FILE.**











Docket/Case Number: HPD#: 03-64



**4/21/03**STIPULATION AND CONSENT FILED BY THE NYSE DIVISION OFENFORCEMENT AND PENDING.CONSENTED FINDINGS:(1) VIOLATED SECTION 15(C) OF THE SECURITIES EXCHANGE ACT OF 1934(EXCHANGE ACT) RULE 15C-1 THEREUNDER, AND EXCHANGE RULES476(A)(6), 472 AND 401, BY ISSUING FRAUDULENT RESEARCH REPORTSABOUT TWO COMPANIES, DIGITAL IMPACT AND SYNOPSYS;(2) VIOLATEDEXCHANGE RULE 476(A)(6) BY ENGAGING IN CONDUCT INCONSISTENTWITH JUST AND EQUITABLE PRINCIPLES OF TRADE BY:A. ENGAGING INTHE ACTS AND PRACTICES THAT CREATED OR MAINTAINEDINAPPROPRIATE INFLUENCE BY THE INVESTMENT BANKING DEPARTMENTOVER RESEARCH ANALYSTS, THEREFORE IMPOSING CONFLICTS OFINTEREST ON ITS RESEARCH ANALYSTS, AND FAILING TO MANAGE THESECONFLICTS IN AN ADEQUATE OR APPROPRIATE MANNER;B.ISSUINGRESEARCH REPORTS ABOUT FOUR COMPANIES, NUMERICALTECHNOLOGIES, AGILENT, NPW, AND WINSTAR THAT WERE AFFECTED BYTHE CONFLICTS OF INTEREST IMPOSED ON ITS RESEARCH ANALYSTS, ASDESCRIBED ABOVE; ANDC.ENGAGING IN IMPROPER SPINNING; AND IPO DISTRIBUTION ACTIVITIES.(3) VIOLATED EXCHANGE RULE 401 BY FAILING TO ADHERE TO THEPRINCIPLES OF GOOD BUSINESS PRACTICE IN THE CONDUCT OF ITSBUSINESS AFFAIRS BY:A.ENGAGING IN THE ACTS AND PRACTICES THATCREATED OR MAINTAINED INAPPROPRIATE INFLUENCE BY THEINVESTMENT BANKING DEPARTMENT OVER RESEARCH ANALYSTS,THEREFORE IMPOSING CONFLICTS OF INTEREST ON ITS RESEARCHANALYSTS, AND FAILING TO MANAGE THESE CONFLICTS IN AN ADEQUATEOR APPROPRIATE MANNER; B. ISSUING RESEARCH REPORTS ABOUTFOUR COMPANIES, NUMERICAL TECHNOLOGIES, AGILENT, NPW, ANDWINSTAR THAT WERE AFFECTED BY THE CONFLICTS OF INTERESTIMPOSED ON ITS RESEARCH ANALYSTS, AS DESCRIBED ABOVE; AND C.BY ENGAGING IN IMPROPER SPINNING AND IPO DISTRIBUTION**CONTINUED IN HISPTORICAL FILE.**


Resolution:


Sanction Details: **4/22/03** HEARING PANEL DECISION 03-64 ISSUED. DECISION:VIOLATEDSEA SECTION 15(C), SEC RULE 15C-1 AND EXCHANGE RULES 476(A)(6), 472AND 401 BY ISSUING FRAUDULENT RESEARCH REPORTS ABOUT TWOCOMPANIES; VIOLATED EXCHANGE RULES 476(A)(6) AND 401 BYENGAGING IN ACTS AND PRACTICES THAT CREATED OR MAINTAINEDINAPPROPRIATE INFLUENCE BY INVESTMENT BANKING OVER RESEARCHANALYSTS, THEREFORE IMPOSING CONFLICTS OF INTEREST ON ITSRESEARCH ANALYSTS, BY FAILING TO MANAGE THESE CONFLICTS IN ANADEQUATE OR APPROPRIATE MANNER, BY ISSUING CERTAIN RESEARCHREPORTS THAT WERE AFFECTED BY THE CONFLICTS OF INTEREST ANDBY ENGAGING IN IMPROPER SPINNING AND IPO DISTRIBUTION ACTIVITIES;VIOLATED EXCHANGE RULE 472 BY ISSUING CERTAIN RESEARCHREPORTS THAT CONTAINED RECOMMENDATIONS AND/OR RATINGS THATWERE EXAGGERATED OR UNWARRANTED AND/OR CONTAINED OPINIONSFOR WHICH THERE WAS NO REASONABLE BASIS AND BY ISSUINGRESEARCH REPORTS WHICH FAILED TO DISCLOSE THAT IT AND ITSANALYSTS HAD A PROPRIETARY INTEREST IN A COMPANY; VIOLATED SEASECTION 17(A), SEC RULE 17A-3 AND EXCHANGE RULE 440 BY ENGAGINGIN IMPROPER SPINNING AND IPO DISTRIBUTION ACTIVITIES AND FAILINGTO MAINTAIN ADEQUATE BOOKS AND RECORDS; AND VIOLATEDEXCHANGE RULE 342 BY FAILING TO ESTABLISH AND MAINTAIN ADEQUATEPOLICIES, SYSTEMS, AND PROCEDURES FOR SUPERVISION ANDCONTROL OF ITS RESEARCH AND INVESTMENT BANKING DEPARTMENTSCONSENT TO CENSURE, A TOTAL PAYMENT OF $200,000,000 AND ANUNDERTAKING.


Decision






**4/22/03** HEARING PANEL DECISION 03-64 ISSUED. DECISION:VIOLATEDSEA SECTION 15(C), SEC RULE 15C-1 AND EXCHANGE RULES 476(A)(6), 472AND 401 BY ISSUING FRAUDULENT RESEARCH REPORTS ABOUT TWOCOMPANIES; VIOLATED EXCHANGE RULES 476(A)(6) AND 401 BYENGAGING IN ACTS AND PRACTICES THAT CREATED OR MAINTAINEDINAPPROPRIATE INFLUENCE BY INVESTMENT BANKING OVER RESEARCHANALYSTS, THEREFORE IMPOSING CONFLICTS OF INTEREST ON ITSRESEARCH ANALYSTS, BY FAILING TO MANAGE THESE CONFLICTS IN ANADEQUATE OR APPROPRIATE MANNER, BY ISSUING CERTAIN RESEARCHREPORTS THAT WERE AFFECTED BY THE CONFLICTS OF INTEREST ANDBY ENGAGING IN IMPROPER SPINNING AND IPO DISTRIBUTION ACTIVITIES;VIOLATED EXCHANGE RULE 472 BY ISSUING CERTAIN RESEARCHREPORTS THAT CONTAINED RECOMMENDATIONS AND/OR RATINGS THATWERE EXAGGERATED OR UNWARRANTED AND/OR CONTAINED OPINIONSFOR WHICH THERE WAS NO REASONABLE BASIS AND BY ISSUINGRESEARCH REPORTS WHICH FAILED TO DISCLOSE THAT IT AND ITSANALYSTS HAD A PROPRIETARY INTEREST IN A COMPANY; VIOLATED SEASECTION 17(A), SEC RULE 17A-3 AND EXCHANGE RULE 440 BY ENGAGINGIN IMPROPER SPINNING AND IPO DISTRIBUTION ACTIVITIES AND FAILINGTO MAINTAIN ADEQUATE BOOKS AND RECORDS; AND VIOLATEDEXCHANGE RULE 342 BY FAILING TO ESTABLISH AND MAINTAIN ADEQUATEPOLICIES, SYSTEMS, AND PROCEDURES FOR SUPERVISION ANDCONTROL OF ITS RESEARCH AND INVESTMENT BANKING DEPARTMENTSCONSENT TO CENSURE, A TOTAL PAYMENT OF $200,000,000 AND ANUNDERTAKING.

Regulator Statement **05/23/03** THE DECISION IS NOW FINAL AND IS EFFECTIVE IMMEDIATELY.CONTACT: EVELYN PENA 212-656-5211.


Initiated By: NEW YORK STOCK EXCHANGE, INC. ("NYSE")DIVISION OF ENFORCEMENT




CENSURE; DISGORGEMENT; UNDERTAKING


Docket/Case Number: NYSE HEARING PANEL DECISION 03-64


Other Product Type(s): RESEARCH AND EQUITY PUBLIC OFFERING

Allegations: THE NYSE ALLEGED VIOLATIONS OF SECTIONS 15(C) AND 17(A) OF THESECURITIES EXCHANGE ACT OF 1934 (THE "EXCHANGE ACT")AND RULES15C-1 AND 17A-3 THEREUNDER AND RULES 342, 401, 440, 472 AND 476 OFTHE NYSE. THE NYSE ALLEGED THAT (1) FROM JULY 1998 THROUGHDECEMBER 2001, CREDIT SUISSE FIRST BOSTON LLC ("CSFB") CREATEDAND FOSTERED AN ENVIRONMENT WITH CONFLICTS OF INTEREST THAT,IN SOME CIRCUMSTANCES, UNDERMINED THE INDEPENDENCE OF EQUITYRESEARCH ANALYSTS AND AFFECTED THE OBJECTIVITY OF THEREPORTS THEY ISSUED, AND (2) FROM 1999 UNTIL APRIL 2001, CSFB,THROUGH ITS TECHNOLOGY PRIVATE CLIENT SERVICES GROUP,ENGAGED IN IMPROPER "SPINNING" ACTIVITIES RELATING TO INITIALPUBLIC OFFERINGS.



Resolution:

Other Sanctions Ordered: $50 MILLION FOR THE PROCUREMENT OF INDEPENDENT RESEARCH.

Sanction Details: CSFB AGREED TO A CENSURE BY THE NYSE AND TO A TOTAL PAYMENT OF$200 MILLION, AS SPECIFIED IN THE FINAL JUDGMENT ORDERED ON ARELATED ACTION FILED BY THE SECURITIES AND EXCHANGECOMMISSION (THE FINAL JUDGMENT), AS FOLLOWS: $75 MILLION AS AFINE; $75 MILLION AS DISGORGEMENT OF COMMISSIONS, FEES ANDOTHER MONIES; AND $50,000,000 TO BE USED FOR THE PROCUREMENTOF INDEPENDENT RESEARCH. THE MONETARY SANCTIONS IMPOSED BYTHE NYSE SHALL BE REDUCED BY THE AMOUNTS PAID BY CSFBPURSUANT TO THE FINAL JUDGMENT.

Sanctions Ordered: CensureMonetary/Fine $75,000,000.00Disgorgement/Restitution







Sanction Details: CSFB AGREED TO A CENSURE BY THE NYSE AND TO A TOTAL PAYMENT OF$200 MILLION, AS SPECIFIED IN THE FINAL JUDGMENT ORDERED ON ARELATED ACTION FILED BY THE SECURITIES AND EXCHANGECOMMISSION (THE FINAL JUDGMENT), AS FOLLOWS: $75 MILLION AS AFINE; $75 MILLION AS DISGORGEMENT OF COMMISSIONS, FEES ANDOTHER MONIES; AND $50,000,000 TO BE USED FOR THE PROCUREMENTOF INDEPENDENT RESEARCH. THE MONETARY SANCTIONS IMPOSED BYTHE NYSE SHALL BE REDUCED BY THE AMOUNTS PAID BY CSFBPURSUANT TO THE FINAL JUDGMENT.

Firm Statement ON APRIL 21, 2003, CSFB SUBMITTED A STIPULATION AND CONSENT TOTHE NYSE, WHICH WAS ACCEPTED BY EXCHANGE HEARING PANELDECISION 03-64 ON APRIL 22, 2003. IN THE STIPULATION AND CONSENT,SOLELY FOR THE PURPOSE OF THE PROCEEDING AND ANY OTHERACTION IN WHICH THE NYSE IS A PARTY AND WITHOUT ADMITTING ORDENYING THE FINDINGS SET FORTH IN THE STIPULATION AND CONSENT,CSFB CONSENTED TO FINDINGS THAT CSFB VIOLATED CERTAIN NYSERULES AND EXCHANGE ACT RULES AS SET FORTH IN 7 ABOVE ANDAGREED TO THE SANCTIONS SET FORTH IN 12 ABOVE.


i


Allegations: NASD CONDUCT RULES 2110, 2210(D)(1), 2210(D)(1)(2), 2210(D)(2), 3010 AND3110, AND SECTIONS 15(C) AND 17(A) OF THE EXCHANGE ACT AND RULES15C1-2 AND 17A-3 THEREUNDER - RESPONDENT MEMBER PUBLISHEDFRAUDULENT RESEARCH REPORTS ON COMPANIES THAT WERE FALSEAND MISLEADING; ISSUED RESEARCH REPORTS ON COMPANIES THATWERE NOT BASED ON PRINCIPLES OF FAIR DEALING AND GOOD FAITH,AND DID NOT PROVIDE A SOUND BASIS FOR EVALUATING FACTS,CONTAINED EXAGGERATED OR UNWARRANTED CLAIMS, CONTAINEDOPINIONS FOR WHICH THERE WAS NO REASONABLE BASIS, AND/ORLACKED FULL AND ACCURATE DISCLOSURES AND ISSUED RESEARCHREPORTS ON A COMPANY THAT, AT TIMES, FAILED TO DISCLOSE THAT THEFIRM AND ITS RESEARCH ANALYSTS HAD PROPRIETARY INTERESTS INTHE COMPANY; ENGAGED IN ACTS AND PRACTICES THAT CREATED ORMAINTAINED INAPPROPRIATE INFLUENCE BY INVESTMENT BANKING OVERRESEARCH ANALYSTS AND THEREFORE IMPOSED CONFLICTS OFINTEREST ON ITS RESEARCH ANALYSTS AND FAILED TO MANAGE THESECONFLICTS IN AN ADEQUATE OR APPROPRIATE MANNER; ENGAGED INIMPROPER "SPINNING" AND IPO DISTRIBUTION PRACTICES AND FAILED TOMAINTAIN BOOKS AND RECORDS IN CONNECTION WITH THOSEPRACTICES; FAILED TO ESTABLISH AND MAINTAIN A SYSTEM TOSUPERVISE THE ACTIVITIES OF EACH REGISTERED REPRESENTATIVE ANDASSOCIATED PERSON THAT IS REASONABLE DESIGNED TO ACHIEVECOMPLIANCE WITH APPLICABLE SECURITIES LAWS AND REGULATIONSAND WITH THE RULES OF NASD.







Initiated By: NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.







NASD CONDUCT RULES 2110, 2210(D)(1), 2210(D)(1)(2), 2210(D)(2), 3010 AND3110, AND SECTIONS 15(C) AND 17(A) OF THE EXCHANGE ACT AND RULES15C1-2 AND 17A-3 THEREUNDER - RESPONDENT MEMBER PUBLISHEDFRAUDULENT RESEARCH REPORTS ON COMPANIES THAT WERE FALSEAND MISLEADING; ISSUED RESEARCH REPORTS ON COMPANIES THATWERE NOT BASED ON PRINCIPLES OF FAIR DEALING AND GOOD FAITH,AND DID NOT PROVIDE A SOUND BASIS FOR EVALUATING FACTS,CONTAINED EXAGGERATED OR UNWARRANTED CLAIMS, CONTAINEDOPINIONS FOR WHICH THERE WAS NO REASONABLE BASIS, AND/ORLACKED FULL AND ACCURATE DISCLOSURES AND ISSUED RESEARCHREPORTS ON A COMPANY THAT, AT TIMES, FAILED TO DISCLOSE THAT THEFIRM AND ITS RESEARCH ANALYSTS HAD PROPRIETARY INTERESTS INTHE COMPANY; ENGAGED IN ACTS AND PRACTICES THAT CREATED ORMAINTAINED INAPPROPRIATE INFLUENCE BY INVESTMENT BANKING OVERRESEARCH ANALYSTS AND THEREFORE IMPOSED CONFLICTS OFINTEREST ON ITS RESEARCH ANALYSTS AND FAILED TO MANAGE THESECONFLICTS IN AN ADEQUATE OR APPROPRIATE MANNER; ENGAGED INIMPROPER "SPINNING" AND IPO DISTRIBUTION PRACTICES AND FAILED TOMAINTAIN BOOKS AND RECORDS IN CONNECTION WITH THOSEPRACTICES; FAILED TO ESTABLISH AND MAINTAIN A SYSTEM TOSUPERVISE THE ACTIVITIES OF EACH REGISTERED REPRESENTATIVE ANDASSOCIATED PERSON THAT IS REASONABLE DESIGNED TO ACHIEVECOMPLIANCE WITH APPLICABLE SECURITIES LAWS AND REGULATIONSAND WITH THE RULES OF NASD.


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, RESPONDENTMEMBER CONSENTED TO THE DESCRIBED SANCTIONS AND TO THEENTRY OF FINDINGS, THEREFORE THE FIRM IS CENSURED AND FINED$200,000.000. AS SPECIFIED IN THE FINAL JUDGMENT ORDERED ON ARELATED ACTION FILED BY THE SEC AS FOLLOWS: $75,000,000 AS A FINE,$75,000,000 AS DISGORGEMENT OF COMMISSIONS, FEES AND OTHERMONIES, AND $50,000.000 TO BE USED FOR THE PROCUREMENT OFINDEPENDENT RESEARCH. THE MONETARY SANCTIONS IMPOSED BYNASD SHALL BE REDUCED BY THE AMOUNTS PAID BY RESPONDENTPURSUANT TO THE FINAL JUDGMENT.

Regulator Statement RESPONDENT AGREES THAT IT SHALL NOT SEEK OR ACCEPT, DIRECTLYOR INDIRECTLY, REIMBURSEMENT OR INDEMNIFICATION, INCLUDING BUTNOT LIMITED TO PAYMENT MADE PURSUANT TO ANY INSURANCE POLICY,WITH REGARD TO ANY FINE/PENALTY AMOUNTS THAT RESPONDENTSHALL PAY PURSUANT TO SECTION II OF THE FINAL JUDGMENT,REGARDLESS OF WHETHER SUCH FINE/PENALTY AMOUNTS OR ANY PARTTHEREOF ARE ADDED TO THE DISTRIBUTION FUND ACCOUNT OROTHERWISE USED FOR THE BENEFIT OF INVESTORS. RESPONDENTFURTHER AGREES THAT IT SHALL NOT CLAIM, ASSET, OR APPLY FOR A TAXDEDUCTION OR TAX CREDIT WITH REGARD TO ANY FEDERAL, STATE, ORLOCAL TAX FOR ANY FINE/PENALTY AMOUNTS THAT RESPONDENT SHALLPAY PURSUANT TO SECTION II OF THE FINAL JUDGMENT, REGARDLESS OFWHETHER SUCH FINE/PENALTY AMOUNTS OR ANY PART THEREOF AREADDED TO THE DISTRIBUTION FUND ACCOUNT OR OTHERWISE USED FORTHE BENEFIT OF INVESTORS. RESPONDENT UNDERSTANDS ANDACKNOWLEDGES THAT THESE PROVISIONS ARE NOT INTENDED TO IMPLYTHAT NASD WOULD AGREE THAT ANY OTHER AMOUNTS RESPONDENTSHALL PAY PURSUANT TO THE FINAL JUDGMENT MAY BE REIMBURSED ORINDEMNIFIED (WHETHER PURSUANT TO AN INSURANCE POLICY OROTHERWISE) UNDER APPLICABLE LAW OR MAY BE THE BASIS FOR ANYTAX DEDUCTION OR TAX CREDIT WITH REGARD TO ANY FEDERAL, STATE,OR LOCAL TAX.








RESPONDENT AGREES THAT IT SHALL NOT SEEK OR ACCEPT, DIRECTLYOR INDIRECTLY, REIMBURSEMENT OR INDEMNIFICATION, INCLUDING BUTNOT LIMITED TO PAYMENT MADE PURSUANT TO ANY INSURANCE POLICY,WITH REGARD TO ANY FINE/PENALTY AMOUNTS THAT RESPONDENTSHALL PAY PURSUANT TO SECTION II OF THE FINAL JUDGMENT,REGARDLESS OF WHETHER SUCH FINE/PENALTY AMOUNTS OR ANY PARTTHEREOF ARE ADDED TO THE DISTRIBUTION FUND ACCOUNT OROTHERWISE USED FOR THE BENEFIT OF INVESTORS. RESPONDENTFURTHER AGREES THAT IT SHALL NOT CLAIM, ASSET, OR APPLY FOR A TAXDEDUCTION OR TAX CREDIT WITH REGARD TO ANY FEDERAL, STATE, ORLOCAL TAX FOR ANY FINE/PENALTY AMOUNTS THAT RESPONDENT SHALLPAY PURSUANT TO SECTION II OF THE FINAL JUDGMENT, REGARDLESS OFWHETHER SUCH FINE/PENALTY AMOUNTS OR ANY PART THEREOF AREADDED TO THE DISTRIBUTION FUND ACCOUNT OR OTHERWISE USED FORTHE BENEFIT OF INVESTORS. RESPONDENT UNDERSTANDS ANDACKNOWLEDGES THAT THESE PROVISIONS ARE NOT INTENDED TO IMPLYTHAT NASD WOULD AGREE THAT ANY OTHER AMOUNTS RESPONDENTSHALL PAY PURSUANT TO THE FINAL JUDGMENT MAY BE REIMBURSED ORINDEMNIFIED (WHETHER PURSUANT TO AN INSURANCE POLICY OROTHERWISE) UNDER APPLICABLE LAW OR MAY BE THE BASIS FOR ANYTAX DEDUCTION OR TAX CREDIT WITH REGARD TO ANY FEDERAL, STATE,OR LOCAL TAX.


Initiated By: NASD, INC




CENSURE; DISGORGEMENT; UNDERTAKING





Allegations: THE NASD ALLEGED VIOLATIONS OF RULES 2110, 2210(D)(1), 2210(D)(2),3110 AND 3010 OF THE NASD CONDUCT RULES AND SECTIONS 15(C) AND17(A) OF THE EXCHANGE ACT AND RULES 15C1-2 AND 17A-3THEREUNDER. THE NASD ALLEGED THAT (1) FROM JULY 1998 THROUGHDECEMBER 2001, CREDIT SUISSE FIRST BOSTON LLC ("CSFB") CREATEDAND FOSTERED AN ENVIRONMENT WITH CONFLICTS OF INTEREST THAT,IN SOME CIRCUMSTANCES, UNDERMINED THE INDEPENDENCE OF EQUITYRESEARCH ANALYSTS AND AFFECTED THE OBJECTIVITY OF THEREPORTS THEY ISSUED, AND (2) FROM 1999 UNTIL APRIL 2001, CSFB,THROUGH ITS TECHNOLOGY PRIVATE CLIENT SERVICES GROUP,ENGAGED IN IMPROPER "SPINNING" ACTIVITIES RELATING TO INITIALPUBLIC OFFERINGS.











Sanction Details: CSFB AGREED TO A CENSURE BY THE NASD AND TO A TOTAL PAYMENT OF$200 MILLION, AS SPECIFIED IN THE FINAL JUDGMENT ORDERED ON ARELATED ACTION FILED BY THE SECURITIES AND EXCHANGECOMMISSION (THE FINAL JUDGMENT), AS FOLLOWS: $75 MILLION AS AFINE; $75 MILLION AS DISGORGEMENT OF COMMISSIONS, FEES ANDOTHER MONIES; AND $50 MILLION TO BE USED FOR THE PROCUREMENTOF INDEPENDENT RESEARCH. THE MONETARY SANCTIONS IMPOSED BYTHE NASD SHALL BE REDUCED BY THE AMOUNTS PAID BY CSFBPURSUANT TO THE FINAL JUDGMENT.

Firm Statement ON APRIL 21, 2003, CSFB SUBMITTED AN AWC TO THE NASD, WHICH WASREVIEWED AND ACCEPTED BY THE NASD ON THE SAME DATE. IN THEAWC, SOLELY FOR THE PURPOSE OF THE PROCEEDING AND ANY OTHERACTION IN WHICH THE NASD IS A PARTY AND WITHOUT ADMITTING ORDENYING THE FINDINGS SET FORTH IN THE AWC, CSFB CONSENTED TOFINDINGS THAT CSFB VIOLATED CERTAIN NASD CONDUCT RULES AS SETFORTH IN 7 ABOVE AND AGREED TO THE SANCTIONS SET FORTH IN 12ABOVE.



i




Other


FINE AND CENSURED


Docket/Case Number: ENFORCEMENT NO. 2002-08

Principal Product Type: Index Option(s)


Allegations: VIOLATED EXCHANGE RULES 707,1042A AND 748(G)



Resolution: Settled








Sanction Details: CENSURED, FINED $50,000.00 AND RESTITUTION TO THE EXCHANGE FORDISBURSEMENT BY THE EXCHANGE TO AFFECTED CONTRA-SIDE PARTIESAS IDENTIFIED BY THE EXCHANGE.



i








Other Product Type(s): UNKNOWN TYPE OF SECURITIES

Allegations: NASD RULE 2110 - WITHOUT ADMITTING OR DENYING THE ALLEGATIONS,THE RESPONDENT FIRM CONSENTED TO THE ENTRY OF FINDINGS THAT ITFAILED TO REPORT TO FIXED INCOME PRICING SYSTEM ("FIPS")TRANSACTIONS IN FIPS SECURITIES WITHIN FIVE MINUTES AFTEREXECUTION. SUCH CONDUCT CONSTITUTES A PATTERN OR PRACTICE OFTHE LATE REPORTING AND IS CONSIDERED CONDUCT INCONSISTENTWITH HIGH STANDARDS OF COMMERCIAL HONOR AND JUST ANDEQUITABLE PRINCIPALS OF TRADE.



Resolution:


Sanction Details: A CENSURE AND A FINE OF $7,500.









Initiated By: NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. (DEPARTMENT OFMARKET REGULATION)


Censure


FINE OF $7,500.





Allegations: ALLEGED THAT CSFBC VIOLATED NASD RULE 2110. WITHOUT ADMITTINGOR DENYING THE ALLEGATIONS, CSFBC CONSENTED TO THE ENTRY OFFINDINGS THAT IT FAILED TO REPORT FIXED INCOME PRICING SYSTEM("FIPS") TRANSACTIONS IN FIPS SECURITIES WITHIN FIVE MINUTES AFTEREXECUTION.



Resolution:


Sanction Details: A CENSURE AND FINE OF $7,500.00




i


Allegations: THE MASSACHUSETTS SECURITIES DIVISION (MSD) ALLEGED VIOLATIONSOF SECTIONS 101, 203 AND 204 OF CHAPTER 110A OF MASSACHUSETTSGENERAL LAWS. THE MSD ALLEGED THAT (1) FROM JULY 1998 THROUGHDECEMBER 2001, CREDIT SUISSE FIRST BOSTON LLC (CSFB) CREATEDAND FOSTERED AN ENVIRONMENT WITH CONFLICTS OF INTEREST THAT,IN SOME CIRCUMSTANCES, UNDERMINED THE INDEPENDENCE OF EQUITYRESEARCH ANALYSTS AND AFFECTED THE OBJECTIVITY OF THEREPORTS THEY ISSUED, AND (2) FROM 1999 UNTIL APRIL 2001, CSFB,THROUGH ITS TECHNOLOGY PRIVATE CLIENT SERVICES GROUP,ENGAGED IN IMPROPER "SPINNING" ACTIVITIES RELATING TO INITIALPUBLIC OFFERINGS.







Initiated By: COMMONWEALTH OF MASSACHUSETTS


Injunction


CIVIL AND ADMINISTRATIVE PENALTY; DISGORGEMENT; UNDERTAKING


Docket/Case Number: MASSACHUSETTS CASE NO. E-2002-41



THE MASSACHUSETTS SECURITIES DIVISION (MSD) ALLEGED VIOLATIONSOF SECTIONS 101, 203 AND 204 OF CHAPTER 110A OF MASSACHUSETTSGENERAL LAWS. THE MSD ALLEGED THAT (1) FROM JULY 1998 THROUGHDECEMBER 2001, CREDIT SUISSE FIRST BOSTON LLC (CSFB) CREATEDAND FOSTERED AN ENVIRONMENT WITH CONFLICTS OF INTEREST THAT,IN SOME CIRCUMSTANCES, UNDERMINED THE INDEPENDENCE OF EQUITYRESEARCH ANALYSTS AND AFFECTED THE OBJECTIVITY OF THEREPORTS THEY ISSUED, AND (2) FROM 1999 UNTIL APRIL 2001, CSFB,THROUGH ITS TECHNOLOGY PRIVATE CLIENT SERVICES GROUP,ENGAGED IN IMPROPER "SPINNING" ACTIVITIES RELATING TO INITIALPUBLIC OFFERINGS.


Resolution:


Sanction Details: CSFB AGREED TO A TOTAL PAYMENT OF $200 MILLION, AS SPECIFIED INTHE FINAL JUDGMENT ORDERED ON A RELATED ACTION FILED BY THESECURITIES AND EXCHANGE COMMISSION (THE FINAL JUDGMENT), ASFOLLOWS: $75 MILLION AS A FINE; $75 MILLION AS DISGORGEMENT OFCOMMISSIONS, FEES AND OTHER MONIES; AND $50 MILLION TO BE USEDFOR THE PROCUREMENT OF INDEPENDENT RESEARCH. THE MONETARYSANCTIONS IMPOSED BY THE MSD SHALL BE REDUCED BY THE AMOUNTSPAID BY CSFB PURSUANT TO THE FINAL JUDGMENT

Firm Statement ON APRIL 24, 2003, CSFB CONSENTED TO ENTRY BY THE MSD OF ANADMINISTRATIVE CONSENT ORDER AND, PURSUANT THERETO, ENTEREDINTO A SETTLEMENT AGREEMENT WITH THE MSD. IN THE SETTLEMENTAGREEMENT, SOLELY FOR THE PURPOSE OF THE PROCEEDING AND ANYOTHER ACTION IN WHICH THE MSD IS A PARTY AND WITHOUT ADMITTINGOR DENYING THE FINDINGS SET FORTH IN THE SETTLEMENT AGREEMENT,CSFB CONSENTED TO FINDINGS THAT CSFB VIOLATED CERTAIN MSDRULES AS SET FORTH IN 7 ABOVE AND AGREED TO THE SANCTIONS SETFORTH IN 12 ABOVE.

Sanctions Ordered: Monetary/Fine $75,000,000.00Disgorgement/Restitution

Settled


i



















Resolution:

Other Sanctions Ordered: (1) A TOTAL FINE OF $75,000 TO BE PAID JOINTLY TO THE CBOE ANDTHE PHLX;(2) RESTITUTION IN THE AMOUNT OF $30,000 TO THE CUSTOMERDESCRIBED IN PARAGRAPH 4 ABOVE;(3) DISGORGEMENT OF $5,250 OF CERTAIN COMMISSIONS RESULTINGFROM THE TRANSACTION DESCRIBED IN PARAGRAPH 5 ABOVE TO BEPAID JOINTLY TO THE CBOE AND THE PHLX;(4) A CENSURE; AND(5) CSFB AGREES TO COMPLETE THE FOLLOWING UNDERTAKINGS:A) CSFB IS ORDERED TO PARTICIPATE IN AN EDUCATIONALUNDERTAKING PURSUANT TO WHICH TRADERS IN RESPONDENT?SEXCHANGE TRADED DERIVATIVES GROUP INCLUDING ANY FIRM TRADERSTHAT CONDUCT A OPTIONS DERIVATIVES BUSINESS WILL ATTEND ANEDUCATIONAL SESSION CONDUCTED BY CSFB?S OUTSIDE LEGALCOUNSEL, CBOE AND PHLX; ANDB) CSFB SHALL SUBMIT TO THE CBOE AND PHLX A SEPARATEOPTIONS COMPLIANCE MANUAL WITHIN 60 DAYS FROM THE ISSUANCE OFTHE DECISION.

Sanction Details: (1) A TOTAL FINE OF $75,000 TO BE PAID JOINTLY TO THE CBOE ANDTHE PHLX;(2) RESTITUTION IN THE AMOUNT OF $30,000 TO THE CUSTOMERDESCRIBED IN PARAGRAPH 4 ABOVE;(3) DISGORGEMENT OF $5,250 OF CERTAIN COMMISSIONS RESULTINGFROM THE TRANSACTION DESCRIBED IN PARAGRAPH 5 ABOVE TO BEPAID JOINTLY TO THE CBOE AND THE PHLX;(4) A CENSURE; AND(5) CSFB AGREES TO COMPLETE THE FOLLOWING UNDERTAKINGS:A) CSFB IS ORDERED TO PARTICIPATE IN AN EDUCATIONALUNDERTAKING PURSUANT TO WHICH TRADERS IN RESPONDENT'SEXCHANGE TRADED DERIVATIVES GROUP INCLUDING ANY FIRM TRADERSTHAT CONDUCT A OPTIONS DERIVATIVES BUSINESS WILL ATTEND ANEDUCATIONAL SESSION CONDUCTED BY CSFB?S OUTSIDE LEGALCOUNSEL, CBOE AND PHLX; ANDB) CSFB SHALL SUBMIT TO THE CBOE AND PHLX A SEPARATEOPTIONS COMPLIANCE MANUAL WITHIN 60 DAYS FROM THE ISSUANCE OFTHE DECISION.








Sanction Details: (1) A TOTAL FINE OF $75,000 TO BE PAID JOINTLY TO THE CBOE ANDTHE PHLX;(2) RESTITUTION IN THE AMOUNT OF $30,000 TO THE CUSTOMERDESCRIBED IN PARAGRAPH 4 ABOVE;(3) DISGORGEMENT OF $5,250 OF CERTAIN COMMISSIONS RESULTINGFROM THE TRANSACTION DESCRIBED IN PARAGRAPH 5 ABOVE TO BEPAID JOINTLY TO THE CBOE AND THE PHLX;(4) A CENSURE; AND(5) CSFB AGREES TO COMPLETE THE FOLLOWING UNDERTAKINGS:A) CSFB IS ORDERED TO PARTICIPATE IN AN EDUCATIONALUNDERTAKING PURSUANT TO WHICH TRADERS IN RESPONDENT'SEXCHANGE TRADED DERIVATIVES GROUP INCLUDING ANY FIRM TRADERSTHAT CONDUCT A OPTIONS DERIVATIVES BUSINESS WILL ATTEND ANEDUCATIONAL SESSION CONDUCTED BY CSFB?S OUTSIDE LEGALCOUNSEL, CBOE AND PHLX; ANDB) CSFB SHALL SUBMIT TO THE CBOE AND PHLX A SEPARATEOPTIONS COMPLIANCE MANUAL WITHIN 60 DAYS FROM THE ISSUANCE OFTHE DECISION.

Regulator Statement CREDIT SUISSE FIRST BOSTON CORPORATION ("CSFB") STIPULATED TOTHE FOLLOWING CONDUCT: ON MAY 22, 2001, A CSFB UPSTAIRS FIRMTRADER ("FIRM TRADER"), WHILE ACTING ON BEHALF OF CSFB, ANDHOLDING A CUSTOMER ORDER ("ORIGINAL ORDER") TO SELL 3000NASDAQ-100? INDEX TRACKING STOCK ("QQQ") JUN 49 CALLS AND BUY4000 QQQ JUN 52 CALLS ("RATIO CALL SPREAD"), REQUESTED A MARKETFOR THE RATIO CALL SPREAD FROM THE CBOE QQQ TRADING CROWD.THE CBOE QQQ TRADING CROWD PROVIDED TO THE INDEPENDENTBROKER REPRESENTING CSFB A MARKET OF A NET CREDIT PRICE OF $3AND THE INDEPENDENT BROKER INFORMED CSFB THAT CSFB COULDNOT CROSS THE RATIO CALL SPREAD WITH A SOLICITED SPREAD ORDERWITH LEGS HAVING AN EFFECTIVE NET CREDIT PRICE OF $2.90. CSFBSUBSEQUENTLY ALLOWED THE RATIO CALL SPREAD TO BE TRADED ATTHE PHILADELPHIA STOCK EXCHANGE (?PHLX?) AT A NET CREDIT PRICEOF $2.90. A PORTION OF THE RATIO CALL SPREAD WAS CROSSED WITH ASOLICITED BROKER/DEALER ORDER. THE ORIGINAL ORDER RECEIVED ALESS FAVORABLE PRICE ($30,000) THAN COULD HAVE BEEN OBTAINED ATTHE CBOE. AS A RESULT, CSFB FAILED TO EXERCISE DUE DILIGENCE INHANDLING THE ORIGINAL ORDER TO SELL THE RATIO CALL SPREAD,WHEREBY AFTER SOLICITING FROM THE CBOE QQQ TRADING CROWD AMARKET AND THE CROWD MAKING A MARKET OF A NET CREDIT PRICE OF$3, CSFB SUBSEQUENTLY ALLOWED THE RATIO CALL SPREAD TO BETRADED AT THE PHLX AT A NET CREDIT PRICE OF $2.90. A PORTION OFTHE RATIO CALL SPREAD WAS CROSSED WITH A SOLICITEDBROKER/DEALER ORDER. AS A RESULT, THE ORIGINAL ORDER RECEIVEDA LESS FAVORABLE PRICE ($30,000) THAN COULD HAVE BEEN OBTAINEDAT THE CBOE. (CBOE RULE 4.1.)











CENSURE, DISGORGEMENT


Docket/Case Number: CBOE-02-0002



Allegations: ALLEGED VIOLATION OF CBOE RULE 4.1, "JUST AND EQUITABLEPRINCIPLES OF TRADE" AND PHLX RULE 707, "JUST AND EQUITABLEPRINCIPLES OF TRADE".



Resolution:


Sanction Details: (1) A TOTAL FINE OF $75,000 PAID JOINTLY TO THE CBOE AND PHLX; (2)RESTITUTION IN THE AMOUNT OF $30,000 TO THE UNSOLICITEDCUSTOMER; (3) DISGORGEMENT OF $5,250 OF CERTAIN COMMISSIONSPAID JOINTLY TO THE CBOE AND THE PHLX; (4) A CENSURE; AND (5) CSFBAGREED TO COMPLETE THE FOLLOWING UNDERTAKINGS: A) THE CSFBOPTIONS TRADING DESK WAS ORDERED TO PARTICIPATE IN ANEDUCATIONAL SESSION CONDUCTED BY OUTSIDE COUNSEL, THE CBOEAND THE PHLX; AND B) CSFB HAD TO SUMBIT A SEPARATE COMPLIANCEMANUAL TO THE CBOE AND PHLX WITHIN 60 DAYS FROM THE ISSUANCEOF THE DECISION.

Firm Statement ON MAY 22, 2001, CREDIT SUISSE FIRST BOSTON CORPORATION ("CSFB")UPSTAIRS FIRM OPTIONS TRADER ("FIRM TRADER"), RECEIVED ACUSTOMER ORDER TO SELL 3000 NASDAQ-100 INDEX TRACKING STOCK("QQQ") JUNE 49 CALLS AND BUY 4000 QQQ JUNE 52 CALLS ("RATIO CALLSPREAD"). CSFB HAD A BROKER/DEALER CUSTOMER THAT WANTED TOPARTIALLY CROSS THE CUSTOMER ORDER. THE FIRM TRADER TOOKBOTH THE CUSTOMER ORDER AND THE SOLICITED BROKER/DEALERCUSTOMER ORDER TO THE CBOE TO PARTIALLY CROSS AT A NET PRICEOF 2.90. THE FIRM TRADER WAS TOLD BY THE CBOE CROWD THAT HEWAS BLOCKED AND COULDN'T CROSS THESE ORDERS. THE FIRMTRADER TOOK THE ORDERS TO THE PHLX AND WAS ALLOWED TO CROSSTHEM AT 2.90.THE CBOE STAFF CONCLUDED THAT THE FIRM TRADERVIOLATED CBOE RULE 4.1, "JUST AND EQUITABLE PRINCIPLES OF TRADE"BY INTENTIONALLY DISREGARDING A BETTER BID AND EXECUTING THEORDER AT A WORSE PRICE THAN AVAILABLE. THE PHLX STAFF ALSOALLEGED THAT THE FIRM TRADER VIOLATED PHLX RULE 707, "JUST ANDEQUITABLE PRINCIPLES OF TRADE".







www.finra.org/brokercheck User GuidanceON MAY 22, 2001, CREDIT SUISSE FIRST BOSTON CORPORATION ("CSFB")UPSTAIRS FIRM OPTIONS TRADER ("FIRM TRADER"), RECEIVED ACUSTOMER ORDER TO SELL 3000 NASDAQ-100 INDEX TRACKING STOCK("QQQ") JUNE 49 CALLS AND BUY 4000 QQQ JUNE 52 CALLS ("RATIO CALLSPREAD"). CSFB HAD A BROKER/DEALER CUSTOMER THAT WANTED TOPARTIALLY CROSS THE CUSTOMER ORDER. THE FIRM TRADER TOOKBOTH THE CUSTOMER ORDER AND THE SOLICITED BROKER/DEALERCUSTOMER ORDER TO THE CBOE TO PARTIALLY CROSS AT A NET PRICEOF 2.90. THE FIRM TRADER WAS TOLD BY THE CBOE CROWD THAT HEWAS BLOCKED AND COULDN'T CROSS THESE ORDERS. THE FIRMTRADER TOOK THE ORDERS TO THE PHLX AND WAS ALLOWED TO CROSSTHEM AT 2.90.THE CBOE STAFF CONCLUDED THAT THE FIRM TRADERVIOLATED CBOE RULE 4.1, "JUST AND EQUITABLE PRINCIPLES OF TRADE"BY INTENTIONALLY DISREGARDING A BETTER BID AND EXECUTING THEORDER AT A WORSE PRICE THAN AVAILABLE. THE PHLX STAFF ALSOALLEGED THAT THE FIRM TRADER VIOLATED PHLX RULE 707, "JUST ANDEQUITABLE PRINCIPLES OF TRADE".


i


Initiated By: CHICAGO BOARD OF TRADE FLOOR GOVERNORS COMMITTEE("COMMITTEE")




Docket/Case Number: 2002-INV-1B



Allegations: WITHOUT ADMITTING OR DENYING ANY VIOLATION, CSFB CONSENTED TOTHE ENTRY OF A CONCLUSION THAT THE FLOOR GOVERNORSCOMMITTEE HAD REASON TO BELIEVE THAT CSFB VIOLATED REGULATION9B.16, IN THAT ORDERS ARISING FROM PRE-EXECUTION DISCUSSIONSFACILITATED BY CSFB'S FOREIGN AFFILIATE WERE NOT ENTERED INACCORDANCE WITH PRESCRIBED REQUIREMENTS; AND REGULATION9B.16A, IN THAT CSFB'S FOREIGN AFFILIATE KNOWINGLY ASSUMED THEOPPOSITE SIDE OF ORDERS ENTERED ON BEHALF OF ITS OWN ACCOUNT.



Resolution:



Settled







Sanction Details: A FINE OF $15,000.


i








Other Product Type(s): UNKNOWN TYPE OF SECURITIES.

Allegations: NASD RULES 3320, 4613(B) AND SEC RULE 11AC1-1 - WITHOUT ADMITTINGOR DENYING THE ALLEGATIONS, THE RESPONDENT FIRM CONSENTED TOTHE ENTRY OF FINDINGS THAT IT WAS A REGISTERED MARKET MAKER INTHE SECURITIES. IN EACH OF THE SPECIFIC INSTANCES, AN ORDER WASPRESENTED TO RESPONDENT FIRM AT RESPONDENT FIRM'S PUBLISHEDBID OR PUBLISHED OFFER IN AN AMOUNT UP TO ITS PUBLISHEDQUOTATION SIZE. THE RESPONDENT FIRM FAILED TO EXECUTE THEORDERS UPON PRESENTMENT AND THEREBY FAILED TO HONOR ITSPUBLICATION.



Resolution:


Sanction Details: A CENSURE AND FINE OF $20,000.




Allegations: SEC RULE 11AC1-1, NASD CONDUCT RULE 3320, NASD MARKETPLACERULE 4613(B)-WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, CSFBCONSENTS TO THE ENTRY OF FINDINGS THAT IT WAS A REGISTEREDMARKET MAKER IN THE SECURITIES. IN EACH OF THE SPECIFICINSTANCES, AN ORDER WAS PRESENTED TO CSFB AT CSFB'S PUBLISHEDBID OR PUBLISHED OFFER IN AN AMOUNT UP TO ITS PUBLISHEDQUOTATION SIZE. CSFB FAILED TO EXECUTE THE ORDERS DESCRIBEDAND THEREBY FAILED TO HONOR ITS PUBLISHED QUOTATION.







Initiated By: NATIONAL ASSOCIATION OF SECURITES DEALERS, INC.







Allegations: SEC RULE 11AC1-1, NASD CONDUCT RULE 3320, NASD MARKETPLACERULE 4613(B)-WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, CSFBCONSENTS TO THE ENTRY OF FINDINGS THAT IT WAS A REGISTEREDMARKET MAKER IN THE SECURITIES. IN EACH OF THE SPECIFICINSTANCES, AN ORDER WAS PRESENTED TO CSFB AT CSFB'S PUBLISHEDBID OR PUBLISHED OFFER IN AN AMOUNT UP TO ITS PUBLISHEDQUOTATION SIZE. CSFB FAILED TO EXECUTE THE ORDERS DESCRIBEDAND THEREBY FAILED TO HONOR ITS PUBLISHED QUOTATION.


Resolution:


Sanction Details: A CENSURE AND FINE OF $20,000.




i


Allegations: NASD RULE 2110, 2330, 2710, 3010 AND 3110 AND SEC RULE 17A-3 -WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRMCONSENTED TO THE FINDINGS THAT IT OBTAINED IMPROPER PAYMENTSFROM CUSTOMERS IN EXCHANGE FOR ALLOCATIONS OF SHARES IN IPOSUNDERWRITTEN BY THE FIRM; SHARED IN ITS CUSTOMER PROFITSTHROUGH IMPROPER PAYMENTS MADE IN EXCHANGE FOR ALLOCATIONSOF SHARES IN IPOS UNDERWRITTEN BY THE FIRM; REPEATEDLY FAILEDTO FILE INFORMATION THAT DESCRIBED THE IPO ALLOCATION ANDPROFIT-SHARING ARRANGEMENTS ENGAGED IN BY THE FIRM INCONNECTION WITH ITS DISTRIBUTION OF PUBLIC OFFERINGS OFSECURITIES THAT MAY HAVE HAD A BEARING ON THE NASDS REVIEW OFTHE OFFERINGS; FAILED TO REFLECT ACCURATELY THE TERMS ANDCONDITIONS OF ITS ORDERS BECAUSE IT FAILED TO RECORD THAT THECOMMISSIONS, MARK-UPS AND MARKDOWNS PAID BY CUSTOMERS WEREPROFIT SHARING WITH THE FIRM IN EXCHANGE FOR IPO ALLOCATIONS;AND, THE FIRMS SUPERVISORY SYSTEM WAS INADEQUATE AND NOTREASONABLY DESIGNED TO ACHIEVE COMPLIANCE IN THE FOLLOWINGAREAS: (I) IMPROPERLY RECORDING PROFIT SHARING PAYMENTS ASCOMMISSIONS WITHOUT RECORDING ALL THE TERMS AND CONDITIONSOF EACH CUSTOMER ORDER, (II) SHARING THE PROFITS OF CUSTOMERACCOUNTS THROUGH THE PAYMENT OF UNREASONABLE AND EXCESSIVECOMMISSIONS IN EXCHANGE FOR THE ALLOCATION OF IPO SHARES, AND(III) PROVIDING AND FILING INFORMATION TO THE NASD IN CONNECTIONWITH ITS REVIEW OF UNDERWRITING TERMS AND ARRANGEMENTSUNDER RULE 2710.







Initiated By: NATIONAL ASSOCIATION OF SECURITIES, INC.







NASD RULE 2110, 2330, 2710, 3010 AND 3110 AND SEC RULE 17A-3 -WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRMCONSENTED TO THE FINDINGS THAT IT OBTAINED IMPROPER PAYMENTSFROM CUSTOMERS IN EXCHANGE FOR ALLOCATIONS OF SHARES IN IPOSUNDERWRITTEN BY THE FIRM; SHARED IN ITS CUSTOMER PROFITSTHROUGH IMPROPER PAYMENTS MADE IN EXCHANGE FOR ALLOCATIONSOF SHARES IN IPOS UNDERWRITTEN BY THE FIRM; REPEATEDLY FAILEDTO FILE INFORMATION THAT DESCRIBED THE IPO ALLOCATION ANDPROFIT-SHARING ARRANGEMENTS ENGAGED IN BY THE FIRM INCONNECTION WITH ITS DISTRIBUTION OF PUBLIC OFFERINGS OFSECURITIES THAT MAY HAVE HAD A BEARING ON THE NASDS REVIEW OFTHE OFFERINGS; FAILED TO REFLECT ACCURATELY THE TERMS ANDCONDITIONS OF ITS ORDERS BECAUSE IT FAILED TO RECORD THAT THECOMMISSIONS, MARK-UPS AND MARKDOWNS PAID BY CUSTOMERS WEREPROFIT SHARING WITH THE FIRM IN EXCHANGE FOR IPO ALLOCATIONS;AND, THE FIRMS SUPERVISORY SYSTEM WAS INADEQUATE AND NOTREASONABLY DESIGNED TO ACHIEVE COMPLIANCE IN THE FOLLOWINGAREAS: (I) IMPROPERLY RECORDING PROFIT SHARING PAYMENTS ASCOMMISSIONS WITHOUT RECORDING ALL THE TERMS AND CONDITIONSOF EACH CUSTOMER ORDER, (II) SHARING THE PROFITS OF CUSTOMERACCOUNTS THROUGH THE PAYMENT OF UNREASONABLE AND EXCESSIVECOMMISSIONS IN EXCHANGE FOR THE ALLOCATION OF IPO SHARES, AND(III) PROVIDING AND FILING INFORMATION TO THE NASD IN CONNECTIONWITH ITS REVIEW OF UNDERWRITING TERMS AND ARRANGEMENTSUNDER RULE 2710.


Resolution:

Other Sanctions Ordered: THE FIRM AGREES AND UNDERTAKES TO ENGAGE AN INDEPENDENTCONSULTANT TO CONDUCT A REVIEW OF THE IMPLEMENTATION OFREVISED PROCEDURES REGARDING THE AREAS OF ITS BUSINESSDESCRIBED IN THIS AWC. THE INDEPENDENT CONSULTANT SHALL NOT BEUNACCEPTABLE TO NASDR. SUCH REVIEW WILL BEGIN ONE YEAR FROMTHE DATE OF THIS AWC, AND A REPORT WILL BE PROVIDED TO THE STAFFOF NASDR AND THE CHIEF EXECUTIVE OFFICER, GLOBAL GENERALCOUNSEL AND GLOBAL HEAD OF COMPLIANCE OF THE FIRM WITHIN 30DAYS OF COMPLETION OF THE REVIEW, BUT NO LATER THAN 18 MONTHSFROM THE DATE OF THIS AWC, UNLESS OTHERWISE AGREED TO BYNASDR STAFF. THIS REPORT WILL INCLUDE: (I) THE SCOPE AND METHODOF THE REVIEW; (II) FINDINGS MADE REGARDING THE FIRM'SCOMPLIANCE FOLLOWING THE DATE OF THIS SETTLEMENT WITH ITSREVISED PROCEDURES AND (III) IF APPROPRIATE, RECOMMENDATIONSDESIGNED TO ENSURE THAT CSFB ALLOCATION PRACTICES ANDPROCEDURES ARE FAIR, EQUITABLE AND IN COMPLIANCE WITH THEFEDERAL SECURITIES LAWS AND THE NASD RULES OF CONDUCT. WITHIN90 DAYS OF ITS RECEIPT OF THIS REPORT, UNLESS OTHERWISE AGREEDTO BY THE STAFF, THE FIRM SHALL REPORT TO THE STAFF OF NASDR ONANY ACTIONS IT IS TAKING IN RESPONSE TO THE REPORT OF THEINDEPENDENT CONSULTANT.








THE FIRM AGREES AND UNDERTAKES TO ENGAGE AN INDEPENDENTCONSULTANT TO CONDUCT A REVIEW OF THE IMPLEMENTATION OFREVISED PROCEDURES REGARDING THE AREAS OF ITS BUSINESSDESCRIBED IN THIS AWC. THE INDEPENDENT CONSULTANT SHALL NOT BEUNACCEPTABLE TO NASDR. SUCH REVIEW WILL BEGIN ONE YEAR FROMTHE DATE OF THIS AWC, AND A REPORT WILL BE PROVIDED TO THE STAFFOF NASDR AND THE CHIEF EXECUTIVE OFFICER, GLOBAL GENERALCOUNSEL AND GLOBAL HEAD OF COMPLIANCE OF THE FIRM WITHIN 30DAYS OF COMPLETION OF THE REVIEW, BUT NO LATER THAN 18 MONTHSFROM THE DATE OF THIS AWC, UNLESS OTHERWISE AGREED TO BYNASDR STAFF. THIS REPORT WILL INCLUDE: (I) THE SCOPE AND METHODOF THE REVIEW; (II) FINDINGS MADE REGARDING THE FIRM'SCOMPLIANCE FOLLOWING THE DATE OF THIS SETTLEMENT WITH ITSREVISED PROCEDURES AND (III) IF APPROPRIATE, RECOMMENDATIONSDESIGNED TO ENSURE THAT CSFB ALLOCATION PRACTICES ANDPROCEDURES ARE FAIR, EQUITABLE AND IN COMPLIANCE WITH THEFEDERAL SECURITIES LAWS AND THE NASD RULES OF CONDUCT. WITHIN90 DAYS OF ITS RECEIPT OF THIS REPORT, UNLESS OTHERWISE AGREEDTO BY THE STAFF, THE FIRM SHALL REPORT TO THE STAFF OF NASDR ONANY ACTIONS IT IS TAKING IN RESPONSE TO THE REPORT OF THEINDEPENDENT CONSULTANT.

Sanction Details: A FINE OF $30 MILLION AND DISGORGEMENT OF $70 MILLION. THEAMOUNT TO BE PAID TO NASD REGULATION, INC. SHALL BE REDUCED BYAMOUNTS PAID BY CSFB PURSUANT TO ITS AGREEMENT TO PAY A $15MILLION CIVIL PENALTY AND $35 MILLION IN DISGORGEMENT IN ARELATED PROCEEDING.

Regulator Statement IN CONNECTION WITH ITS ALLOCATION AND SALE OF INITIAL PUBLICOFFERINGS (IPOS) FROM APRIL 1999 THROUGH JUNE 2000, THE FIRMWRONGFULLY EXTRACTED TENS OF MILLIONS OF DOLLARS OF PROFITSFROM NUMEROUS CLIENT ACCOUNTS RECEIVING IPO ALLOCATIONS. THEFIRM ALLOCATED HOT IPO SHARES (THOSE THAT IMMEDIATELY TRADE ATA PREMIUM IN THE AFTERMARKET) TO CLIENTS WHO WERE WILLING TOSHARE THEIR IPO PROFITS BY PAYING THE FIRM INFLATED BROKERAGECOMMISSIONS ON AGENCY TRANSACTIONS IN LISTED SECURITIESUNRELATED TO THE IPOS.THE FIRMS VIOLATIVE PRACTICE OF SHARING IN THE PROFITS OF CLIENTACCOUNTS IN EXCHANGE FOR ALLOCATING HOT IPO SHARES WASWIDESPREAD AND INVOLVED PRIMARILY UNREGULATED ACCOUNTS. ITTOOK PLACE IN ACCOUNTS SERVICED BY THE INSTITUTIONAL LISTEDSALES TRADING DESK (INSTITUTIONAL SALES TRADING), PRIVATE CLIENTSERVICES GROUP (PCS), AND ITS PCS TECHNOLOGY GROUP (PCS TECH),AND IMPLEMENTED THROUGH CERTAIN SENIOR MANAGERS IN THEEQUITY SALES AND EQUITY CAPITAL MARKETS DEPARTMENTS. THE FIRMALLOCATED HOT IPO SHARES TO CERTAIN CUSTOMERS WHO, INEXCHANGE, PAID THE FIRM INFLATED BROKERAGE COMMISSIONS.THOUSANDS OF TRANSACTIONS WERE EXECUTED WITH EXCESSIVECOMMISSIONS, INCLUDING HUNDREDS OF TRADES WITH COMMISSIONCHARGES OF $1.00 OR MORE PER SHARE AND OTHERS WITHCOMMISSIONS AS HIGH AS $3.15 PER SHARE (52 TIMES THE NORMALCHARGE) FOR THE EXECUTION OF AN AGENCY TRADE IN A HIGHLY LIQUIDEXCHANGE-TRADED SECURITY. DURING THE RELEVANT PERIOD, THEFIRM SHARED IN THE PROFITS OF AT LEAST 300 ACCOUNTS. DURING THERELEVANT PERIOD, CUSTOMERS WITH PROFIT-SHARING ARRANGEMENTSPAID TENS OF MILLIONS OF DOLLARS IN INFLATED COMMISSIONS ONTRADES. IN ONE QUARTER ALONE, THIS ACCOUNTED FOR OVER 22PERCENT OF THE FIRMS COMMISSION REVENUE. WHILE THESEEXTRAORDINARY AMOUNTS WERE RECORDED ON THE FIRMS BOOKS ANDRECORDS AS COMMISSIONS ON SECONDARY TRADING, THEYREPRESENTED A SHARE OF THE FIRMS CLIENT PROFITS THAT WERE PAIDTO THE FIRM IN EXCHANGE FOR THE ALLOCATION OF HOT IPOS.






IN CONNECTION WITH ITS ALLOCATION AND SALE OF INITIAL PUBLICOFFERINGS (IPOS) FROM APRIL 1999 THROUGH JUNE 2000, THE FIRMWRONGFULLY EXTRACTED TENS OF MILLIONS OF DOLLARS OF PROFITSFROM NUMEROUS CLIENT ACCOUNTS RECEIVING IPO ALLOCATIONS. THEFIRM ALLOCATED HOT IPO SHARES (THOSE THAT IMMEDIATELY TRADE ATA PREMIUM IN THE AFTERMARKET) TO CLIENTS WHO WERE WILLING TOSHARE THEIR IPO PROFITS BY PAYING THE FIRM INFLATED BROKERAGECOMMISSIONS ON AGENCY TRANSACTIONS IN LISTED SECURITIESUNRELATED TO THE IPOS.THE FIRMS VIOLATIVE PRACTICE OF SHARING IN THE PROFITS OF CLIENTACCOUNTS IN EXCHANGE FOR ALLOCATING HOT IPO SHARES WASWIDESPREAD AND INVOLVED PRIMARILY UNREGULATED ACCOUNTS. ITTOOK PLACE IN ACCOUNTS SERVICED BY THE INSTITUTIONAL LISTEDSALES TRADING DESK (INSTITUTIONAL SALES TRADING), PRIVATE CLIENTSERVICES GROUP (PCS), AND ITS PCS TECHNOLOGY GROUP (PCS TECH),AND IMPLEMENTED THROUGH CERTAIN SENIOR MANAGERS IN THEEQUITY SALES AND EQUITY CAPITAL MARKETS DEPARTMENTS. THE FIRMALLOCATED HOT IPO SHARES TO CERTAIN CUSTOMERS WHO, INEXCHANGE, PAID THE FIRM INFLATED BROKERAGE COMMISSIONS.THOUSANDS OF TRANSACTIONS WERE EXECUTED WITH EXCESSIVECOMMISSIONS, INCLUDING HUNDREDS OF TRADES WITH COMMISSIONCHARGES OF $1.00 OR MORE PER SHARE AND OTHERS WITHCOMMISSIONS AS HIGH AS $3.15 PER SHARE (52 TIMES THE NORMALCHARGE) FOR THE EXECUTION OF AN AGENCY TRADE IN A HIGHLY LIQUIDEXCHANGE-TRADED SECURITY. DURING THE RELEVANT PERIOD, THEFIRM SHARED IN THE PROFITS OF AT LEAST 300 ACCOUNTS. DURING THERELEVANT PERIOD, CUSTOMERS WITH PROFIT-SHARING ARRANGEMENTSPAID TENS OF MILLIONS OF DOLLARS IN INFLATED COMMISSIONS ONTRADES. IN ONE QUARTER ALONE, THIS ACCOUNTED FOR OVER 22PERCENT OF THE FIRMS COMMISSION REVENUE. WHILE THESEEXTRAORDINARY AMOUNTS WERE RECORDED ON THE FIRMS BOOKS ANDRECORDS AS COMMISSIONS ON SECONDARY TRADING, THEYREPRESENTED A SHARE OF THE FIRMS CLIENT PROFITS THAT WERE PAIDTO THE FIRM IN EXCHANGE FOR THE ALLOCATION OF HOT IPOS.


Initiated By: NASD REGULATION, INC. ("NASDR")




CENSURE; DISGORGEMENT; APPOINTMENT OF AN INDEPENDENTCONSULTANT TO REVIEW IMPLEMENTED POLICIES AND PROCEDURESCONCERNING IPO ALLOCATIONS.





Allegations: NASDR ALLEGED VIOLATIONS OF RULES 2110, 2330, 2710(B)(5)(B), 3010,AND 3110 OF THE NASD CONDUCT RULES AND SECTION 17(A) OF THEEXCHANGE ACT AND RULE 17A-3 THEREUNDER. NASDR ALLEGED THAT,DURING THE PERIOD APRIL 1999 THROUGH JUNE 2000, CERTAIN CSFBEMPLOYEES ALLOCATED SHARES IN IPOS TO CUSTOMERS WITH WHOMCSFB HAD IMPROPER PROFIT-SHARING ARRANGEMENTS. THE NASDRALLEGED THAT CSFB FAILED TO RECORD THE PROFIT-SHARINGARRANGEMENTS AS A TERM AND CONDITION OF THESE TRADES. THENASDR ALSO ALLEGED THAT CSFB FAILED TO INFORM THE NASD OFTHESE PROFIT-SHARING ARRANGEMENTS AND THAT CSFB'SSUPERVISORY SYSTEM WAS INADEQUATE IN THAT IT FAILED TO DETECTOR PREVENT THESE VIOLATIONS.


Appealed To and Date AppealFiled:

N/A.


Resolution:








Other Sanctions Ordered: CSFB ADOPTED REVISED POLICIES AND PROCEDURES RELATING TO THEALLOCATION OF IPO SHARES AND AGREED TO ENGAGE AN INDEPENDENTCONSULTANT TO CONDUCT A REVIEW OF THE IMPLEMENTATION OF THEREVISED PROCEDURES.

Sanction Details: CSFB AGREED TO PAY DISGORGEMENT IN THE AMOUNT OF $70 MILLIONAND TO PAY A FINE IN THE AMOUNT OF $30 MILLION. THE AMOUNT OFDISGORGEMENT PAID BY CSFB TO THE NASDR WAS REDUCED BY $35MILLION AND THE AMOUNT OF THE FINE PAID BY CSFB WAS REDUCED BY$15 MILLION TO REFLECT PAYMENTS MADE BY CSFB TO THE U.S.TREASURY PURSUANT TO THE TERMS OF A FINAL JUDGMENT OFPERMANENT INJUNCTION ENTERED ON JANUARY 29, 2002. CSFB PAIDTHE FINE AND DISGORGEMENT ON JANUARY 30, 2002.

Firm Statement ON JANUARY 22, 2002, CSFB SUBMITTED AN AWC TO THE NASDR, WHICHWAS REVIEWED AND ACCEPTED BY THE NASDR ON JANUARY 22, 2002. INTHE AWC, SOLELY FOR THE PURPOSE OF THE PROCEEDING AND ANYOTHER ACTION IN WHICH THE NASD IS A PARTY AND WITHOUT ADMITTINGOR DENYING THE FINDINGS SET FORTH IN THE AWC, CSFB CONSENTEDTO FINDINGS THAT CSFB VIOLATED CERTAIN NASD CONDUCT RULES ASSET FORTH IN 7, ABOVE. IN ADDITION TO THE PAYMENT OF THE FINE ANDDISGORGEMENT, CSFB AGREED TO ENGAGE AN INDEPENDENTCONSULTANT TO REVIEW, BEGINNING ONE YEAR FROM THE DATE OF THEAWC, THE IMPLEMENTATION OF ITS REVISED POLICIES ANDPROCEDURES.



i


Allegations: NASD RULES 2110, IM 2110-2 4613 AND SEC RULE 11AC1-4 - FIRM FAILEDTO IMMEDIATELY DISPLAY CUSTOMER LIMIT ORDERS IN NASDAQSECURITIES IN ITS PUBLIC QUOTATION, WHEN EACH SUCH ORDER WAS ATA PRICE THAT WOULD IMPROVE THE FIRM'S BID OR OFFER IN EACHSECURITY, OR AT A PRICE EQUAL TO ITS PUBLIC QUOTE WHEN SUCHQUOTE WAS PRICED EQUAL TO THE FIRM?S BID OR OFFER AND THENATIONAL BEST BID OR OFFER FOR EACH SUCH SECURITY AND THE SIZEOF THE ORDER REPRESENTED MORE THAN A DE MINIMIS CHANGE INRELATION TO THE SIZE ASSOCIATED WITH ITS BID OR OFFER IN EACHSUCH SECURITY; FAILED TO CONTEMPORANEOUSLY OR PARTIALLYEXECUTE LIMIT ORDERS IN NASDAQ SECURITIES AFTER IT TRADED EACHSUBJECT SECURITY FOR ITS OWN MARKET MAKING ACCOUNT AT A PRICETHAT WOULD HAVE SATISFIED EACH CUSTOMER'S LIMIT ORDER; AND,WITHOUT MAKING REASONABLE EFFORTS TO AVOID A LOCKED ORCROSSED MARKET BY EXECUTING TRANSACTIONS WITH ALL MARKETMAKERS WHOSE QUOTATIONS WOULD BE LOCKED OR CROSSED,ENTERED BID OR ASK QUOTATIONS IN THE NASDAQ STOCK MARKET, INC.WHICH CAUSED A LOCKED OR CROSSED MARKET CONDITION TO OCCURIN EACH INSTANCE.







Initiated By: NATIONAL ASSOCIATION OF SECURITIES DEALERS







NASD RULES 2110, IM 2110-2 4613 AND SEC RULE 11AC1-4 - FIRM FAILEDTO IMMEDIATELY DISPLAY CUSTOMER LIMIT ORDERS IN NASDAQSECURITIES IN ITS PUBLIC QUOTATION, WHEN EACH SUCH ORDER WAS ATA PRICE THAT WOULD IMPROVE THE FIRM'S BID OR OFFER IN EACHSECURITY, OR AT A PRICE EQUAL TO ITS PUBLIC QUOTE WHEN SUCHQUOTE WAS PRICED EQUAL TO THE FIRM?S BID OR OFFER AND THENATIONAL BEST BID OR OFFER FOR EACH SUCH SECURITY AND THE SIZEOF THE ORDER REPRESENTED MORE THAN A DE MINIMIS CHANGE INRELATION TO THE SIZE ASSOCIATED WITH ITS BID OR OFFER IN EACHSUCH SECURITY; FAILED TO CONTEMPORANEOUSLY OR PARTIALLYEXECUTE LIMIT ORDERS IN NASDAQ SECURITIES AFTER IT TRADED EACHSUBJECT SECURITY FOR ITS OWN MARKET MAKING ACCOUNT AT A PRICETHAT WOULD HAVE SATISFIED EACH CUSTOMER'S LIMIT ORDER; AND,WITHOUT MAKING REASONABLE EFFORTS TO AVOID A LOCKED ORCROSSED MARKET BY EXECUTING TRANSACTIONS WITH ALL MARKETMAKERS WHOSE QUOTATIONS WOULD BE LOCKED OR CROSSED,ENTERED BID OR ASK QUOTATIONS IN THE NASDAQ STOCK MARKET, INC.WHICH CAUSED A LOCKED OR CROSSED MARKET CONDITION TO OCCURIN EACH INSTANCE.


Resolution:


Sanction Details: NONE






Allegations: ENTERED BID OR ASK QUOTATIONS THAT WOULD LOCK OR CROSS THEMARKET DURING THE 9:20-9:29:59 PRE-OPENING MARKET PERIODWITHOUT SENDING AN APPROPRIATE TRADE-OR-MOVE MESSAGE TO THEOTHER PARTY(S) TO THE LOCK/CROSS; FAILED TO APPROPRIATELYRESPOND TO TRADE-OR-MOVE MESSAGES RECEIVED DURING THEPREOPENING MARKET PERIOD: RECEIVED SELECTNET ORDERS IN ANAMOUNT GREATER THAN ITS PUBLISHED QUOTATION, EXECUTED SUCHORDERS IN AMOUNTS LESS THAN THE SIZE OF THE ORDER AND FAILEDTO MOVE ITS QUOTE TO AN INFERIOR PRICE.














Resolution:



Firm Statement CSFB ACCEPTS AND CONSENTS WITHOUT ADMITTING OR DENYING THEALLEGED VIOLATIONS TO THE ENTRY OF THE FOLLOWING FINDINGS BYTHE NASD: 9/9/99-9/10/99 AND 10/11/00-10/12/00 FIRM FAILED TOIMMEDIATELY DISPLAY 36 AND 5, RESPECTIVELY, ELIGIBLE CUSTOMERLIMIT ORDERS IN ITS PUBLISHED QUOTATION (VIOLATION OF SECRULE11AC1-4). 9/9/00-9/10/99 AND 10/11/00-10/12/00, FIRM FAILED TOCONTEMPORANEOUSLY OR PARTIALLY EXECUTE 22 AND 5,RESPECTIVELY, CUSTOMER LIMIT ORDERS AFTER IT HAD TRADEDSECURITIES FOR ITS OWN MARKET-MAKING ACCOUNT AT PRICES THATWOULD HAVE SATISFIED EACH CUSTOMER'S LIMIT ORDER (VIOLATION OFNASD CONDUCT RULE 2110 AND IM 2110-2). 1/1/00-3/31/00 FIRM ENTEREDQUOTATIONS THAT LOCKED/CROSSED THE MARKET IN 47 INSTANCESWITHOUT MAKING REASONABLE EFFORTS TO AVOID A LOCKED/CROSSEDMARKET (VIOLATION OF NASD MARKETPLACE RULE 4613(E)). 8/28/00-9/1/00FIRM LOCKED OR CROSSED THE MARKET IN 47 INSTANCES BETWEEN 9:20AND 9:29:59 WITHOUT SENDING A TRADE-OR-MOVE MESSAGE TO THEPARTY WHOSE QUOTE IT LOCKED/CROSSED AND/OR FAILED TO SEND ATRADE OR MOVE MESSAGE(S) WITH AN AGGREGATE SIZE OF AT LEAST5,000 SHARES TO ALL PARTIES WHOSE QUOTES IT LOCKED/CROSSED.(VIOLATION) OF NASD MARKETPLACE RULE 4613(E)(1)(C)). 8/28/00-9/1/00FIRM WAS A PARTY LOCKED/CROSSED MARKET IN 35 INSTANCESBETWEEN 9:20 AND 9:29:59 WHERE IT RECEIVED A TRADE-OR-MOVE-MESSAGE AND WITHIN 30 SECONDS OF RECEIVING SUCH MESSAGEFAILED TO FILL THE INCOMING MESSAGE FOR THE FULL SIZE OR MOVEITS QUOTATION BY AN INCREMENT THAT WOULD HAVEUNLOCKED/UNCROSSED THE MARKET. (VIOLATION OF NASDMARKETPLACE RULE 4613(E)(1)(C)). 10/1/99-3/31/00 FIRM RECEIVED ANORDER IN 138 INSTANCES FOR AN AMOUNT AT LEAST ONE NORMAL UNITOF TRADING GREATER THAN ITS PUBLISHED QUOTATION SIZE ANDEXECUTED A TRANSACTION FOR LESS THAN THE SIZE OF THE ORDERAND FAILED TO IMMEDIATELY MOVE TO AN INFERIOR QUOTATION.(VIOLATION OF NASD MARKETPLACE RULE 4613(B)(2)).








CSFB ACCEPTS AND CONSENTS WITHOUT ADMITTING OR DENYING THEALLEGED VIOLATIONS TO THE ENTRY OF THE FOLLOWING FINDINGS BYTHE NASD: 9/9/99-9/10/99 AND 10/11/00-10/12/00 FIRM FAILED TOIMMEDIATELY DISPLAY 36 AND 5, RESPECTIVELY, ELIGIBLE CUSTOMERLIMIT ORDERS IN ITS PUBLISHED QUOTATION (VIOLATION OF SECRULE11AC1-4). 9/9/00-9/10/99 AND 10/11/00-10/12/00, FIRM FAILED TOCONTEMPORANEOUSLY OR PARTIALLY EXECUTE 22 AND 5,RESPECTIVELY, CUSTOMER LIMIT ORDERS AFTER IT HAD TRADEDSECURITIES FOR ITS OWN MARKET-MAKING ACCOUNT AT PRICES THATWOULD HAVE SATISFIED EACH CUSTOMER'S LIMIT ORDER (VIOLATION OFNASD CONDUCT RULE 2110 AND IM 2110-2). 1/1/00-3/31/00 FIRM ENTEREDQUOTATIONS THAT LOCKED/CROSSED THE MARKET IN 47 INSTANCESWITHOUT MAKING REASONABLE EFFORTS TO AVOID A LOCKED/CROSSEDMARKET (VIOLATION OF NASD MARKETPLACE RULE 4613(E)). 8/28/00-9/1/00FIRM LOCKED OR CROSSED THE MARKET IN 47 INSTANCES BETWEEN 9:20AND 9:29:59 WITHOUT SENDING A TRADE-OR-MOVE MESSAGE TO THEPARTY WHOSE QUOTE IT LOCKED/CROSSED AND/OR FAILED TO SEND ATRADE OR MOVE MESSAGE(S) WITH AN AGGREGATE SIZE OF AT LEAST5,000 SHARES TO ALL PARTIES WHOSE QUOTES IT LOCKED/CROSSED.(VIOLATION) OF NASD MARKETPLACE RULE 4613(E)(1)(C)). 8/28/00-9/1/00FIRM WAS A PARTY LOCKED/CROSSED MARKET IN 35 INSTANCESBETWEEN 9:20 AND 9:29:59 WHERE IT RECEIVED A TRADE-OR-MOVE-MESSAGE AND WITHIN 30 SECONDS OF RECEIVING SUCH MESSAGEFAILED TO FILL THE INCOMING MESSAGE FOR THE FULL SIZE OR MOVEITS QUOTATION BY AN INCREMENT THAT WOULD HAVEUNLOCKED/UNCROSSED THE MARKET. (VIOLATION OF NASDMARKETPLACE RULE 4613(E)(1)(C)). 10/1/99-3/31/00 FIRM RECEIVED ANORDER IN 138 INSTANCES FOR AN AMOUNT AT LEAST ONE NORMAL UNITOF TRADING GREATER THAN ITS PUBLISHED QUOTATION SIZE ANDEXECUTED A TRANSACTION FOR LESS THAN THE SIZE OF THE ORDERAND FAILED TO IMMEDIATELY MOVE TO AN INFERIOR QUOTATION.(VIOLATION OF NASD MARKETPLACE RULE 4613(B)(2)).


i









Allegations: 06/08/01GS: NASD RULES 2110,3010, 6955(A), AND 6955(B)(1) - THE FIRMREPORTED TO ORDER AUDIT TRAIL SYSTEM (0ATS) EXECUTION REPORTSWITH RESPECT TO EQUITY SECURITIES TRADED ON THE NASDAQ STOCKMARKET THAT CONTAINED EITHER INACCURATE, INCOMPLETE, ORIMPROPERLY FORMATED DATA CAUSING THE OATS SYSTEM TO BEUNABLE TO LINK THE EXECUTION REPORTS TO THE RELATED TRADEREPORTS IN ACT; SUBMITTED TO OATS REPORTS THAT WERE NOT IN THEELECTRONIC FORM PRESCRIBED BY THE NASD; AND, THE FIRM'SSUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISIONREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH RESPECT TOTHE APPLICABLE SECURITIES LAWS AND REGULATIONS CONCERNINGOATS REPORTING.



Resolution:










Sanction Details: N/A

Regulator Statement .









Allegations: NASD RULES 2110,3010,6955(A), AND 6955(B)(1) - THE FIRM REPORTED TOORDER AUDIT TRAIL SYSTEM (OATES) EXECUTION REPORTS WITHRESPECT TO EQUITY SECURITIES TRADED ON THE NASDAQ STOCKMARKET THAT CONTAINED EITHER INACCURATE, INCOMPLETE, ORIMPROPERLY FORMATED DATA CAUSING THE OATS SYSTEM TO BEUNABLE TO LINK THE EXECUTION REPORTS TO THE FORMATED DATACAUSING THE OATS SYSTEM TO BE UNABLE TO LINK THE EXECUTIONREPORTS TO THE RELATED TRADE REPORTS IN ACT; SUBMITTED TO OATSREPORTS THAT WERE NOT IN THE ELECTRONIC FORM PRESCRIBED BYTHE NASD; AND, THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDEFOR SUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCEWITH RESPECT TO THE APPLICABLE SECURITIES LAWS ANDREGULATIONS CONCERNING OATS REPORTING.



Resolution:



Firm Statement NASD RULES 2110,3010,6955(A), AND 6955(B)(1) - THE FIRM REPORTED TOORDER AUDIT TRAIL SYSTEM (OATES) EXECUTION REPORTS WITHRESPECT TO EQUITY SECURITIES TRADED ON THE NASDAQ STOCKMARKET THAT CONTAINED EITHER INACCURATE, INCOMPLETE, ORIMPROPERLY FORMATED DATA CAUSING THE OATS SYSTEM TO BEUNABLE TO LINK THE EXECUTION REPORTS TO THE FORMATED DATACAUSING THE OATS SYSTEM TO BE UNABLE TO LINK THE EXECUTIONREPORTS TO THE RELATED TRADE REPORTS IN ACT; SUBMITTED TO OATSREPORTS THAT WERE NOT IN THE ELECTRONIC FORM PRESCRIBED BYTHE NASD; AND, THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDEFOR SUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCEWITH RESPECT TO THE APPLICABLE SECURITIES LAWS ANDREGULATIONS CONCERNING OATS REPORTING.








Firm Statement NASD RULES 2110,3010,6955(A), AND 6955(B)(1) - THE FIRM REPORTED TOORDER AUDIT TRAIL SYSTEM (OATES) EXECUTION REPORTS WITHRESPECT TO EQUITY SECURITIES TRADED ON THE NASDAQ STOCKMARKET THAT CONTAINED EITHER INACCURATE, INCOMPLETE, ORIMPROPERLY FORMATED DATA CAUSING THE OATS SYSTEM TO BEUNABLE TO LINK THE EXECUTION REPORTS TO THE FORMATED DATACAUSING THE OATS SYSTEM TO BE UNABLE TO LINK THE EXECUTIONREPORTS TO THE RELATED TRADE REPORTS IN ACT; SUBMITTED TO OATSREPORTS THAT WERE NOT IN THE ELECTRONIC FORM PRESCRIBED BYTHE NASD; AND, THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDEFOR SUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCEWITH RESPECT TO THE APPLICABLE SECURITIES LAWS ANDREGULATIONS CONCERNING OATS REPORTING.


i


Initiated By: DEPARTMENT OF TREASURY






Principal Product Type: Debt - Government


Allegations: FAILURE TO DELIVER US TREASURY SECURITIES IN A TIMELY MANNER INACCORDANCE WITH 31 CFR PART 375, SUBSECTION 375.31(B).



Resolution:

Other Sanctions Ordered: N/A


Firm Statement ON APRIL 2, 2001 CREDIT SUISSE FIRST BOSTON CORPORATION ("CSFBC")FAILED ON ITS OBLIGATIONS UNDER THE U.S. TREASURY BUYBACKPROGRAM TO DELIVER $25MM PAR VALUE OF U.S. TREASURYSECURITIES. THIS FAILURE TO DELIVER THE $25M IN U.S.TREASURYSECURITIES WAS DUE TO MARKET CONDITIONS (IN THAT THE RELEVANTSECURITIES WERE IN SHORT SUPPLY) AS WELL AS CERTAIN INADVERTANTERRORS IN CSFBC'S INTERNAL PROCESSING OF THIS TRANSACTION.THESE SECURITIES WERE DELIVERED ON APRIL 3, 2001. RESULTANTLY,UNDER 31 CFR PART 375, SUBSECTION 375.31(B), THE U.S. TREASURYISSUED A FINE TO CSFBC IN THE AMOUNT OF $44,000. CSFBC PAID THEFINE ON APRIL 4, 2001.


Settled






ON APRIL 2, 2001 CREDIT SUISSE FIRST BOSTON CORPORATION ("CSFBC")FAILED ON ITS OBLIGATIONS UNDER THE U.S. TREASURY BUYBACKPROGRAM TO DELIVER $25MM PAR VALUE OF U.S. TREASURYSECURITIES. THIS FAILURE TO DELIVER THE $25M IN U.S.TREASURYSECURITIES WAS DUE TO MARKET CONDITIONS (IN THAT THE RELEVANTSECURITIES WERE IN SHORT SUPPLY) AS WELL AS CERTAIN INADVERTANTERRORS IN CSFBC'S INTERNAL PROCESSING OF THIS TRANSACTION.THESE SECURITIES WERE DELIVERED ON APRIL 3, 2001. RESULTANTLY,UNDER 31 CFR PART 375, SUBSECTION 375.31(B), THE U.S. TREASURYISSUED A FINE TO CSFBC IN THE AMOUNT OF $44,000. CSFBC PAID THEFINE ON APRIL 4, 2001.


i


Initiated By: CHICAGO BOARD OF TRADE BUSINESS CONDUCT COMMITTEE


Other


FINE


Docket/Case Number: 2000-RRI-33



Allegations: ALLEGED THAT THE FIRM VIOLATED REGULATION 545.01, IN THAT THEFIRM FAILED TO FURNISH OPEN INTEREST AND LARGE TRADERINFORMATION TO THE EXCHANGE; AND REGULATION 545.02, IN THAT THEFIRM FAILED TO KEEP AND MAINTAIN REQUIRED RECORDS IN ANACCURATE AND COMPLETE MANNER.



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING ANY VIOLATIONS OF REGULATIONS545.01 AND 545.02, AS CITED IN THE PRELIMINARY CHARGES, CREDITSUISSE FIRST BOSTON CORPORATION AGREED TO PAY A FINE OF$15,000.00 IN THE SETTLEMENT OF THIS MATTER.

Firm Statement ON DECEMBER 5, 2000, THE BUSINESS CONDUCT COMMITTEE("COMMITTEE") ISSUED PRELIMINARY CHARGES AGAINST CREDIT SUISSEFIRST BOSTON CORPORATION ("CSFB")BASED ON ITS APPARENTVIOLATIONS OF REGULATIONS OF THE CHICAGO BOARD OF TRADE("CBOT"). THE PRELIMINARY CHARGES ALLEGED THAT CSFB: (1) FAILED TOFURNISH OPEN INTEREST AND LARGE TRADER INFORMATION TO THEEXCHANGE, IN VIOLATION OF REGULATION 545.01 AND (2) FAILED TO KEEPAND MAINTAIN REQUIRED RECORDS IN AN ACCURATE AND COMPLETEMANNER, IN VIOLATION OF REGULATION 545.02.IN ACCORDANCE WITH CBOT REGULATION 540.09, CSFB SUBMITTED AWRITTEN OFFER OF SETTLEMENT DATED MARCH 5, 2001. THESETTLEMENT OFFER WAS PRESENTED TO AND ACCEPTED BY THECOMMITTEE ON MARCH 5, 2001.


Decision






Firm Statement ON DECEMBER 5, 2000, THE BUSINESS CONDUCT COMMITTEE("COMMITTEE") ISSUED PRELIMINARY CHARGES AGAINST CREDIT SUISSEFIRST BOSTON CORPORATION ("CSFB")BASED ON ITS APPARENTVIOLATIONS OF REGULATIONS OF THE CHICAGO BOARD OF TRADE("CBOT"). THE PRELIMINARY CHARGES ALLEGED THAT CSFB: (1) FAILED TOFURNISH OPEN INTEREST AND LARGE TRADER INFORMATION TO THEEXCHANGE, IN VIOLATION OF REGULATION 545.01 AND (2) FAILED TO KEEPAND MAINTAIN REQUIRED RECORDS IN AN ACCURATE AND COMPLETEMANNER, IN VIOLATION OF REGULATION 545.02.IN ACCORDANCE WITH CBOT REGULATION 540.09, CSFB SUBMITTED AWRITTEN OFFER OF SETTLEMENT DATED MARCH 5, 2001. THESETTLEMENT OFFER WAS PRESENTED TO AND ACCEPTED BY THECOMMITTEE ON MARCH 5, 2001.


i


Initiated By: BUSINESS CONDUCT COMMITTEE OF THE CHICAGO BOARD OF TRADE


Other


MONETARY FINE





Allegations: IT WAS ALLEGED THAT THE FIRM VIOLATED:

REGULATION 332.02 IN THAT THE FIRM FAILED TO SUBMIT ONLY THEBRACKET INFORMATION SUBMITTED TO IT BY THE MEMBERS EXECUTINGTHE TRADES ON THE RECORD OF TRANSACTIONS SUBMITTED TO THECLEARING HOUSE.

REGULATION 332.08 IN THAT THE FIRM FAILED TO MAKE ALL TRADE DATASUBMISSIONS IN A CORRECT MANNER.



Resolution:



Settled







Sanction Details: CREDIT SUISSE FIRST BOSTON CORPORATION AGREED TO PAY A FINE OF$1000.00

Firm Statement WITHOUT ADMITTING OR DENYING ANY VIOLATION, CREDIT SUISSE FIRSTBOSTON CORPORATION CONSENTED TO THE ENTRY OF A CONCLUSIONTHAT THE BUSINESS CONDUCT COMMITTEE HAD REASON TO BELIEVETHAT THE FIRM VIOLATED REGULATIONS 332.02 AND 332.08


i









Allegations: SEC RULE 11AC1-4 - SEC RULE 11AC1-4 - RESPONDENT MEMBER FAILEDTO DISPLAY IMMEDIATELY CUSTOMER LIMIT ORDERS IN NASDAQSECURITIES IN ITS PUBLIC QUOTATION, WHEN EACH SUCH ORDER WAS ATA PRICE THAT WOULD HAVE IMPROVED ITS BID OR OFFER IN EACH SUCHSECURITY; OR WHEN THE FULL SIZE OF EACH SUCH ORDER WAS PRICEDEQUAL TO HIS BID OR OFFER AND THE NATIONAL BEST BID OR OFFERFOR EACH SUCH SECURITY, AND REPRESENTED MORE THAN A DEMINIMIS CHARGE IN RELATION TO THE SIZE ASSOCIATED WITH ITS BID OROFFER IN EACH SUCH SECURITY.



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, CREDIT SUISSEFIRST BOSTON LLC CONSENTED TO THE DESCRIBED SANCTIONS AND TOTHE ENTRY OF FINDINGS, THEREFORE, THE FIRM IS CENSURED ANDFINED $5,000.










Initiated By: NASD REGULATION INC.


Censure



Docket/Case Number: AWC CMS000076 ETR 10-9800036



Allegations: VIOLATION OF SEC RULE 11AC1-4



Resolution:


Sanction Details: CENSURE AND FINE OF $5000.00

Firm Statement CREDIT SUISSE FIRST BOSTON CORPORATION (FBCO) WITHOUTADMITTING OR DENYING THE ALLEGED VIOLATION, TO THE ENTRY OF THEFOLLOWING FINDINGS BY NASD REGULATION, INC:ON 14 OCCASIONS ON NOVEMBER 24 AND 25, 1998, FBCO FAILED TODISPLAY IMMEDIATELY 13 CUSTOMER LIMIT ORDERS IN NASDAQSECURITIES IN ITS PUBLIC QUOTATION, WHEN EACH SUCH ORDER WAS ATA PRICE THAT WOULD HAVE IMPROVED FBCO'S BID OR OFFER IN EACHSUCH SECURITY; OR WHEN EACH SUCH ORDER WAS PRICED EQUAL TOFBCO'S BID OR OFFER AND THE NATIONAL BEST BID OR OFFER FOR EACHSUCH SECURITY, AND THE SIZE OF THE ORDER REPRESENTED MORETHAN A DE MINIMIS CHANGE IN RELATION TO THE SIZE ASSOCIATED WITHFBCO'S BID OR OFFER IN EACH SUCH SECURITY.




i















Allegations: 04-10-00, SEC RULES 17(A)(2),(3), NASD RULE 2110 - RESPONDENTMEMBER EFFECTED DEFEASANCE ESCROW TRANSACTIONS WITHMUNICIPALITIES AT PRICES NOT REASONABLY RELATED TO THE CURRENTWHOLESALE MARKET PRICES FOR THE SECURITIES UNDER THEPARTICULAR FACTS AND CIRCUMSTANCES, INCLUDING THE PERTINENTTAX REGULATIONS. THE FIRM KNEW, OR SHOULD HAVE KNOWN, THAT THEPRICES IT CHARGED WERE NOT REASONABLY RELATED TO THEPREVAILING WHOLESALE MARKET PRICES OF THE SECURITIES. THEEXCESSIVE MARKUPS ALSO JEOPARDIZED THE TAX-EXEMPT STATUS OFTHOSE MUNICIPALITIES REFUNDING BONDS AND DIVERTED MONEY FROMTHE U.S. TREASURY TO THE FIRM WHEN THE TRANSACTION WAS INPOSITIVE ARBITRAGE OR REDUCED THE SAVINGS AVAILABLE TO THEMUNICIPALITIES FROM THE REFUNDINGS WHEN THE TRANSACTION WASIN NEGATIVE ARBITRAGE.



Resolution:

Other Sanctions Ordered: WITHIN 10 BUSINESS DAYS, MAKE PAYMENTS TOTALING $440,006.08RELATED TO SALES OF DEFEASANCE ESCROW SECURITIES TO CERTAINMUNICIPAL ISSUERS IN CONNECTION WITH ADVANCE REFUNDINGS INNEGATIVE ARBITRAGE. PAY $854,479.84 TO THE U.S. TREASURY UNDER ANAGREEMENT SIMULTANEOUSLY ENTERED INTO AMONG THE FIRM, THEIRS, AND THE U.S. ATTORNEY FOR THE SOUTHERN DISTRICT OF NEWYORK. AT THE TIME PAYMENTS ARE MADE TO THE MUNICIPALITIES ANDTHE U.S. TREASURY, COPIES OF THE PAYMENTS AND ANY COVERLETTERS SHALL BE SENT TO DISTRICT NO. 5.

Sanctions Ordered: Censure







WITHIN 10 BUSINESS DAYS, MAKE PAYMENTS TOTALING $440,006.08RELATED TO SALES OF DEFEASANCE ESCROW SECURITIES TO CERTAINMUNICIPAL ISSUERS IN CONNECTION WITH ADVANCE REFUNDINGS INNEGATIVE ARBITRAGE. PAY $854,479.84 TO THE U.S. TREASURY UNDER ANAGREEMENT SIMULTANEOUSLY ENTERED INTO AMONG THE FIRM, THEIRS, AND THE U.S. ATTORNEY FOR THE SOUTHERN DISTRICT OF NEWYORK. AT THE TIME PAYMENTS ARE MADE TO THE MUNICIPALITIES ANDTHE U.S. TREASURY, COPIES OF THE PAYMENTS AND ANY COVERLETTERS SHALL BE SENT TO DISTRICT NO. 5.

Sanction Details: 11-01-00, $57,500 PAID 4/17/00




Other


RELIEF SOUGHT





Allegations: VIOLATION OF SEC RULES 17(A)(2), 17(A)(3), NASD CONDUCT RULE 2110



Resolution:

Other Sanctions Ordered: CSFBC SHALL COMPLY WITH ITS UNDERTAKING TO MAKE CERTAINPAYMENTS TOTALING $440,006.08 RELATED TO SALES OF DEFEASANCEESCROW SECURITIES TO CERTAIN MUNICIPAL ISSUERS IN CONNECTIONWITH ADVANCE REFUNDINGS IN NEGATIVE ARBITRAGE, AS SET FORTH INAN UNDERTAKING SUBMITTED BY CSFBC AND AGREED TO BY NASDREGULATION, INC.CSFBC WILL COMPLY WITH ITS UNDERTAKIING TO PAY $854,479.84 TO THEUNITED STATES TREASURY UNDER AN AGREEMENT SIMULTANEOUSLYENTERED INTO AMONG CSFBC, THE INTERNAL REVENUE SERVICE ANDTHE U.S. ATTORNEY FOR THE SOUTHERN DISTRICT OF NYCOPIES OF PAYMENTS AND CORRESPONDENCE ARE TO BE SENT TODISTRICT 5.

Sanction Details: CSFBC SHALL COMPLY WITH ITS UNDERTAKING TO MAKE CERTAINPAYMENTS TOTALING $440,006.08 RELATED TO SALES OF DEFEASANCEESCROW SECURITIES TO CERTAIN MUNICIPAL ISSUERS IN CONNECTIONWITH ADVANCE REFUNDINGS IN NEGATIVE ARBITRAGE, AS SET FORTH INAN UNDERTAKING SUBMITTED BY CSFBC AND AGREED TO BY NASDREGULATION, INC.CSFBC WILL COMPLY WITH ITS UNDERTAKIING TO PAY $854,479.84 TO THEUNITED STATES TREASURY UNDER AN AGREEMENT SIMULTANEOUSLYENTERED INTO AMONG CSFBC, THE INTERNAL REVENUE SERVICE ANDTHE U.S. ATTORNEY FOR THE SOUTHERN DISTRICT OF NYCOPIES OF PAYMENTS AND CORRESPONDENCE ARE TO BE SENT TODISTRICT 5.

Sanctions Ordered: Censure






www.finra.org/brokercheck User GuidanceCSFBC SHALL COMPLY WITH ITS UNDERTAKING TO MAKE CERTAINPAYMENTS TOTALING $440,006.08 RELATED TO SALES OF DEFEASANCEESCROW SECURITIES TO CERTAIN MUNICIPAL ISSUERS IN CONNECTIONWITH ADVANCE REFUNDINGS IN NEGATIVE ARBITRAGE, AS SET FORTH INAN UNDERTAKING SUBMITTED BY CSFBC AND AGREED TO BY NASDREGULATION, INC.CSFBC WILL COMPLY WITH ITS UNDERTAKIING TO PAY $854,479.84 TO THEUNITED STATES TREASURY UNDER AN AGREEMENT SIMULTANEOUSLYENTERED INTO AMONG CSFBC, THE INTERNAL REVENUE SERVICE ANDTHE U.S. ATTORNEY FOR THE SOUTHERN DISTRICT OF NYCOPIES OF PAYMENTS AND CORRESPONDENCE ARE TO BE SENT TODISTRICT 5.


i









Allegations: NASD RULES 2110, 3010, 3360, 3370, 6130 - RESPONDENT MEMBEREXECUTED SHORT SALE TRANSACTIONS IN SECURITIES AND FAILED TOMAKE AN AFFIRMATIVE DETERMINATION FOR EACH OF THESETRANSACTIONS; EXECUTED SHORT SALE TRANSACTIONS AND FAILED TOREPORT EACH OF THESE TRANSACTIONS TO ACT WITH A SHORT SALEINDICATOR; SUBMITTED AN INACCURATE SHORT INTEREST POSITIONREPORT TO THE NASD; AND, FAILED TO ESTABLISH, MAINTAIN ANDENFORCE ADEQUATE WRITTEN SUPERVISORY PROCEDURESREASONABLY DESIGNED TO ACHIEVE COMPLIANCE FOR THE SHORT SALERULES.



Resolution:
















Docket/Case Number: CMS990030AWC



Allegations: ALLEGED VIOLATIONS OF NASD CONDUCT RULE 2110, 3010, 3360, 3370,AND NASD MARKETPLACE RULE 6130



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS. THE FIRM WASFINED $40,000.00 AND CENSURED

Firm Statement DURING THE PERIOD OF 4/1/97 TO 6/17/97, THE FIRM EXECUTED 312SHORT SALE TRANSACTIONS IN THE SECURITIES KNOWN AS VIASOFT,INC., AND DATA DIMENSIONS, INC., AND FAILED TO MAKE AN AFFIRMATIVEDETERMINATION FOR EACH OF THESE TRANSACTIONS (VIOLATION OFNASD CONDUCT RULE 3370)FROM 4/1/97 TO 6/25/97, THE FIRM EXECUTED 232 SHORT SALETRANSACTIONS AND FAILED TO REPORT EACH OF THESE TRANSACTIONSTO THE AUTOMATED CONFIRMATION TRANSACTION SERVICE (ACT) WITHSHORT SALE INDICATOR. (VIOLATION OF NASD MARKETPLACE RULE 6130)IN JULY 1998, THE FIRM SUBMITTED TO NASD REGULATION INC. ITS SHORTINTEREST POSITION REPORT. THIS REPORT INCLUDED A SHORT INTERESTPOSITION 16,180,683 SHARES IN ADC TELECOMUNICATIONS, INC. (ADCT),WHEN THE ACTUAL SHORT POSITON IN ADCT WAS 32, 183 SHARES(VIOLATION OF NASD CONDUCT RULE 3360).DURING THE PERIOS APRIL THROUGH JUNE 1997, THE FIRM FAILED TOESTABLISH, MAINTAIN AND ENFORCE ADEQUATE WRITTEN SUPERVISORYPROCEDURES REASONABLY DESIGNED TO ACHIEVE COMPLIANCE FORSHORT SALE RULES ( VIOLATION OF NASD CONDUCT RULES 2110 AND3010).








DURING THE PERIOD OF 4/1/97 TO 6/17/97, THE FIRM EXECUTED 312SHORT SALE TRANSACTIONS IN THE SECURITIES KNOWN AS VIASOFT,INC., AND DATA DIMENSIONS, INC., AND FAILED TO MAKE AN AFFIRMATIVEDETERMINATION FOR EACH OF THESE TRANSACTIONS (VIOLATION OFNASD CONDUCT RULE 3370)FROM 4/1/97 TO 6/25/97, THE FIRM EXECUTED 232 SHORT SALETRANSACTIONS AND FAILED TO REPORT EACH OF THESE TRANSACTIONSTO THE AUTOMATED CONFIRMATION TRANSACTION SERVICE (ACT) WITHSHORT SALE INDICATOR. (VIOLATION OF NASD MARKETPLACE RULE 6130)IN JULY 1998, THE FIRM SUBMITTED TO NASD REGULATION INC. ITS SHORTINTEREST POSITION REPORT. THIS REPORT INCLUDED A SHORT INTERESTPOSITION 16,180,683 SHARES IN ADC TELECOMUNICATIONS, INC. (ADCT),WHEN THE ACTUAL SHORT POSITON IN ADCT WAS 32, 183 SHARES(VIOLATION OF NASD CONDUCT RULE 3360).DURING THE PERIOS APRIL THROUGH JUNE 1997, THE FIRM FAILED TOESTABLISH, MAINTAIN AND ENFORCE ADEQUATE WRITTEN SUPERVISORYPROCEDURES REASONABLY DESIGNED TO ACHIEVE COMPLIANCE FORSHORT SALE RULES ( VIOLATION OF NASD CONDUCT RULES 2110 AND3010).


i




Other


ADMINISTRATIVE


Docket/Case Number: MRD199700101



Allegations: VIOLATION OF NASD CONDUCT RULE 2110, 3010, 3360, 3770 ANDVIOLATION OF NASD MARKETPLACE RULE 6130



Resolution:


Sanction Details: A CENSURE AND A $40,000.00 FINE

Firm Statement CSFB ACCEPTS AND CONSENTS, WITHOUT ADMITTING OR DENYING THEALLEGED VIOLATIONS TO THE ENTRY OF THE FOLLOWING FINDINGS BYNASD: 4/1/97 TO 6/17/97 FIRM EXECUTED 312 SHORT SALE TRANSACTIONSIN SECURITIES OF VIASOFT, INC. & DATA DIMENSIONS, INC. AND FAILED TOMAKE AFFIRMATIVE DETERMINATION FOR EACH OF THESETRANSACTIONS (VIOLATION OF NASD CONDUCT RULE 3370). 4/1/97 TO6/25/97 FIRM EXECUTED 232 SHORT SALE TRANSACTIONS & FAILED TOREPORT EACH TRANSACTION TO THE ACT SERVICE (VIOLATIONMARKETPLACE RULE 6130). 7/98 FIRM SUBMITTED SHORT INTERESTPOSITION OF 16,180,683 SHARES OF ADCT ELECOMMUNICATIONS, INC.WHEN ACTUAL SHORT POSITION WAS 32,183 (VIOLATION OF NASDCONDUCT 3360) 4/1/97 TO 6/1/97 THE FIRM FAILED TO ESTABLISH,MAINTAIN AND ENFORCE ADEQUATE WRITTEN SUPERVISORYPROCEDURES REASONABLY DESIGNED TO ACHIEVE COMPLIANCE FORTHE SHORT SALE RULES (VIOLATION OF NASD CONDUCT RULES 2110 AND3010).


Consent






CSFB ACCEPTS AND CONSENTS, WITHOUT ADMITTING OR DENYING THEALLEGED VIOLATIONS TO THE ENTRY OF THE FOLLOWING FINDINGS BYNASD: 4/1/97 TO 6/17/97 FIRM EXECUTED 312 SHORT SALE TRANSACTIONSIN SECURITIES OF VIASOFT, INC. & DATA DIMENSIONS, INC. AND FAILED TOMAKE AFFIRMATIVE DETERMINATION FOR EACH OF THESETRANSACTIONS (VIOLATION OF NASD CONDUCT RULE 3370). 4/1/97 TO6/25/97 FIRM EXECUTED 232 SHORT SALE TRANSACTIONS & FAILED TOREPORT EACH TRANSACTION TO THE ACT SERVICE (VIOLATIONMARKETPLACE RULE 6130). 7/98 FIRM SUBMITTED SHORT INTERESTPOSITION OF 16,180,683 SHARES OF ADCT ELECOMMUNICATIONS, INC.WHEN ACTUAL SHORT POSITION WAS 32,183 (VIOLATION OF NASDCONDUCT 3360) 4/1/97 TO 6/1/97 THE FIRM FAILED TO ESTABLISH,MAINTAIN AND ENFORCE ADEQUATE WRITTEN SUPERVISORYPROCEDURES REASONABLY DESIGNED TO ACHIEVE COMPLIANCE FORTHE SHORT SALE RULES (VIOLATION OF NASD CONDUCT RULES 2110 AND3010).


i




Other





Other Product Type(s): COMMODITIES

Allegations: THE BUSINESS CONDUCT COMMITTEE OF THE CHICAGO BOARD OFTRADE (CBOT) ALLEGED THAT CREDIT SUISSE FIRST BOSTONCORPORATION (CSFBC) VIOLAQTED CBOT REGULATION 332.06 IN THATTHE FIRM FAILED TO MAKE ALL TRADE DATA SUBMISSIONS IN A CORRECTMANNER.



Resolution:


Sanction Details: CSFBC PAID A FINE OF $1,000.00


Other


i







Initiated By: CHICAGO BOARD OF TRADE (CBOT)


Other



Docket/Case Number: DECISION NO. 94-MSR-01



Allegations: THE CBOT BUSINESS CONDUCT COMMITTEE ALLEGED THAT THEREGISTRANT FAILED TO PROVIDE THE CBOT WITH CERTAIN TRADEDOCUMENTATION IN A TIMELY MANNER, IN VIOLATION OF CBOTREGULATION 545.01.



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE REGISTRANTCONSENTED TO THE IMPOSITION OF A PENALTY CONSISTING OF A FINEOF $3500.00.


Decision


i


Initiated By: THE CHICAGO BOARD OPTIONS EXCHANGE, INCORPORATED




Allegations: THE CBOE BUSINESS CONDUCT COMMITTEE ALLEGED THAT REGISTRANTFAILED TO PROPERLY RECORD THE ENTRY AND EXECUTION TIMES FOR ACUSTOMER'S ORDERS RECEIVED ON FEBRUARY 2, 1988 IN VIOLATION OFCBOE RULE 15.1.








Other





Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE CHARGES, THE REGISTRANTCONSENTED TO THE IMPOSITION OF A $3000.00 FINE.


Other


i


Initiated By: THE BUSINESS CONDUCT COMMITTEE OF THE CHICAGO BOARD OFTRADE


Other



Docket/Case Number: 98 RFT-108



Allegations: VIOLATION OF REGULATION 332.02 IN THAT THE FIRM FAILED TO SUBMITONLY THE BRACKET INFORMATION SUBMITTED TO IT BY THE MEMBERSEXECUTING THE TRADES ON THE RECORD OF TRANSACTIONSSUBMITTED TO THE CLEARING HOUSE. VIOLATION OF REGULATION 332.08,IN THAT THE FIRM FAILED TO MAKE ALL TRADE DATA SUBMISSIONS IN ACORRECT MANNER.



Resolution:


Settled







Sanction Details: WITHOUT ADMITTING OR DENYING ANY VIOLATION OF REGULATIONS332.02 AND 332.08 CSFBS AGREED TO PAY A FINE OF $2500.00 INSETTLEMENT OF THIS MATTER.



i


Initiated By: THE BUSINESS CONDUCT COMMITTEE OF THE CBOE


Other



Docket/Case Number: CHECKING RECORDS AND WILL PROVIDE

Principal Product Type: Index Option(s)


Allegations: ALLEGED THAT FBC HAD, DURING 1991, ACCEPTED ORDERS FROM ACUSTOMER FOR THE ACQUISITION OF CBOE STOCK INDEX OPTIONS THATPLACED THE CUSTOMER'S AGGREGATE POSITION IN SUCH OPTIONS INEXCESS OF THE CBOE'S POSITION LIMIT.



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE CHARGES, FBC CONSENTED TOTHE IMPOSITION OF A$17,500.00 FINE.


Other


i


Allegations: ON JULY 16, 1996 CS FIRST BOSTON ENTERED INTO A STIPULATION ANDORDER RESOLVING A CIVIL COMPLAINT FILED BY THE UNITED STATESDEPARTMENT OF JUSTICE, ALLEGING THAT CS FIRST BOSTON AND 23OTHER NASDAQ MARKET MAKERS VIOLATED SECTION 1 OF THESHERMAN ACT IN CONNECTION WITH CERTAIN MARKET MAKERPRACTICES.







Initiated By: THE ANTITRUST DIVISION OF THE US DEPARTMENT OF JUSTICE





Docket/Case Number: NONE



Allegations: ON JULY 16, 1996 CS FIRST BOSTON ENTERED INTO A STIPULATION ANDORDER RESOLVING A CIVIL COMPLAINT FILED BY THE UNITED STATESDEPARTMENT OF JUSTICE, ALLEGING THAT CS FIRST BOSTON AND 23OTHER NASDAQ MARKET MAKERS VIOLATED SECTION 1 OF THESHERMAN ACT IN CONNECTION WITH CERTAIN MARKET MAKERPRACTICES.


Resolution:


Sanction Details: IN ENTERING INTO THE STIPULATION AND ORDER, THE PARTIES AGREED,WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THAT THEDEFENDANTS WOULD NOT ENGAGE IN CERTAIN TYPES OF MARKETMAKING ACTIVITIES AND THE DEFENDANTS UNDERTOOK STEPS TOASSURE COMPLIANCE WITH THEIR AGREEMENT.

Firm Statement ON AUGUST 6, 1998, THE UNITED STATES COURT OF APPEALS FOR THESECOND CIRCUIT UPHELD ON APPEAL THE UNITED STATES DISTRICTCOURT FOR THE SOUTHERN DISTRICT OF NEW YORK'S APPROVAL OF THESTIPULATION AND ORDER SETTLING THIS MATTER.

Sanctions Ordered:



i


Initiated By: NEW YORK STOCK EXCHANGE INC.


Allegations: ALLEGED VIOLATION OF NYSE RULE 476A "MARKET ON CLOSE POLICY"








Other


MINOR RULE VIOLATION




Other Product Type(s): STOCK


Resolution:


Sanction Details: CSFBC AGREED TO PAY A FINE OF $1000.00

Firm Statement MOC ORDERS CANCELLED BY CSFBC ON 6/10/99 AND 6/24/99 -CIRCUMSTANCE OF CANCELLATION ARE AS FOLLOWS: THECANCELLATIONS WERE NOT SPECIFICALLY RECALLED, HOWEVER, THEYMAY HAVE BEEN CANCELLED INADVERTANTLY DUE TO A PC FREEZINGAND THEN BEING REBOOTED. THE REP. WAS UNAWARE THAT REBOOTINGTHE SYSTEM THAT ALL OPEN ORDERS ON THE PC WOULD BE CANCELLED.6/24/99 - ORDERS WERE ENTERED INTO OUR TICKETLESS "ORDERMANAGEMENT SYSTEM" FOR AMR AND BMY STOCKS. SEVERAL OTHERSCREENS WERE OPENED ON THE TERMINAL AND THE SYSTEMCONDENSED THE ORDERMANAGEMENT SCREEN THAT REFLECTED THEORDERS UNTIL THEY WERE UNRECOGNIZABLE. WHEN THE INFORMATIONWAS REVIEWED THE INFORMATION APPEARED TO BE INCORRECT ANDTHE ORDERS WERE CANCELLED. THESE SIX CANCELLATIONS WERE FOROTHER REASONS THAN TO CORRECT A LEGITIMATE ORDER ENTRYERROR (AS TO SIDE, SYMBOL, SIZE, PRICE AND/OR DUPLICATION.


Consent


i



Allegations: RESPONDENT MEMBER FAILED TO EXECUTE ORDERS AND THEREBYFAILED TO HONOR ITS PUBLISHED QUOTATION. (SEC AND NASD FIRMQUOTE RULES)








Censure


$25,000.00 FINE






Resolution:


Sanction Details: $25,000.00 FINE; CENSURE

Regulator Statement 02-04-00, $25,000 PAID ON 9/15/99, INVOICE #99-MS-737




Initiated By: NASD REGULATION


Censure






Allegations: ALLEGED THAT CSFBC FAILED TO EXECUTE ORDERS AND THEREBYFAILED TO HONOR ITS PUBLISHED QUATATION. (SEC AND NASD FIRMQUOTE RULES)











Sanction Details: CSFBC PAID A $25,000.00 FINE AND WAS CENSURED.



i


Initiated By: CBOE





Principal Product Type:





Resolution:


Sanction Details: CREDIT SUISSE FIRST BOSTON CORPORATION ("CSFBC"),AN EXCHANGE MEMBER ORGANIZATION, WAS FINED $20,000.

Regulator Statement DURING ALL RELEVANT PERIODS HEREIN, CREDITSUISSE FINANCIAL PRODUCTS ("CSFP") WAS AN AFFILIATE OF CSFBCAND WAS NOT A MEMBER OF THE EXCHANGE. DURING ALL RELEVANTPERIODS HEREIN, THE OPTION TRADING ACCOUNTS OF CSFBC AND CSFPWERE AGGREGATED FOR POSITION LIMIT AND EXERCISE LIMITPURPOSES. FROM ON OR ABOUT OCTOBER 1, 1997 THROUGH ON OR ABOUTOCTOBER29, 1997, CSFBC CONTROLLED IN COMBINATION WITH CSFP ANAGGREGATE LONG CALL, SHORT PUT POSITION IN EXCESS OF THE100,000 CONTRACT LIMIT IN THE STANDARD & POOR'S 500 STOCK INDEX(SPX) CLASS OF OPTION CONTRACTS. IN ACCEPTING THE LETTER OFCONSENT, THE BCC CONSIDERED CERTAIN MITIGATING FACTORS,INCLUDING (1) CSFBC AND CSFP HAVE INSTITUTED AN AUTOMATEDMONITORING SURVEILLANCE SYSTEM TO REPLACE THE PRIOR MANUALAGGREGATION OF SPX POSITIONS; CSFBC HAS HIRED A MANAGER ANDANADDITIONAL COMPLIANCE OFFICER TO SUPPLEMENT ITS SUREVEILLANCEOF THE SPX (AND OTHER) POSITIONS; AND CSFBC HAS COMPUTERPROGRAMMING EXPERTISE DEDICATED TO THE MAINTENANCE OF THEAUTOMATED SURVEILLANCE SYSTEM IT DEVELOPED. (CBOE RULES 4.11AND 24.4(a).)


Consent






DURING ALL RELEVANT PERIODS HEREIN, CREDITSUISSE FINANCIAL PRODUCTS ("CSFP") WAS AN AFFILIATE OF CSFBCAND WAS NOT A MEMBER OF THE EXCHANGE. DURING ALL RELEVANTPERIODS HEREIN, THE OPTION TRADING ACCOUNTS OF CSFBC AND CSFPWERE AGGREGATED FOR POSITION LIMIT AND EXERCISE LIMITPURPOSES. FROM ON OR ABOUT OCTOBER 1, 1997 THROUGH ON OR ABOUTOCTOBER29, 1997, CSFBC CONTROLLED IN COMBINATION WITH CSFP ANAGGREGATE LONG CALL, SHORT PUT POSITION IN EXCESS OF THE100,000 CONTRACT LIMIT IN THE STANDARD & POOR'S 500 STOCK INDEX(SPX) CLASS OF OPTION CONTRACTS. IN ACCEPTING THE LETTER OFCONSENT, THE BCC CONSIDERED CERTAIN MITIGATING FACTORS,INCLUDING (1) CSFBC AND CSFP HAVE INSTITUTED AN AUTOMATEDMONITORING SURVEILLANCE SYSTEM TO REPLACE THE PRIOR MANUALAGGREGATION OF SPX POSITIONS; CSFBC HAS HIRED A MANAGER ANDANADDITIONAL COMPLIANCE OFFICER TO SUPPLEMENT ITS SUREVEILLANCEOF THE SPX (AND OTHER) POSITIONS; AND CSFBC HAS COMPUTERPROGRAMMING EXPERTISE DEDICATED TO THE MAINTENANCE OF THEAUTOMATED SURVEILLANCE SYSTEM IT DEVELOPED. (CBOE RULES 4.11AND 24.4(a).)


Initiated By: BUSINESS CONDUCT COMMITTEE OF THE CHICAGO BOARD OPTIONSEXCHANGE


Other






Allegations: VIOLATIONS OF EXCHANGE RULES 4.11 AND 24.4(A) EXCEEDING OPTIONPOSITIION LIMITS.



Resolution:


Sanction Details: A $20,000.00 FINE PAID 3/5/99

Firm Statement FROM ON OR ABOUT OCTOBER 1, 1997 THROUGH ON OR ABOUT OCTOBER29, 1997, CREDIT SUISSE FIRST BOSTON CORPORATION (CSFBC)CONTROLLED IN COMBINATION WITH CREDIT SUISSE FINANCIALPRODUCTS (CSFP) AN AGGREGATE LONG CALL, SHORT PUT POSITION INEXCESS OF THE 100,000 CONTRACT LIMIT IN THE SPX CLASS OF OPTIONCONTRACTS, THE ACTS, PRACTICES AND CONDUCT CONSITITUTE AVIOLATION OF EXCHANGE RULE 4.11 AND 24.4(A) BY CSFBC. CSFBC ANDCSFP HAVE INSTITUTED AN AUTOMATED MONITORING SURVEILLANCESYSTEM TO REPLACE THE PRIOR MANUAL AGGREGATION OF SPXPOSITIONS. CSFBC HAS HIRED A MANAGER AND AN ADDITIONALCOMPLIANCE OFFICER TO SUPPLEMENT ITS SURVEILLANCE OF SPX (ANDOTHER) POSISTIONS; AND CSFBC HAS COMPUTER PROGRAMMINGEXPERTISE DEDICATED TO THE MAINTENANCE OF THE AUTOMATEDSURVEILLANCE SYSTEM IT DEVELOPED.


Other






FROM ON OR ABOUT OCTOBER 1, 1997 THROUGH ON OR ABOUT OCTOBER29, 1997, CREDIT SUISSE FIRST BOSTON CORPORATION (CSFBC)CONTROLLED IN COMBINATION WITH CREDIT SUISSE FINANCIALPRODUCTS (CSFP) AN AGGREGATE LONG CALL, SHORT PUT POSITION INEXCESS OF THE 100,000 CONTRACT LIMIT IN THE SPX CLASS OF OPTIONCONTRACTS, THE ACTS, PRACTICES AND CONDUCT CONSITITUTE AVIOLATION OF EXCHANGE RULE 4.11 AND 24.4(A) BY CSFBC. CSFBC ANDCSFP HAVE INSTITUTED AN AUTOMATED MONITORING SURVEILLANCESYSTEM TO REPLACE THE PRIOR MANUAL AGGREGATION OF SPXPOSITIONS. CSFBC HAS HIRED A MANAGER AND AN ADDITIONALCOMPLIANCE OFFICER TO SUPPLEMENT ITS SURVEILLANCE OF SPX (ANDOTHER) POSISTIONS; AND CSFBC HAS COMPUTER PROGRAMMINGEXPERTISE DEDICATED TO THE MAINTENANCE OF THE AUTOMATEDSURVEILLANCE SYSTEM IT DEVELOPED.


i






Docket/Case Number:



Allegations: VIOLATIONS SECTION 17(A) OF THE EXCHANGE ACT AND 17 C.F.R.&&240.17A-3 AND 240.17A-4 THEREUNDER.



Resolution:

Other Sanctions Ordered: CONTINUE TO MAINTAIN OR, WITHIN SIXTY (60) DAYS OF THE DATE OFTHIS ORDER, DEVELOP, IMPLEMENT AND, THEREAFTER, MAINTAINPOLICIES AND PROCEDURES REASONABLY DESIGNED TO ENSURE FIRSTBOSTON'S FUTURE COMPLIANCE WITH THE PROVISIONS OF SECTION17(A) OF THE EXCHANGE ACT AND 17 C.F.R. &&240.17A-3 AND 240.17A-4THEREUNDER.

Sanction Details: CIVIL MONEY PENALTY IN THE AMOUNT OF $100,000.00 TO THE USTREASURY


Order






Sanction Details: CIVIL MONEY PENALTY IN THE AMOUNT OF $100,000.00 TO THE USTREASURY

Regulator Statement [TOP] 3/12/92 SEC NEWS DIGEST, ISSUE 92-11, DATED 1/16/92ADMINISTRATIVE PROCEEDINGS DISCLOSES; THE SEC, THE OFFICE OFTHE COMPTROLLER OF THE CURRENCY (OCC) AND THE BOARD OFGOVERNORS OF THE FEDERAL RESERVE SYSTEM (FRB) JOINTLYINSTITUTED ADMINISTRATIVE PROCEEDINGS AGAINST 98 REGISTEREDBROKER-DEALERS, REGISTERED GOVERNMENT SECURITIES BROKERSAND BANKS. THE ISSUANCE OF SEC, OCC AND FRB ORDERS IMPOSINGSANCTIONS, WHICH INCLUDE PROVISIONS DIRECTING THERESPONDENTS TO CEASE AND DESIST FROM COMMITTING FUTUREVIOLATIONS AND REQUIRING THE PAYMENT OF CIVIL MONEY PENALTIESTO THE US TREASURY IN THE TOTAL AMOUNT OF $5,165,000; AND THESEC'S ISSUANCE OF A REPORT PURSUANT TO SECTION 21(A) OF THESECURITIES EXCHANGE ACT OF 1934 REGARDING THE DISTRIBUTION OFCERTAIN DEBT SECURITIES ISSUED BY GOVERNMENT-SPONSOREDENTERPRISES. (RELS. 34-30192 - 34-30251) 3/18/92 SEC DOCKET 50 NO. 12,DATED 1/28/92 ADMINISTRATIVE PROCEEDING FILE NO. 3-7646 PAGE 1223& 1224 DISCLOSES; IT IS ORDERED THAT FIRST BOSTON SHALL, PRIOR TOTHE CLOSE OF BUSINESS ON THE DATE OF THIS ORDER, PAY A CIVILMONEY PENALTY IN THE AMOUNT OF $100,000.00 TO THE US TREASURYAND SHALL CONTINUE TO MAINTAIN OR, WITHIN SIXTY (60) DAYS OF THEDATE OF THIS ORDER, DEVELOP, IMPLEMENT AND, THEREAFTER,MAINTAIN POLICIES AND PROCEDURES REASONABLY DESIGNED TOENSURE FIRST BOSTON'S FUTURE COMPLIANCE WITH THE PROVISIONSOF SECTION 17(A) OF THE EXCHANGE ACT AND 17 C.F.R. &&240.17A-3 AND240.17A-4 THEREUNDER IN CONNECTION WITH ANY PRIMARYDISTRIBUTION OF UNSECURED DEBT SECURITIES ISSUED BY THE GSES.SUCH POLICIES AND PROCEDURES SHALL BE AVAILABLE FOR INSPECTIONUPON REQUEST BY THE SEC OR ITS STAFF. FIRST BOSTON SHALLCOMPLY WITH ALL POLICIES AND PROCEDURES IMPLEMENTED ORMAINTAINED & MODIFY PURSUANT TO THIS PARAGAPH PROVIDED THATSUCH POLICIES & PROCEDURES, AS MODIFIED, ARE REASONABLYDESIGNED TO ENSURE FIRST BOSTON'S FUTURE COMPLIANCE WITH THEPROVISIONS SET FORTH ABOVE.


Allegations: ALLEGED VIOLATIONS OF SECTIN 17(A) OF THE SECURITIES ANDEXCHANGE ACT OF 1934 AND RELATED RULES 17A-3 AND 17A-4, FORFAILURE TO PROPERLY MAINTAIN AND RETAIN CERTAIN RECORDS INCONNECTION WITH THE PRIMARY DISTRIBUTION OF THE DEBTSECURITIES ISSUED BT CERTAIN GOVERNMENT SPONSOREDENTERPRISES.









Other



Docket/Case Number: ADMINISTRATIVE PROCEEDING FILE #3-7646

Principal Product Type: Debt - Government


ALLEGED VIOLATIONS OF SECTIN 17(A) OF THE SECURITIES ANDEXCHANGE ACT OF 1934 AND RELATED RULES 17A-3 AND 17A-4, FORFAILURE TO PROPERLY MAINTAIN AND RETAIN CERTAIN RECORDS INCONNECTION WITH THE PRIMARY DISTRIBUTION OF THE DEBTSECURITIES ISSUED BT CERTAIN GOVERNMENT SPONSOREDENTERPRISES.


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS IN THEADMINISTRATIVE ORDER, FBC AGREED TO CEASE AND DESIST FROMFUTURE VIOLATIONS OF SECTION 17(A) AND RULES 17A-3 AND 17A-4 ANDPAID A CIVIL MONETARY PENALTY OF $100,000.00.

Firm Statement THIS ACTION WAS BROUGHT AGAINST FBC, ALONG WITH APPROXIMATELY100 BROKER-DEALERS AND COMMERCIAL BANKS THAT ARE PARTICIPANTSIN THE DISTRIBUTION OF THE DEBT SECURITIES OF CERTAINGOVERNMENT-SPONSORED ENTERPRISES.

THE $100,000.00 CIVIL PENALTY WAS ASSESSED BASED UPON SELLINGCONCESSIONS EARNED BT THE FIRMS IN CONNECTION WITH THEDISTRIBUTION OF THE DEBT SECURITIES OF THE GOVERNMENTSPONSORED ENTERPRISES AND NOT UPON THE RELATIVE CULPABILITYOF THE FIRMS IN THE CONSOLIDATED SEC PROCEEDINGS.


Settled


i



Allegations:











Docket/Case Number: NY-2017




Resolution:

Regulator Statement COMPLAINT #NY-2017, FILED 08/29/80, DISTRICT 12: DECISIONRENDERED DECEMBER 16, 1981, WHEREIN THE OFFER OF SETTLEMENTSUBMITTED BY THE RESPONDENT WAS ACCEPTED; THEREFORE THEDISTRICT BUSINESS CONDUCT COMMITTEE HAS DECIDED TO IMPOSE NOPENALTY BECAUSE OF THE CONFUSION SURROUNDING THE RIGHTS ANDDUTIES OF MEMBERS IN EXECUTING SWAP TRANSACTONS PRIOR TO THEAMENDMENTS TO THE "PAPILSKY" RULES (ARTICLE III - SECTION 8 -PAID HIGHER PRICES FOR PACIFIC GAS AND ELECTRIC AND U.STREASURY BONDS THAN THE FAIR MARKET PRICE OF SAID BONDS AT THETIME OF PURCHASE). AS ALL RIGHTS OF APPEAL AND REVIEW HAVE BEENWAIVED, DECISION WAS FINAL DECEMBER 16, 1981.

Settled


Initiated By: NATIONAL ASSOCIATION OF SECURITIES DEALERS (NASD)


Other






Allegations: ALLEGED FAILURE TO REPORT DAILY VOLUME IN SEVERAL SECURITIES INWHICH THE FIRM HAD ACTED AS MARKET MAKER.









Resolution:


Sanction Details: THE FIRST BOSTON CORPORATION (FBC) AGREED TO ACCEPT A $100.00FINE.

Sanctions Ordered: Monetary/Fine $100.00

Other


i






Docket/Case Number:



Allegations: CS FIRST BOSTON ENGAGED IN THE FOLLOWING: FRAUDULENTCOORDINATION OF QUOTE MOVEMENTS; UNDISCLOSED ARRANGEMENTSTO COORDINATE QUOTATIONS; FAILURE TO KEEP ACCURATE BOOKS ANDRECORDS; UNLAWFUL PROFITS AND OTHER GAINS.



Resolution:


Sanction Details: 2/11/99 SEC ADMINISTRATIVE PROCEEDING FILE NO. 3-9803 1/11/99: THESEC INSTITUTED ADMINISTRATIVE PROCEEDINGS AGAINST CREDITSUISSE FIRST BOSTON CORPORATION (CS FIRST BOSTON), WHOSUBMITTED AN OFFER OF SETTLEMENT WHICH THE SEC ACCEPTED. THESEC FINDS THE FOLLOWING: CS FIRST BOSTON TRADED NASDAQ STOCKSFOR ITS OWN ACCOUNTS AND FOR THE ACCOUNTS OF INSTITUTIONALAND RETAIL INVESTORS. IT IS ORDERED, PURSUANT TO SECTIONS 15(B)AND 21C OF THE EXCHANGE ACT, THAT: (1) CS FIRST BOSTON SHALLCEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATION OF,AND COMMITTING OR CAUSING ANY FUTURE VIOLATION OF, SECTIONS15(C)(1) AND (2), AND 17(A) OF THE EXCHANGE ACT, AND RULES 15C1-2,15C2-7 AND 17A-3; (2) SHALL, PAY A CIVIL PENALTY OF $122,500.00; WITHIN10 BUSINESS DAYS; (3) SHALL, PAY DISGORGEMENT OF $6,913.00 WITHIN10 BUSINESS DAYS PURSUANT TO SECTION 21C(E) OF THE EXCHANGEACT. (REL. NO. 34-40904, FILE NO. 3-9803)

Sanctions Ordered: Monetary/Fine $122,500.00Disgorgement/RestitutionCease and Desist/Injunction







2/11/99 SEC ADMINISTRATIVE PROCEEDING FILE NO. 3-9803 1/11/99: THESEC INSTITUTED ADMINISTRATIVE PROCEEDINGS AGAINST CREDITSUISSE FIRST BOSTON CORPORATION (CS FIRST BOSTON), WHOSUBMITTED AN OFFER OF SETTLEMENT WHICH THE SEC ACCEPTED. THESEC FINDS THE FOLLOWING: CS FIRST BOSTON TRADED NASDAQ STOCKSFOR ITS OWN ACCOUNTS AND FOR THE ACCOUNTS OF INSTITUTIONALAND RETAIL INVESTORS. IT IS ORDERED, PURSUANT TO SECTIONS 15(B)AND 21C OF THE EXCHANGE ACT, THAT: (1) CS FIRST BOSTON SHALLCEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATION OF,AND COMMITTING OR CAUSING ANY FUTURE VIOLATION OF, SECTIONS15(C)(1) AND (2), AND 17(A) OF THE EXCHANGE ACT, AND RULES 15C1-2,15C2-7 AND 17A-3; (2) SHALL, PAY A CIVIL PENALTY OF $122,500.00; WITHIN10 BUSINESS DAYS; (3) SHALL, PAY DISGORGEMENT OF $6,913.00 WITHIN10 BUSINESS DAYS PURSUANT TO SECTION 21C(E) OF THE EXCHANGEACT. (REL. NO. 34-40904, FILE NO. 3-9803)

Regulator Statement [TOP] 02/11/99 SEC NEWS DIGEST, ISSUE NO. 99-6, 1/11/99: THE SEC TODAYANNOUNCED THE INSTITUTION OF ADMINISTRATIVE PROCEEDINGSAGAINST 28 NASDAQ MARKET MAKING FIRMS AND 51 INDIVIDUALSASSOCIATED WITH SUCH FIRMS PURSUANT TO SECTIONS 15(B) AND 21COF THE SECURITIES EXCHANGE ACT OF 1934 AND, AS TO ONE FIRM,PURSUANT TO SECTION 203(K) OF THE INVESTMENT ADVISERS ACT OF1940. ALL OF THE RESPONDENTS CONSENTED, WITHOUT ADMITTING ORDENYING THE SEC'S FINDINGS, TO THE ENTRY OF ORDERS WHICHIMPOSE CIVIL MONETARY PENALTIES, DISGORGEMENT OF WRONGFULGAINS, SUSPENSIONS OR BARS, CEASE AND DESIST ORDERS AND OTHERSANCTIONS. (RELS. 34-40900 THROUGH 34-40930, INCLUSIVE; IA-1781; FILENO. 3-9803); (PRESS REL. 99-2) ***

2/11/99 SEC ADMINISTRATIVE PROCEEDING FILE NO. 3-9803 1/11/99: THESEC INSTITUTED ADMINISTRATIVE PROCEEDINGS AGAINST CREDITSUISSE FIRST BOSTON CORPORATION (CS FIRST BOSTON), WHOSUBMITTED AN OFFER OF SETTLEMENT WHICH THE SEC ACCEPTED. THESEC FINDS THE FOLLOWING: CS FIRST BOSTON TRADED NASDAQ STOCKSFOR ITS OWN ACCOUNTS AND FOR THE ACCOUNTS OF INSTITUTIONALAND RETAIL INVESTORS. IN CONNECTION WITH ITS ACTIVITIES AS ANASDAQ MARKET MAKER, CS FIRST BOSTON ENGAGED IN THEFOLLOWING: FRAUDULENT COORDINATION OF QUOTE MOVEMENTS;UNDISCLOSED ARRANGEMENTS TO COORDINATE QUOTATIONS; FAILURETO KEEP ACCURATE BOOKS AND RECORDS; UNLAWFUL PROFITS ANDOTHER GAINS. IT IS ORDERED, PURSUANT TO SECTIONS 15(B) AND 21COF THE EXCHANGE ACT, THAT: (1) CS FIRST BOSTON SHALL CEASE ANDDESIST FROM COMMITTING OR CAUSING ANY VIOLATION OF, ANDCOMMITTING OR CAUSING ANY FUTURE VIOLATION OF, SECTIONS 15(C)(1)AND (2), AND 17(A) OF THE EXCHANGE ACT, AND RULES 15C1-2, 15C2-7AND 17A-3; (2) SHALL, PAY A CIVIL PENALTY OF $122,500.00; WITHIN 10BUSINESS DAYS; (3) SHALL, PAY DISGORGEMENT OF $6,913.00 WITHIN 10BUSINESS DAYS PURSUANT TO SECTION 21C(E) OF THE EXCHANGE ACT.(REL. NO. 34-40904, FILE NO. 3-9803)






[TOP] 02/11/99 SEC NEWS DIGEST, ISSUE NO. 99-6, 1/11/99: THE SEC TODAYANNOUNCED THE INSTITUTION OF ADMINISTRATIVE PROCEEDINGSAGAINST 28 NASDAQ MARKET MAKING FIRMS AND 51 INDIVIDUALSASSOCIATED WITH SUCH FIRMS PURSUANT TO SECTIONS 15(B) AND 21COF THE SECURITIES EXCHANGE ACT OF 1934 AND, AS TO ONE FIRM,PURSUANT TO SECTION 203(K) OF THE INVESTMENT ADVISERS ACT OF1940. ALL OF THE RESPONDENTS CONSENTED, WITHOUT ADMITTING ORDENYING THE SEC'S FINDINGS, TO THE ENTRY OF ORDERS WHICHIMPOSE CIVIL MONETARY PENALTIES, DISGORGEMENT OF WRONGFULGAINS, SUSPENSIONS OR BARS, CEASE AND DESIST ORDERS AND OTHERSANCTIONS. (RELS. 34-40900 THROUGH 34-40930, INCLUSIVE; IA-1781; FILENO. 3-9803); (PRESS REL. 99-2) ***

2/11/99 SEC ADMINISTRATIVE PROCEEDING FILE NO. 3-9803 1/11/99: THESEC INSTITUTED ADMINISTRATIVE PROCEEDINGS AGAINST CREDITSUISSE FIRST BOSTON CORPORATION (CS FIRST BOSTON), WHOSUBMITTED AN OFFER OF SETTLEMENT WHICH THE SEC ACCEPTED. THESEC FINDS THE FOLLOWING: CS FIRST BOSTON TRADED NASDAQ STOCKSFOR ITS OWN ACCOUNTS AND FOR THE ACCOUNTS OF INSTITUTIONALAND RETAIL INVESTORS. IN CONNECTION WITH ITS ACTIVITIES AS ANASDAQ MARKET MAKER, CS FIRST BOSTON ENGAGED IN THEFOLLOWING: FRAUDULENT COORDINATION OF QUOTE MOVEMENTS;UNDISCLOSED ARRANGEMENTS TO COORDINATE QUOTATIONS; FAILURETO KEEP ACCURATE BOOKS AND RECORDS; UNLAWFUL PROFITS ANDOTHER GAINS. IT IS ORDERED, PURSUANT TO SECTIONS 15(B) AND 21COF THE EXCHANGE ACT, THAT: (1) CS FIRST BOSTON SHALL CEASE ANDDESIST FROM COMMITTING OR CAUSING ANY VIOLATION OF, ANDCOMMITTING OR CAUSING ANY FUTURE VIOLATION OF, SECTIONS 15(C)(1)AND (2), AND 17(A) OF THE EXCHANGE ACT, AND RULES 15C1-2, 15C2-7AND 17A-3; (2) SHALL, PAY A CIVIL PENALTY OF $122,500.00; WITHIN 10BUSINESS DAYS; (3) SHALL, PAY DISGORGEMENT OF $6,913.00 WITHIN 10BUSINESS DAYS PURSUANT TO SECTION 21C(E) OF THE EXCHANGE ACT.(REL. NO. 34-40904, FILE NO. 3-9803)


Initiated By: U.S. SECURITIES & EXCHANGE COMMISSION


Other


CIVIL PENALTY AND DISGORGEMENT


Docket/Case Number: FILE #3-9803, RELEASE #40900 AND #40904



Allegations: IN AN ADMINISTRATIVE PROCEEDING BROUGHT AGAINST 28 FIRMSINCLUDING ALL MAJOR NASDAQ MARKET MAKERS, THE SEC ALLEGEDTHAT IN 1994 MARKET MAKERS INCLUDING CSFBC VIOLATED PROVISIONSOF THE FEDERAL SECURITIES LAWS IN CONNECTION WITH NASDAQMARKET MAKER ACTIVITIES.



Resolution:

Other Sanctions Ordered: DISGORGEMENT OF $6913.00

Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS CSFBC AGREED TOPAY A CIVIL PENALTY OF $122,500.00 AND DISGORGEMENT OF $6,913.00 TOSETTLE THE PROCEEDING.

Sanctions Ordered: Monetary/Fine $122,500.00Disgorgement/Restitution

Settled


i


Allegations: CS FIRST BOSTON INVESTMENT MANAGEMENT CORP. (CSFBIMC), THEFUND'S INVESTMENT ADVISER, WILLFULLY VIOLATED SECTION 17(A) OFTHE SECURITIES ACT, SECTION 10(B) OF THE EXCHANGE ACT AND RULE10B-5, AND SECTIONS 206(1) AND 206(2) OF THE ADVISERS ACT INCONNECTION WITH THE FRAUDULENT CONDUCT OF WALSH ANDBRENNAN, AND THAT CSFBIMC FAILED REASONABLY TO SUPERVISE ITSEMPLOYEES WITH A VIEW TO PREVENTING VIOLATIONS OF THE FEDERALSECURITIES LAWS.











Docket/Case Number:



CS FIRST BOSTON INVESTMENT MANAGEMENT CORP. (CSFBIMC), THEFUND'S INVESTMENT ADVISER, WILLFULLY VIOLATED SECTION 17(A) OFTHE SECURITIES ACT, SECTION 10(B) OF THE EXCHANGE ACT AND RULE10B-5, AND SECTIONS 206(1) AND 206(2) OF THE ADVISERS ACT INCONNECTION WITH THE FRAUDULENT CONDUCT OF WALSH ANDBRENNAN, AND THAT CSFBIMC FAILED REASONABLY TO SUPERVISE ITSEMPLOYEES WITH A VIEW TO PREVENTING VIOLATIONS OF THE FEDERALSECURITIES LAWS.


Resolution:


Sanction Details: IN A RELATED SETTLED ADMINISTRATIVE AND CEASE AND DESISTPROCEEDING (IN THE MATTER OF CS FIRST BOSTON INVESTMENTMANAGEMENT CORP, ADMINISTRATIVE PROCEEDING FILE NO. 3-9715) THESEC FOUND THAT WITHOUT ADMITTING OR DENYING THE ALLEGATIONSCSFBIMC CONSENTED TO CEASE AND DESIST FROM COMMITTING ORCAUSING ANY VIOLATIONS OF, AND COMMITTING OR CAUSING ANYFUTURE VIOLATIONS OF, SECTION 17(A) OF THE SECURITIES ACT,SECTION 10(B) OF THE EXCHANGE ACT AND RULE 10B-5, AND SECTIONS206(1) AND 206(2) OF THE ADVISERS ACT AND TO PAY A CIVIL MONEYPENALTY OF $500,000. CSFBIMC ALSO CONSENTED TO BE CENSURED.(REL. 33-7584; 34-40466; IA-1755; IC-23463; FILE NO. 3-9716)

Regulator Statement [TOP] 9/26/98JW SEC NEWS DIGEST ISSUE 98-185 9/24/98: ON SEPTEMBER23, THE SEC INSTITUTED CONTESTED ADMINISTRATIVE AND CEASE ANDDESIST PROCEEDINGS AGAINST SEAN P. BRENNAN AND KEITH E. WALSH.THE DIVISION ALLEGES THAT BRENNAN AND WALSH VIOLATED ORCAUSED, AND WILLFULLY VIOLATED, AIDED, ABETTED, COUNSELED,COMMANDED, INDUCED OR PROCURED VIOLATIONS OF THE ANTIFRAUDPROVISIONS--SECTION 17(A) OF THE SECURITIES ACT, SECTION 10(B) OFTHE EXCHANGE ACT AND RULE 10B-5, AND SECTIONS 206(1) AND 206(2) OFTHE ADVISERS ACT. THE DIVISION SEEKS CIVIL MONEY PENALTIES ANDADMINISTRATIVE SANCTIONS AGAINST BOTH RESPONDENTS.

IN A RELATED SETTLED ADMINISTRATIVE AND CEASE AND DESISTPROCEEDING (IN THE MATTER OF CS FIRST BOSTON INVESTMENTMANAGEMENT CORP, ADMINISTRATIVE PROCEEDING FILE NO. 3-9715) THESEC FOUND THAT CS FIRST BOSTON INVESTMENT MANAGEMENT CORP.(CSFBIMC), THE FUND'S INVESTMENT ADVISER, WILLFULLY VIOLATEDSECTION 17(A) OF THE SECURITIES ACT, SECTION 10(B) OF THEEXCHANGE ACT AND RULE 10B-5, AND SECTIONS 206(1) AND 206(2) OF THEADVISERS ACT IN CONNECTION WITH THE FRAUDULENT CONDUCT OFWALSH AND BRENNAN DESCRIBED ABOVE, AND THAT CSFBIMC FAILEDREASONABLY TO SUPERVISE ITS EMPLOYEES WITH A VIEW TOPREVENTING VIOLATIONS OF THE FEDERAL SECURITIES LAWS. WITHOUTADMITTING OR DENYING THE ALLEGATIONS CSFBIMC CONSENTED TOCEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS OF,AND COMMITTING OR CAUSING ANY FUTURE VIOLATIONS OF, SECTION17(A) OF THE SECURITIES ACT, SECTION 10(B) OF THE EXCHANGE ACTAND RULE 10B-5, AND SECTIONS 206(1) AND 206(2) OF THE ADVISERS ACTAND TO PAY A CIVIL MONEY PENALTY OF $500,000. CSFBIMC ALSOCONSENTED TO BE CENSURED. (REL. 33-7584; 34-40466; IA-1755; IC-23463;FILE NO. 3-9716)


Consent






[TOP] 9/26/98JW SEC NEWS DIGEST ISSUE 98-185 9/24/98: ON SEPTEMBER23, THE SEC INSTITUTED CONTESTED ADMINISTRATIVE AND CEASE ANDDESIST PROCEEDINGS AGAINST SEAN P. BRENNAN AND KEITH E. WALSH.THE DIVISION ALLEGES THAT BRENNAN AND WALSH VIOLATED ORCAUSED, AND WILLFULLY VIOLATED, AIDED, ABETTED, COUNSELED,COMMANDED, INDUCED OR PROCURED VIOLATIONS OF THE ANTIFRAUDPROVISIONS--SECTION 17(A) OF THE SECURITIES ACT, SECTION 10(B) OFTHE EXCHANGE ACT AND RULE 10B-5, AND SECTIONS 206(1) AND 206(2) OFTHE ADVISERS ACT. THE DIVISION SEEKS CIVIL MONEY PENALTIES ANDADMINISTRATIVE SANCTIONS AGAINST BOTH RESPONDENTS.

IN A RELATED SETTLED ADMINISTRATIVE AND CEASE AND DESISTPROCEEDING (IN THE MATTER OF CS FIRST BOSTON INVESTMENTMANAGEMENT CORP, ADMINISTRATIVE PROCEEDING FILE NO. 3-9715) THESEC FOUND THAT CS FIRST BOSTON INVESTMENT MANAGEMENT CORP.(CSFBIMC), THE FUND'S INVESTMENT ADVISER, WILLFULLY VIOLATEDSECTION 17(A) OF THE SECURITIES ACT, SECTION 10(B) OF THEEXCHANGE ACT AND RULE 10B-5, AND SECTIONS 206(1) AND 206(2) OF THEADVISERS ACT IN CONNECTION WITH THE FRAUDULENT CONDUCT OFWALSH AND BRENNAN DESCRIBED ABOVE, AND THAT CSFBIMC FAILEDREASONABLY TO SUPERVISE ITS EMPLOYEES WITH A VIEW TOPREVENTING VIOLATIONS OF THE FEDERAL SECURITIES LAWS. WITHOUTADMITTING OR DENYING THE ALLEGATIONS CSFBIMC CONSENTED TOCEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS OF,AND COMMITTING OR CAUSING ANY FUTURE VIOLATIONS OF, SECTION17(A) OF THE SECURITIES ACT, SECTION 10(B) OF THE EXCHANGE ACTAND RULE 10B-5, AND SECTIONS 206(1) AND 206(2) OF THE ADVISERS ACTAND TO PAY A CIVIL MONEY PENALTY OF $500,000. CSFBIMC ALSOCONSENTED TO BE CENSURED. (REL. 33-7584; 34-40466; IA-1755; IC-23463;FILE NO. 3-9716)




Other






Allegations: CSFB (1) FAILED TO SUBMIT ONLY THE BRACKET INFORMATIONSUBMITTED TO IT BY THE MEMBERS EXECUTING THE TRADES ON THERECORD OF THE TRANSACTIONS SUBMITTED TO THE CLEARING HOUSE,IN VIOLATION OF REGULATION 332.02; AND (2) FAILED TO MAKE ALL TRADEDATA SUBMISSIONS IN A CORRECT MANNER, IN VIOLATION OFREGULATION 332.08









Resolution:


Sanction Details: CSFB AGREED TO PAY A FINE OF $2500.00

Firm Statement ON JUNE 24,1998 THE BUSINESS CONDUCT COMMITTEE ("COMMITTEE")ISSUED PRELIMINARY CHARGES AGAINST CREDIT SUISSE FIRST BOSTONCORPORATION ("CSFB'), A MEMBER FIRM BASED ON ITS APPARENTVIOLATION OF A REGULATION OF THE CHICAGO BOARD OF TRADE("CBOT"). THE PRELIMINARY CHARGES ALLEGED THAT CSFB: (1) FAILED TOSUBMIT ONLY THE BRACKET INFORMATION SUBMITTED TO IT BY THEMEMBER EXECUTING THE TRADES ON THE RECORD OF THETRANSACTIONS SUBMITTED TO THE CLEARING HOUSE, IN VIOLATION OFREGULATION 3322.02; AND (2) FAILED TO MAKE ALL TRADE DATASUBMISSIONS IN THE CORRECT MANNER, IN VIOLATION OF REGULATION382.08 ON AUGUST 3, 1998 THE COMMITTEE OF THE BOARD OF TRADEVOTED TO ACCEPT AN OFFER OF SETTLEMENT SUBMITTED BY CREDITSUISSE FIRST BOSTON WITHOUT ADMITTING OR DENYING ANY VIOLATION,CSFB AGREED TO PAY A FINE OF $2500.00 THE COMMITTEESDECISIONACCEPTING THE OFFER OF SETTLEMENT BECAME EFFECTIVE ONSEPTEMBER 18, 1998.




i





Docket/Case Number:



Allegations: VIOLATIONS OF SECTIONS 17(A)(2) AND (3) OF THE SECURITIES ACT,SECTION 15B(C)(1) OF THE EXCHANGE ACT, AND MSRB RULE G17.









Resolution:


Sanction Details: $800,000.00 CIVIL PENALTY.

Regulator Statement TOP] +02/18/1998 + SEC NEWS DIGEST ISSUE 98-19, DATED 1/29/98ENFORCEMENT PROCEEDINGS DISCLOSES:THAT ON JANUARY 29 ITINSTITUTED AND SIMULTANEOUSLY SETTLED A PUBLIC ADMINISTRATIVEAND CEASE-AND-DESIST PROCEEDING AGAINSTCREDIT SUISSE FIRST BOSTON CORPORATION ET.AL., AS PART OF THESETTLEMENT, FIRST BOSTON, NOWLIN, AND MONTAGUE AGREED TOPAY A TOTAL OF $870,000 IN CIVIL PENALTIES TO THE TREASURY. FIRSTBOSTON UNDERWROTE ORANGE COUNTY'S OFFERING OF$320,040,000 IN PENSION OBLIGATION BONDS ON 9/28/94 (PENSIONBONDS). DURING THE UNDERWRITING, FIRST BOSTON, THROUGH NOWLINAND MONTAGUE, PARTICIPATED IN DRAFTING THE OFFICIAL STATEMENT.FIRST BOSTON THEN OFFERED AND SOLD THE PENSION BONDSTHROUGH THE OFFICIAL STATEMENT. THE SEC ORDER FOUND THATDESPITE THE INFORMATION KNOWN OR READILY AVAILABLE TO THEM,FIRST BOSTON, NOWLIN, AND MONTAGUE APPROVED THE FALSE ANDMISLEADING OFFICIAL STATEMENT WITHOUT MAKING SUFFICIENTINQUIRY INTO THE POOLS' INVESTMENTSTRATEGY AND THE RISKS OF THAT STRATEGY, USE OF REVERSEREPURCHASE AGREEMENTS, INVESTMENT IN DERIVATIVES, ANDDECLINING INVESTMENT RESULTS.FIRST BOSTON, NOWLIN, ANDMONTAGUE OFFERED TO SETTLE THE ACTION BY CONSENTING TO ANORDER TO CEASE AND DESIST FROM COMMITTING OR CAUSING ANYVIOLATIONS OF SECTIONS 17(A)(2) AND (3) OF THE SECURITIES ACT,SECTION 15B(C)(1) OF THE EXCHANGE ACT, AND MSRB RULE G17. THEORDER AGAINST FIRST BOSTON ALSO FOUND THAT THE FIRM FAILEDREASONABLY TO SUPERVISE NOWLIN AND MONTAGUE WITH A VIEWTOWARDS PREVENTING THEIR VIOLATIONS AND WILL REQUIRE THAT THEFIRM PERFORM CERTAIN UNDERTAKINGS SHOULD IT RESUMEUNDERWRITING MUNICIPAL SECURITIES OFFERINGS. ADDITIONALLY,FIRST BOSTON HAS AGREED TO PAY A CIVIL PENALTY IN THE AMOUNT OF$800,000 THE COMMISSION AGREED TO DISMISS ITS PREVIOUSLY FILEDINJUNCTIVE ACTION AGAINST FIRST BOSTON, NOWLIN AND MONTAGUE.(RELS. 33-7498; 34-39595; FILE NO. 3-9535)


Consent







Initiated By: US SECURITIES & EXCHANGE COMMISSION





Docket/Case Number: SACV96 - 1253GLT(EEX)


Other Product Type(s): PENSION OBLIGATION BONDS

Allegations: THE COMPLAINT ALLEGES THAT IN CONNECTION WITH THEUNDERWRITING OF THE 1994 PENSION OBLIGATION BONDS, THEDEFENDANTS "KNEW OR WERE RECKLESS IN NOT KNOWING," THATMATERIAL INFORMATION ABOUT THE ORANGE COUNTY INVESTMENTPOOLS WAS MISREPRESENTED IN OR OMITTED FROM THE OFFICIALSTATEMENT. IT ALLEGES THREE CLAIMS RELIEF- VIOLATION OF ``17(A) OFTHE SECURITIES ACT AND `10(B) OF THE EXCHANGE ACT; `15(C)(1) OF THEEXCHANGE ACT AND `15B(C)(1) OF THE EXCHANGE ACT AND MUNICIPALSECURITIES RULEMAKING BOARD G-17. THE RELIEF SOUGHT PRINCIPALLYINCLUDES A PERMANENT INJUNCTION AGAINST SAID VIOLATION AND CIVILPENALTIES IN AN AMOUNT UNSTATED.



Resolution:


Sanction Details: ON JANUARY 29, 1998 THE LAWSUIT WAS DISMISSED WITH PREJUDICE,UPON THE CONSENT OF THE SEC, CS FIRST BOSTON AND THE INDIVIDUALDEFENDANTS AS PART OF AN OUT OF COURT SETTLEMENT OF THISMATTER. ALSO PURSUANT TO THAT SETTLEMENT CS FIRST BOSTON ANDTHE INDIVIDUAL DEFENDANTS WITHOUT ADMITTING OR DENYINGLIABILITY CONSENTED TO THE ENTRY OF AN SEC ADMINISTRATIVE ORDERFINDING NEGLIGENCE-BASED VIOLATIONS OF SECTIONS 17(A)(2) AND(A)(3) OF THE SECURITIES ACT AND MSRB RULE G-17. CS FIRST BOSTONAND THE TWO INDIVIDUALS AGREED TO PAY MONETARY PENALTIES OF$800,000.00, $35,000.00 AND $35,000.00 RESPECTIVELY. THE SECADMINISTRATIVE ORDER CONTAINED NO ALLEGATION OR FINDING OF ANYFRAUDULENT INTENTIONAL OR RECKLESS MISCONDUCT BY CS FIRSTBOSTON OR ANY OF ITS CURRENT OR FORMER EMPLOYEES.


Dismissed






ON JANUARY 29, 1998 THE LAWSUIT WAS DISMISSED WITH PREJUDICE,UPON THE CONSENT OF THE SEC, CS FIRST BOSTON AND THE INDIVIDUALDEFENDANTS AS PART OF AN OUT OF COURT SETTLEMENT OF THISMATTER. ALSO PURSUANT TO THAT SETTLEMENT CS FIRST BOSTON ANDTHE INDIVIDUAL DEFENDANTS WITHOUT ADMITTING OR DENYINGLIABILITY CONSENTED TO THE ENTRY OF AN SEC ADMINISTRATIVE ORDERFINDING NEGLIGENCE-BASED VIOLATIONS OF SECTIONS 17(A)(2) AND(A)(3) OF THE SECURITIES ACT AND MSRB RULE G-17. CS FIRST BOSTONAND THE TWO INDIVIDUALS AGREED TO PAY MONETARY PENALTIES OF$800,000.00, $35,000.00 AND $35,000.00 RESPECTIVELY. THE SECADMINISTRATIVE ORDER CONTAINED NO ALLEGATION OR FINDING OF ANYFRAUDULENT INTENTIONAL OR RECKLESS MISCONDUCT BY CS FIRSTBOSTON OR ANY OF ITS CURRENT OR FORMER EMPLOYEES.


i






Docket/Case Number: CMS970007(A) AWC



Allegations:



Resolution:


Sanction Details:

Regulator Statement LETTER OF ACCEPTANCE, WAIVER & CONSENT NO. CMS970007(A) AWC.

ON JULY 11, 1997, CS FIRST BOSTON CORPORATION (FBCO) WASNOTIFIED THAT THE LETTER OF ACCEPTANCE, WAIVER AND CONSENT(AWC) IT SUBMITTED WAS ACCEPTED BY THE MARKET REGULATION ANDTHE NATIONAL BUSINESS CONDUCT COMMITTEES. THE AWC ALLEGESTHATFBCO VIOLATED MARKETPLACE RULE 6240 AND CONDUCT RULE 2110 FORTHE FOLLOWING ACTIVITY:

DURING THE PERIOD SEPTEMBER 3, 1996 TO OCTOBER 11, 1996, FBCOFAILED TO REPORT 23 MANDATORY FIPS TRANSACTIONS WITHIN FIVEMINUTES OF EXECUTION. IN ADDITION, FBCO FAILED TO ENFORCEWRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO FIPS RULESANDREGULATIONS. FBCO WAS CENSURED AND FINED $6,000.

***$6,000.00 PAID ON 08/15/97, INVOICE # 97-MS-695***








LETTER OF ACCEPTANCE, WAIVER & CONSENT NO. CMS970007(A) AWC.

ON JULY 11, 1997, CS FIRST BOSTON CORPORATION (FBCO) WASNOTIFIED THAT THE LETTER OF ACCEPTANCE, WAIVER AND CONSENT(AWC) IT SUBMITTED WAS ACCEPTED BY THE MARKET REGULATION ANDTHE NATIONAL BUSINESS CONDUCT COMMITTEES. THE AWC ALLEGESTHATFBCO VIOLATED MARKETPLACE RULE 6240 AND CONDUCT RULE 2110 FORTHE FOLLOWING ACTIVITY:

DURING THE PERIOD SEPTEMBER 3, 1996 TO OCTOBER 11, 1996, FBCOFAILED TO REPORT 23 MANDATORY FIPS TRANSACTIONS WITHIN FIVEMINUTES OF EXECUTION. IN ADDITION, FBCO FAILED TO ENFORCEWRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO FIPS RULESANDREGULATIONS. FBCO WAS CENSURED AND FINED $6,000.

***$6,000.00 PAID ON 08/15/97, INVOICE # 97-MS-695***


Initiated By: NASD MARKET REGULATION & NATIONAL BUSINESS CONDUCTCOMMITTEE


Other



Docket/Case Number: CMS970007(A)



Allegations: THE NASD ALLEGED THAT CREDIT SUISSE FIRST BOSTON CORPORATION(CSFBC) VIOLATED MARKETPLACE RULE 6240 AND CONDUCT RULE 2110FOR THE FOLLOWING ACTIVITY; DURING THE PERIOD OF 9/3/96 TO10/11/96, CSFBC FAILED TO REPORT 23 MANDATORY FIXED INCOMEPRICING SYSTEM ("FIPS") TRANSACTIONS WITHIN FIVE MINUTES OFEXECUTION AND FAILED TO ENFORCE WRITTEN SUPERVISORYPROCEDURES WITH RESPECT TO FIPS RULES AND REGULATIONS.



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, CSFBCCONSENTED TO A CENSUREAND A $6,000.00 FINE.


Consent


i















Allegations: COMPLAINT NO. CMS970009 WAS ISSUED BY THE MARKET REGULATIONCOMMITTEE ON JULY 3, 1997. THE COMPLAINT CONTAINS THREECAUSES. CAUSE ONE ALLEGES VIOLATIONS OF RULE 11AC1-1 OF THESECURITIES AND EXCHANGE ACT OF 1934, MARKETPLACE RULE 4613(B)AND CONDUCT RULES 2110 AND 3320. CAUSE TWO ALLEGES VIOLATIONSOF MARKETPLACE RULE 4613(B) AND CONDUCT RULES 2110 AND 3320.CAUSE THREE ALLEGES A VIOLATION OF CONDUCT RULES 2110 AND 3010.



Resolution:

Other Sanctions Ordered: UNDERTAKE TO REVISED W.S.P. RELATING TO FIRM QUOTE COMPLIANCE.


Regulator Statement *




Allegations: THE COMPLAINT ALLEGES VIOLATION OF RULE 11AC1-1(C) OF THESECURITIES AND EXCHANGE ACT OF 1934, MARKETPLACE RULE 4613(B)AND CONDUCT RULES 2110 AND 3320, CLAIMING THAT CSFBC FAILED TOHONOR PUBLISHED QUOTATIONS AND FAILED TO ESTABLISH, MAINTAINAND ENFORCE ADEQUATE SUPERVISORY PROCEDURES TO ENSURECOMPLIANCE WITH THE AFOREMENTIONED.







Initiated By: NASD REGULATION, INC. MARKET REGULATION COMMITTEE


Other


ADMINISTRATIVE






Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS OF THE COMPLAINT,CSFBC HAS CONSENTED TO THE IMPOSITION BY THE COMMITTEE OF THESANCTIONS AS FOLLOWS, CENSURE AND FINE OF $7500.00 ANDREQUIREMENT TO REVISE THE FIRM'S WRITTEN SUPERVISORYPROCEDURES RELATING TO FIRM QUOTE COMPLIANCE.


Consent


i









Allegations:









Resolution:


Sanction Details:

Regulator Statement LETTER OF ACCEPTANCE, WAIVER & CONSENT NO. CMS960201 AWC. ONAPRIL 23, 1997, CS FIRST BOSTON CORPORATION (FBCO) WAS NOTIFIEDTHAT THE LETTER OF ACCEPTANCE, WAIVER AND CONSENT (AWC) ITSUBMITTED WAS ACCEPTED BY THE MARKET REGULATION AND THENATIONAL BUSINESS CONDUCT COMMITTEES. THE AWC ALLEGES THATFBCO VIOLATED MARKETPLACE RULE 4613(e) FOR ENTERING ORMAINTAINING QUOTATIONS IN THE NASDAQ STOCK MARKET, DURINGNORMAL BUSINESS HOURS, WHICH CAUSED A LOCKED MARKETCONDITIONTO OCCUR IN TWO SECURITIES. FBCO WAS FINED $1,000.

***$1,000.00 PAID ON 6/5/97, INVOICE #97-MS-433***




Initiated By: NASD REGULATION, INC., MARKET REGULATION COMMITTEE (NASD)


Other






Allegations: THE NASD ALLEGES THAT ON JANUARY 12 AND 17, 1996, CREDIT SUISSEFIRST BOSTON CORPORATION (CSFBC) ENTERED OR MAINTAINEDQUOTATIONS IN THE NASDAQ MARKET, WHICH CAUSED A LOCKED AND/ORCROSSED MARKET CONDITION, AND IN DOING SO, VIOLATEDMARKETPLACE RULE 4613(E).









Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS CONTAINED IN THECOMPPLAINT, CSFBC CONSENTED TO A $1000.00 FINE.




i









Allegations:



Resolution:


Sanction Details:

Regulator Statement COMPLAINT NO. CMS960246 WAS FILED BY THE MARKET SURVEILLANCECOMMITTEE ON NOVEMBER 18, 1996 ALLEGING VIOLATIONS OFMARKETPLACE RULE 4613(D) BY ENTERING QUOTATIONS INTO THENASDAQSTOCK MARKET WHICH EXCEEDED THE PARAMETERS FOR MAXIMUMALLOWABLE SPREADS. THE MARKET REGULATION COMMITTEE ISSUED ADECISION AND ORDER OF ACCEPTANCE OF RESPONDENT CS FIRSTBOSTONCORP.'S OFFER OF SETTLEMENT IN COMPLAINT NO. CMS9600246 ONAPRIL 29, 1997. THE COMMITTEE FINDS THAT FIRST BOSTON VIOLATEDMARKETPLACE RULE 4613(D) AS ALLEGED IN THE COMPLAINT. FIRSTBOSTON IS CENSURED AND FINED $6,000.








www.finra.org/brokercheck User GuidanceCOMPLAINT NO. CMS960246 WAS FILED BY THE MARKET SURVEILLANCECOMMITTEE ON NOVEMBER 18, 1996 ALLEGING VIOLATIONS OFMARKETPLACE RULE 4613(D) BY ENTERING QUOTATIONS INTO THENASDAQSTOCK MARKET WHICH EXCEEDED THE PARAMETERS FOR MAXIMUMALLOWABLE SPREADS. THE MARKET REGULATION COMMITTEE ISSUED ADECISION AND ORDER OF ACCEPTANCE OF RESPONDENT CS FIRSTBOSTONCORP.'S OFFER OF SETTLEMENT IN COMPLAINT NO. CMS9600246 ONAPRIL 29, 1997. THE COMMITTEE FINDS THAT FIRST BOSTON VIOLATEDMARKETPLACE RULE 4613(D) AS ALLEGED IN THE COMPLAINT. FIRSTBOSTON IS CENSURED AND FINED $6,000.



Initiated By: NASD REGULATION, INC., MARKET REGULATION COMMITTEE (NASD)


Other






Allegations: THE COMPLAINT ALLEGES THAT, IN EARLY 1996, CREDIT SUISSE FIRSTBOSTON CORPORATION (CSFBC) VIOLATED MARKETPLACE RULE 4613(D),BY EXCEEDING THE PARAMETERS FOR MAXIMUM ALLOWABLE SPREADSIN FIVE NASDAQ SECURITIES.



Resolution:


Sanction Details: CSFBC SUBMITTED AN OFFER OF SETTLEMENT WHERBY, WITHOUTADMITTING OR DENYING THE ALLEGATIONS OF THE COMPLAINT,CONSENTED TO A CENSURE AND A $6,000.00 FINE. ON APRIL 20TH, THENASD ACCEPTED CSFBC'S OFFER OF A SETTLEMENT.


Settled


i















Allegations:



Resolution:


Sanction Details:

Regulator Statement LETTER OF ACCEPTANCE, WAIVER AND CONSENT NO. CMS960036 AWC

ON JULY 15, 1996, CS FIRST BOSTON CORPORATION (FBCO) WASNOTIFIED THAT THE LETTER OF ACCEPTANCE, WAIVER AND CONSENT(AWC) IT SUBMITTED WAS ACCEPTED BY THE MARKET SURVEILLANCEANDTHE NATIONAL BUSINESS CONDUCT COMMITTEES. UNDER THE AWC,FBCOIS ALLEGEDLY IN VIOLATION OF PART V, SECTION 2(d) OF SCHEDULE DTO THE ASSOCIATION'S BY-LAWS IN THAT FBCO, ON NUMEROUSOCCASIONS, ENTERED QUOTATIONS INTO THE NASDAQ SYSTEM THATEXCEEDED THE PARAMETERS FOR THE MAXIMUM ALLOWABLE SPREAD.

FBCO IS HEREBY FINED $7,500. THE AWC BECAME FINAL ON JULY 15,1996.










Initiated By: NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. (NASD)


Other






Allegations: THE NASD ALLEGED THAT ON CERTAIN OCCASIONS IN 1995, CSFBCENTERED QUATATIONS INTO THE NASDAQ SYSTEM THAT EXCEEDED THEPARAMETERS FOR THE MAXIMUM ALLOWABLE SPREAD AS SET FORTH INTHE ASSOCIATION'S BY-LAWS



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, CSFBCCONSENTED TO THE IMPOSITION OF A $7,500.00 FINE.




i







Allegations:










Resolution Date:

Resolution:


Sanction Details:


THE LETTER OF ACCEPTANCE, WAIVER AND CONSENT (AWC) SUBMITTEDBYCS FIRST BOSTON CORPORATION (FBCO) WAS ACCEPTED BY THEMARKETSURVEILLANCE AND THE NATIONAL BUSINESS CONDUCT COMMITTEES ONJULY 1, 1996. IN THE AWC, FBCO IS IN VIOLATION OF PART X,SECTION 1 AND PART XI, SECTION 2 OF SCHEDULE D TO THEASSOCIATION'S BY-LAWS FOR FAILING TO REPORT 218 TRANSACTIONS INNASDAQ SECURITIES TO THE AUTOMATED CONFIRMATION TRANSACTIONSERVICE.

THE MARKET SURVEILLANCE COMMITTEE IMPOSED A CENSURE AND AFINEOF $5,000. IN ADDITION, FBCO SHALL UNDERTAKE TO IMPLEMENT ITSSUPERVISORY PROCEDURES TO PREVENT SUCH A PATTERN ORPRACTICE OFFAILURE TO REPORT TRANSACTIONS. SUCH PROCEDURES SHALL BESUBMITTED TO THE MARKET SURVEILLANCE DEPARTMENT WITHIN TENBUSINESS DAYS OF FBCO'S SUBMISSION OF ITS ACCEPTANCE OF THISAWC.

THE AWC BECAME FINAL ON JULY 1, 1996.










Initiated By: NATIONAL ASSOCITION OF SECURITIES DEALERS, INC. (NASD)


Other






Allegations: THE NASD ALLEGED THAT ON ONE TRADE DATE IN JANUARY 1995 CSFBCFAILED TO REPORT CERTAIN TRANSACTIONS IN NASDAQ SECURITIES TOTHE AUTOMATED CONFIRMATION TRANSACTION SERVICE.



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, CSFBCCONSENTED TO A CENSURE AND THE PAYMENT OF A $5000.00 FINE




i








Allegations:









Resolution:


Sanction Details:


THE LETTER OF ACCEPTANCE, WAIVER AND CONSENT (AWC) SUBMITTEDBYCS FIRST BOSTON CORPORATION (FBCO) WAS ACCEPTED BY THEMARKETSURVEILLANCE AND DISTRICT BUSINESS CONDUCT COMMITTEES ONJULY1, 1996. UNDER THE AWC FBCO IS IN VIOLATION OF PART V, SECTION2(d) OF SCHEDULE D TO THE ASSOCIATION'S BY-LAWS FOR ENTERINGQUOTATIONS INTO THE NASDAQ SYSTEM THAT EXCEEDED THEPARAMETERSFOR MAXIMUM ALLOWABLE SPREADS.

FBCO IS HEREBY FINED $3,000. THE AWC BECOMES FINAL ON JULY 1,1996.










Allegations: THE NASD ALLEGED THAT ON 2 TRADE DATES IN 1995 CSFBC ENTEREDQUATATIONS INTO THE NASDAQ SYSTEM THAT EXCEEDED THEPARAMETERS FOR MAXIMUM ALLOWABLE SPREADS AS SET FORTH IN THENASD'S BY-LAWS.








Other




Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS CSFBC CONSENTEDTO THE IMPOSITION OF A $3000.00 FINE.




i






Docket/Case Number: CMS940120(A)



Allegations:



Resolution:


Sanction Details:

Regulator Statement LETTER OF ACCEPTANCE, WAIVER AND CONSENT NO. CMS940120(A) AWC

THE LETTER OF ACCEPTANCE, WAIVER AND CONSENT (AWC) SUBMITTEDBYCS FIRST BOSTON CORPORATION (FBCO) WAS ACCEPTED BY THEMARKETSURVEILLANCE AND THE NATIONAL BUSINESS CONDUCT COMMITTEES ONJULY 1, 1996. IN THE AWC, FBCO IS IN VIOLATION OF RULE11Ac1-1(c) OF THE SECURITIES EXCHANGE ACT OF 1934, PART V,SECTION 2(b) OF SCHEDULE D TO THE ASSOCIATION'S BY-LAWS ANDARTICLE III, SECTIONS 1 AND 6 OF THE ASSOCIATION'S RULES OFFAIR PRACTICE. BASED ON THE FOREGOING, FBCO IS CENSURED ANDFINED $17,500.

THIS AWC BECOMES FINAL ON JULY 1, 1996.

***$17,500.00 PAID ON 08/28/96, INVOICE #96-MS-635**








Regulator Statement LETTER OF ACCEPTANCE, WAIVER AND CONSENT NO. CMS940120(A) AWC

THE LETTER OF ACCEPTANCE, WAIVER AND CONSENT (AWC) SUBMITTEDBYCS FIRST BOSTON CORPORATION (FBCO) WAS ACCEPTED BY THEMARKETSURVEILLANCE AND THE NATIONAL BUSINESS CONDUCT COMMITTEES ONJULY 1, 1996. IN THE AWC, FBCO IS IN VIOLATION OF RULE11Ac1-1(c) OF THE SECURITIES EXCHANGE ACT OF 1934, PART V,SECTION 2(b) OF SCHEDULE D TO THE ASSOCIATION'S BY-LAWS ANDARTICLE III, SECTIONS 1 AND 6 OF THE ASSOCIATION'S RULES OFFAIR PRACTICE. BASED ON THE FOREGOING, FBCO IS CENSURED ANDFINED $17,500.

THIS AWC BECOMES FINAL ON JULY 1, 1996.

***$17,500.00 PAID ON 08/28/96, INVOICE #96-MS-635**




Other



Docket/Case Number: CMS940120(A)AWC



Allegations: THE NASD ALLEGED THAT, ON CERTAIN OCCASSIONS IN 1994, CSFBCFAILED TO HONOR THE QUATATIONS IT CAUSED TO BE DISSEMINATEDTHROUGH THE NASDAQ SYSTEM.



Resolution:










Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, CSFBCCONSENTED TO A CENSURE AND THE IMPOSITION OF A $17,500.00 FINE.


i









Allegations:



Resolution:


Sanction Details:

Regulator Statement ON APRIL 11, 1996, DISTRICT NO. 10 NOTIFIED RESPONDENT CS FIRSTBOSTON CORPORATION THAT THE LETTER OF ACCEPTANCE, WAIVER ANDCONSENT NO. C10960030 WAS ACCEPTED; THEREFORE, THE FIRM ISCENSURED AND FINED $5,000 -(ARTICLE III, SECTION 1 OF THE RULESOF FAIR PRACTICE - RESPONDENT MEMBER ALLOWED INDIVIDUALS TOACTIN THE CAPACITY OF A GENERAL SECURITIES PRINCIPAL WITHOUT BEINGREGISTERED IN THAT CAPACITY).

***$5,000.00 PAID ON 05/31/96, INVOICE #96-10-363***



iReporting Source:







Initiated By: NAT'L ASSOC.OF SEC. DEALERS DISTRICT BUSINESS CONDUCT COMM.


Other






Allegations: THE NASD ALLEGED THAT CS FIRST BOSTON CORPORATION VIOLATEDARTICLE III, SECTION 1 OF THE ASSOCIATION'S RULES OF FAIR PRACTICEIN CONTRAVENTION OF SCHEDULE C, PART II(2)(A)(I) OF THEASSWOCIATION'S BY-LAWA IN THAT CS FIRST BOSTON CORPORATIONPERMITTED TWO OF ITS OFFICERS TO ACT IN THE CAPACITY OF AGENERAL SECURITIES PRINCIPAL PRIOR TO THE TIMELY COMPLETION OFTHE SERIES 24 GENERAL SECURITIES PRINCIPAL EXAM. THE OFFICERSHAVE SINCE QUALIFIED AS GENERAL SECURITIES PRINCIPALS.



Resolution:


Sanction Details: CS FIRST BOSTON CORPORATION AGREED TO A CENSURE AND A $5000.00FINE.


Other


i


Initiated By: CBOE



Allegations: see summary













Resolution:


Sanction Details: fined $10,000

Regulator Statement exceeded the Exchange's position limit in theSPX class of option contracts on one trade date. (CBOE Rules4.11 and 24.4b)


Decision


Initiated By: THE CHICAGO BOARD OPTIONS EXCHANGE (CBOE) BUS. CON. COMM.


Other






Allegations: THE CBOE ISSUED A STATEMENT OF CHARGES ALLEGING THAT ON ONETRADE DATE IN 1994 CSFBC EXCEEDED THE EXCHANGE'S SPX OPTIONPOSITION LIMIT.



Resolution: Consent








Sanction Details: WITHOUT ADMITTING OR DENYING THE CHARGES, THE REGISTRANTCONSENTED TO THE IMPOSITION OF A $10,000.00 FINE.



i









Allegations:



Resolution:


Sanction Details:

Regulator Statement MARKET SURVEILLANCE COMMITTEE COMPLAINT NO. CMS950074 AWC

LETTER OF ACCEPTANCE, WAIVER AND CONSENT FILED ON OCTOBER 6,1995 AGAINST CS FIRST BOSTON CORPORATION (FBCO) ALLEGING AVIOLATION OF ARTICLE III, SECTIONS 1 AND 27 OF THEASSOCIATION'S RULES OF FAIR PRACTICE FOR FAILING TO ENFORCESUPERVISORY PROCEDURES TO PREVENT THE VIOLATIONS ALLEGEDANDSEC RULE 10b-6A IN THAT RESPONDENT FBCO PURCHASED 500 SHARESOFA SECURITY AT 14, WHICH WAS 3/8 POINT ABOVE THE HIGHESTINDEPENDENT BID OF 13 5/8.

AS SANCTIONS, THE COMMITTEE IMPOSED A CENSURE AND A FINE OF$1,000. THE AWC BECAME FINAL ON FEBRUARY 2, 1996.

**$1,000.00 PAID ON 03/12/96, INVOICE # 96-MS-122**








MARKET SURVEILLANCE COMMITTEE COMPLAINT NO. CMS950074 AWC

LETTER OF ACCEPTANCE, WAIVER AND CONSENT FILED ON OCTOBER 6,1995 AGAINST CS FIRST BOSTON CORPORATION (FBCO) ALLEGING AVIOLATION OF ARTICLE III, SECTIONS 1 AND 27 OF THEASSOCIATION'S RULES OF FAIR PRACTICE FOR FAILING TO ENFORCESUPERVISORY PROCEDURES TO PREVENT THE VIOLATIONS ALLEGEDANDSEC RULE 10b-6A IN THAT RESPONDENT FBCO PURCHASED 500 SHARESOFA SECURITY AT 14, WHICH WAS 3/8 POINT ABOVE THE HIGHESTINDEPENDENT BID OF 13 5/8.

AS SANCTIONS, THE COMMITTEE IMPOSED A CENSURE AND A FINE OF$1,000. THE AWC BECAME FINAL ON FEBRUARY 2, 1996.

**$1,000.00 PAID ON 03/12/96, INVOICE # 96-MS-122**




Other






Allegations: THE NASD ALLEGED THAT CSFBC VIOLATED SEC RULE 10B-6A AND FAILEDTO ENFORCE SUPERVISORY PROCEDURES TO PREVENT SUCH AVIOLATION, AS REQUIRED BY ARTICLE III, SECTION 1 AND 27 OF THENASD'S RULES OF FAIR PRACTICE.



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, CSFBC AGREED TOACCEPT A $1000.00 FINE AND A CENSURE IMPOSED BY THE NASD.




i


Allegations: Not Provided







Initiated By: Not Provided









Resolution:


Sanction Details: Not Provided

Regulator Statement **2/22/96**, THE DECISION IS NOW FINAL ANDEFFECTIVE IMMEDIATELY. CONTACT: PEGGY GERMINO 212-656-8450


Consent




Docket/Case Number: NYSE HEARING PANEL DECISION 95-182


Allegations: THE NYSE ALLEGED VIOLATIONS OF EXCHANGE RULE 342(A) AND (B) BYCSFBC IN 1991 AND 1992 BY FAILING TO APPROPRIATELY SUPERVISECERTAIN BUSINESS ACTIVITIES AND CERTAIN EMPLOYEES ENGAGED INTRADING EQUITY SECURITIES FOR INSTITUTIONAL CUSTOMERS ANDPROPRIETARY ACCOUNTS, AND ALSO ALLEGED A VIOLATION OF SECTION17(A) OF THE SECURITIES EXCHANGE ACT AND NYSE RULES BY FAILINGTO PREPARE ON CERTAIN OCCASSIONS RECORDS OF ORDERS ANDFAILING TO RECORD TIMES OF RECEIPT, ENTRY AND EXECUTION.








Other




Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, CSFBCCONSENTED TO A CENSURE, A FINE OF $200,000.00 AND A REQUIREMENTTO COMPLY WITH AN UNDERTAKING TO CAUSE A REVIEW TO BEPERFORMED AND A REPORT PREPARED OF CSFBC'S SYSTEMS ANDPROCEDURES, INCLUDING RECOMMENDATINS FOR ADDITIONAL SYSTEMSAND PROCEDURES, IF NECESSARY, REASONABLY DESIGNED TO ENSURECOMPLIANCE WITH FEDERAL SECURITIES LAWS AND EXCHANGE RULESAND TO PREVENT RECURRENCE OF THE FOREGOING VIOLATIONS.


Decision


i


Initiated By: CBOE







Allegations: see summary



Resolution: Stipulation and Consent








Sanction Details: CS First Boston Corporation was censured andfined a total of $450,000 to be paid jointly to the CBOE andthe NYSE. Further, CS First Boston is required to comply withthe undertaking to retain an outside consultant, notunacceptable to the CBOE and NYSE, to conduct a review andprepare a report of the firm's systems and procedures and makerecommendationns for additional systems and procedures, ifnecessary, reasonably designed to ensure compliance with thefederal securities laws and CBOE rules and to preventrecurrence of the following violations. The firm must submitthe report with respect to such review, recommendations andadoption of recommendations to the CBOE.

Regulator Statement Without admitting or denying any allegations,facts, conclusions or findings, CS First Boston stipulated thatit violated a CBOE rule by failing to provide for, establish,maintain and implement appropriate procedures of supervisionand control, including a separate system of follow-up andreview of the business activities and operations of the firm'sProgram Trading Desk and employees to prevent rule violations,including but not limited to, preventing the inaccurate andincomplete submission of Daily Program Trading REports to theNYSE and detecting and preventing the entry on June 18, 1993 ofMOC purchase orders for more than 34 million shares that werevalued at approximately $1.5 billion and the cancellation ofthese orders when there was no reasonable basis to enter ordersof such magnitude nor any reasonable expectation that suchorders would be executed. The firm further stipulated that itviolated certain federal securities laws and CBOE rules on June18, 1993 with respect to certain option orders on the CBOE. Thefirm failed to prepare or maintain records of orders, failed torecord the time of entry and the time at which execution reportwere received and failed to record modifications to orders.Also, the firm entered and caused to be executed MOC sellorders for S&P 100 (OEX), S&P 500 (SPX) and Major Market Index(XMI) component stocks in which the firm held net shortpositions, where such orders were not marked short and wereexecuted at the close of trading on the NYSE in numerousinstances at prices which were on minus or on zero-minus ticks. (CBOE Rules 4.2, 15.1, and Section 17(a)(1) of the SecuritiesExchange Act of 1934 as amended (the "Act") and Rules 17a-3 and17a-4 thereunder and Section 10(a) of the Act and Rules10a-1(a)(1)(i) and 10a-1(d) thereunder.)







Without admitting or denying any allegations,facts, conclusions or findings, CS First Boston stipulated thatit violated a CBOE rule by failing to provide for, establish,maintain and implement appropriate procedures of supervisionand control, including a separate system of follow-up andreview of the business activities and operations of the firm'sProgram Trading Desk and employees to prevent rule violations,including but not limited to, preventing the inaccurate andincomplete submission of Daily Program Trading REports to theNYSE and detecting and preventing the entry on June 18, 1993 ofMOC purchase orders for more than 34 million shares that werevalued at approximately $1.5 billion and the cancellation ofthese orders when there was no reasonable basis to enter ordersof such magnitude nor any reasonable expectation that suchorders would be executed. The firm further stipulated that itviolated certain federal securities laws and CBOE rules on June18, 1993 with respect to certain option orders on the CBOE. Thefirm failed to prepare or maintain records of orders, failed torecord the time of entry and the time at which execution reportwere received and failed to record modifications to orders.Also, the firm entered and caused to be executed MOC sellorders for S&P 100 (OEX), S&P 500 (SPX) and Major Market Index(XMI) component stocks in which the firm held net shortpositions, where such orders were not marked short and wereexecuted at the close of trading on the NYSE in numerousinstances at prices which were on minus or on zero-minus ticks. (CBOE Rules 4.2, 15.1, and Section 17(a)(1) of the SecuritiesExchange Act of 1934 as amended (the "Act") and Rules 17a-3 and17a-4 thereunder and Section 10(a) of the Act and Rules10a-1(a)(1)(i) and 10a-1(d) thereunder.)


Initiated By: CHICAGO BOARD OF OPTIONS EXCHANGE







Allegations: THE NYSE AND CBOE ALLEGED THAT A FORMER CSFBC TRADER PLACEDAND THEN CANCELED ORDERS TO PURCHASE 34 MILLION SHARES OFNYSE-LISTED STOCKS IN THE S&P 500 STOCK INDEX THROUGH ANELECTRONIC ORDER ENTRY SYSTEM ON JUNE 18,1993 AND THAT THETRADER HAD NO REASONABLE BASIS TO ENTER ORDERS OF THATMAGNITUDE AND NO REASONABLE EXPECTATION THAT SUCH ORDERSWOULD BE EXECUTED.



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS CSFBC AND AFORMER CSFBC TRADER HAVE SETTLED THE CASE. CSFBC CONSENTEDTO THE IMPOSITION OF A JOINT FINE OF $450,000.00 AND A CENSURE FORALLEGEDLY FAILING TO SUPERVISE AND FOR CERTAIN TECHNICAL ANDRECORD KEEPINGVIOLATIONS. CSFBC ALSO ENTERED INTO AN UNDERTAKING TO ALLOW ANOUTSIDE CONSULTANT TO REVIEW ITS SYSTEMS AND PROCEDURES.

Firm Statement THE CBOE ALLEGED THAT CSFBC (1) FAILED TO APPROPRIATELYSUPERVISE A TRADING DESK AND CERTAIN EMPLOYEES, (2) FAILED TOPREPARE AND MAINTAIN RECORDS OF CERTAIN ORDERS, (3) COMMITTEDA TECHNICAL VIOLATION OF THE SHORT SALE RULE, AND (4) SUBMITTEDPROGRAM TRADING REPORTS THAT WERE NOT ACCURATE ORCOMPLETE.








THE CBOE ALLEGED THAT CSFBC (1) FAILED TO APPROPRIATELYSUPERVISE A TRADING DESK AND CERTAIN EMPLOYEES, (2) FAILED TOPREPARE AND MAINTAIN RECORDS OF CERTAIN ORDERS, (3) COMMITTEDA TECHNICAL VIOLATION OF THE SHORT SALE RULE, AND (4) SUBMITTEDPROGRAM TRADING REPORTS THAT WERE NOT ACCURATE ORCOMPLETE.


i






Docket/Case Number: N-VS-27



Allegations:



Resolution:


Sanction Details:

Regulator Statement NASDAQ COMPLAINT N-VS-27 FILED 4-16-74ACCEPTED 4-26-74 - FINE $25.00 PAIDFINAL: 6-6-74


Decision




Allegations: ALLEGED FAILURE TO REPORT DAILY VOLUME IN SEVERAL SECURITIES INWHICH THE FIRM HAD ACTED AS MARKET MAKER.








Other


Docket/Case Number: N-VS-27




Resolution:


Sanction Details: THE FIRST BOSTON CORPORATION (FBC) AGREED TO ACCEPT A $25.00FINE.


Other


i






Docket/Case Number:



Allegations:



Resolution:



Settled






Sanction Details:

Regulator Statement ON JULY 21, 1981, IN SETTLEMENT OF A SUMMARY PROCEEDINGBROUGHTBY THE AMERICAN STOCK EXCHANGE, INC., THE FIRST BOSTONCORPORATION AGREED TO ACCEPT A $1,000 FINE FOR FAILURE TOREPORTON A TIMELY BASIS, ROUTINE REPORTS OF OPTION POSITIONS.






Docket/Case Number: UNKNOWN



Allegations: FAILURE TO REPORT ON A TIMELY BASIS ROUTINE REPORTS OF OPTIONPOSITIONS.



Resolution:


Sanction Details: THE AMEX FINED FBC $1000.00

Firm Statement ON JULY 21, 1981, IN SETTLEMENT OF A SUMMARY PROCEEDINGBROUGHT BY THE AMERICAN STOCK EXCHANGE, INC., THE FIRST BOSTONCORPORATION AGREED TO ACCEPT A $1000.00 FINE FOR FAILURE TOREPORT ON A TIMELY BASIS ROUTINE REPORTS OF OPTION POSITIONS.


Settled


i











Docket/Case Number: CMS930065 AWC (A)



Allegations:



Resolution:


Sanction Details:

Regulator Statement 2/15/94: MARKET SURVEILLANCE COMMITTEE COMPLAINT #CMS930065AWC(A) LETTER OF ACCEPTANCE, WAIVER AND CONSET FILED OCTOBER 20,1993 AGAINST RESPONDENT MEMBER CS FIRST BOSTON CORPORATIONALLEGING VIOLATIONS OF ARTICLE III, SECTION 1 OF THEASSOCIATION'S RULES OF FAIR PRACTICE IN THAT THE RESPONDENTSUPDATED QUOTATIONS IN THE BULLETIN BOARD SYSTEM OUTSIDE THEALLOWABLE TIME FOR UPDATING FOREIGN OR ADR SECURITIES ON THEBULLETIN BOARD.

THE LETTER OF ACCEPTANCE, WAIVER AND CONSENT WAS ACCEPTED BYTHE MARKET SURVEILLANCE COMMITTEE ON DECEMBER 10, 1993 AND BYTHE NATIONAL BUSINESS CONDUCT COMMITTEE ON 2/14/94. $250 FINE*

**$250 PAID ON 3/15/94, INVOICE #94-MS-138.




Allegations: ALLEGING VIOLATIONS OF ARTICLE III, SECTION 1 OF THE ASSOCIATION'SRULES OF FAIR PRACTICE IN THAT THE RESPONDENTS UPDATEDFOREIGN OR ADR SECURITIES ON THE BULLETIN BOARD SYSTEMOUTSIDE THE ALLOWABLE TIME FOR UPDATING FOREIGN OR ADRSECURITIES ON THE BULLETIN BOARD.









Other






Allegations: ALLEGING VIOLATIONS OF ARTICLE III, SECTION 1 OF THE ASSOCIATION'SRULES OF FAIR PRACTICE IN THAT THE RESPONDENTS UPDATEDFOREIGN OR ADR SECURITIES ON THE BULLETIN BOARD SYSTEMOUTSIDE THE ALLOWABLE TIME FOR UPDATING FOREIGN OR ADRSECURITIES ON THE BULLETIN BOARD.


Resolution:


Sanction Details: $250 FINE PAID ON 3/15/94.

Firm Statement MARKET SURVEILLANCE COMMITTEE COMPLAINT #CMS930065 AWC (A)LETTER OF ACCEPTANCE, WAIVER AND CONSENT FILED OCTOBER 20,1993 AGAINST RESPONDENT MEMBER CS FIRST BOSTON CORPORATIONALLEGING VIOLATIONS OF ARTICLE III, SECTION 1 OF THE ASSOCIATION'SRULES OF FAIR PRACTICE IN THAT THE RESPONDENTS UPDATEDFOREIGN OR ADR SECURITIES ON THE BULLETIN BOARD SYSTEMOUTSIDE THE ALLOWABLE TIME FOR UPDATING FOREIGN OR ADRSECURITIES ON THE BULLETIN BOARD. THE LETTER OF ACCEPTANCE,WAIVER AND CONSENT WAS ACCEPTED BY THE MARKET SURVEILLANCECOMMITTE ON DECEMBER 10, 1993 AND BY THE NATIONAL BUSINESSCONDUCT COMMITTEE ON 2/14/94. $250 FINE PAID ON 3/15/94.




i



Allegations:











Docket/Case Number: MS-280-AWC




Resolution:


Sanction Details:

Regulator Statement 8/19/86: MARKET SURVEILLANCE COMMITTEE COMPLAINT #MS-280-AWC:LETTER OF ACCEPTANCE, WAIVER AND CONSENT ISSUED ON 4/18/86,ALLEGING VIOLATIONS OF PART I, SECTION C.3.(c) OF SCHEDULE D OFTHE ASSOCIATION'S BY-LAWS IN THAT RESPONDENT FAILED TO REPORTITS NASDAQ VOLUME IN TWO SECURITIES ON 12/26/85. THE AWC WASACCEPTED BY THE MARKET SURVEILLANCE COMMITTEE ON 6/18/86 ANDBYTHE NATIONAL BUSINESS CNDUCT COMITTEE ON 8/5/86. FINE $500.






Other





Allegations: FAILURE TO REPORT DAILY VOLUME IN SEVERAL SECURITIES IN WHICH ITHAD ACTED AS MARKET MAKER.








Other



Resolution:


Sanction Details: THE FIRST BOSTON CORPORATION AGREED TO ACCEPT A $500.00 FINE.


Other


i









Allegations:



Resolution:


Sanction Details:

Regulator Statement MS-220-AWC: LETTER OF ACCEPTANCE, WAIVER AND CONSENT ISSUEDONJANAUARY 27, 1986, ALLEGING VIOLATIONS OF PART I, SECTIONC.3.(c) OF SCHEDULE D OF THE ASSOCIATION'S BY-LAWS IN THATRESPONDENT FAILED TO REPORT ITS NASDAQ VOLUME ON OCTOBER 28ANDNOVEMBER 27, 1985. THE AWC WAS ACCEPTED BY THE MARKETSURVEILLANCE COMMITTEE ON FEBRUARY 25 AND BY THE NATIONALBUSINESS CONDUCT COMMITTEE ON APRIL 1, 1986. AMOUNT OF FINE:$500 ***5/5/86, NFC# 49, PAID IN FULL.







www.finra.org/brokercheck User GuidanceMS-220-AWC: LETTER OF ACCEPTANCE, WAIVER AND CONSENT ISSUEDONJANAUARY 27, 1986, ALLEGING VIOLATIONS OF PART I, SECTIONC.3.(c) OF SCHEDULE D OF THE ASSOCIATION'S BY-LAWS IN THATRESPONDENT FAILED TO REPORT ITS NASDAQ VOLUME ON OCTOBER 28ANDNOVEMBER 27, 1985. THE AWC WAS ACCEPTED BY THE MARKETSURVEILLANCE COMMITTEE ON FEBRUARY 25 AND BY THE NATIONALBUSINESS CONDUCT COMMITTEE ON APRIL 1, 1986. AMOUNT OF FINE:$500 ***5/5/86, NFC# 49, PAID IN FULL.




Other






Allegations: ALLEGED THAT FBC FAILED TO REPORT DAILY VOLUME IN SEVERALSECURITIES IN WHICH IT HAD ACTED AS MARKET MAKER.



Resolution:


Sanction Details: FIRST BOSTON CORPORATION (FBC0 AGREED TO ACCEPT A $500.00 FINEIMPOSED BY THE NASD.




i


Initiated By: CHICAGO BOARD OF TRADE


Allegations:










Docket/Case Number:




Resolution:


Sanction Details:

Regulator Statement THE FIRST BOSTON CORPORATION AGREED TO ACCEPT A CEASE ANDDESISTORDER ISSUED BY THE BOARD OF TRADE OF THE CITY OF CHICAGO,EFFECTIVE JANUARY 31, 1983 PERTAINING TO OFFSETTING GROSSPOSITIONS IN FINANCIAL INSTRUMENTS FUTURES CONTRACTS.


Consent


Initiated By: THE BOARD OF TRADE OF THE CITY OF CHICAGO (CBOT)


Other



Docket/Case Number: 82-INV-85



Allegations: THE CBOT ALLEGED THAT FBC OFFSET GROSS POSITIONS IN FINANCIALINSTRUMENT FUTURES CONTRACTS OTHER THAN THROUGH TRADES INTHE PIT AFTER THREE DAYS, IN VIOLATION OF THE CBOT REGULATION705.02.









Resolution:


Sanction Details: THE FIRST BOSTON CORPORATION (FBC) AGREED TO ACCEPT AN ORDERISSUED BY THE CBOT TO CEASE AND DESIST FROM FURTHER VIOLATIONSOF THE CBOT REGULATION 705.02


Order


i


Initiated By: NYSE DIVISION OF ENFORCEMENT










Resolution:


Sanction Details: Not Provided

Regulator Statement THE DECISION IS NOW FINAL AND EFFECTIVE AS OFAUGUST 15, 1995. CONTACT: PEGGY GERMINO (212) 656-8450


Consent







Initiated By: NEW YORK STOCK EXCHANGE AND THE CHICAGO BOARD OPTIONSEXCHANGE


Other



Docket/Case Number: NYSE EHPD 95-98 & CBOE 95-0022



Allegations: THE NYSE AND CBOE ALLEGED THAT A FORMER CSFBC TRADER PLACEDAND THEN CANCELED ORDERS TO PURCHASE 34 MILLION SHARES OFNYSE-LISTED STOCKS IN THE S&P 500 STOCK INDEX THROUGH ANELECTRONIC ORDER ENTRY SYSTEM ON JUNE 18, 1993 AND THAT THETRADER HAD NO REASONABLE BASIS TO ENTER ORDERS OF THATMAGNITUDE AND NO REASONABLE EXPECTATION THAT SUCH ORDERSWOULD BE EXECUTED.



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS CSFBC AND AFORMER CSFBC TRADER HAVE SETTLED THE CASE. CSFBC CONSENTEDTO THE IMPOSITION OF A JOINT FINE OF $450,000.00 AND A CENSURE FORALLEGEDLY FAILING TO SUPERVISE AND FOR CERTAIN TECHNICAL ANDRECORD KEEPING VIOLATIONS. CSFBC ALSO ENTERED INTO ANUNDERTAKING TO ALLOW AN OUTSIDE CONSULTANT TO REVIEW ITSSYSTEMS AND PROCEDURES.

Firm Statement THE EXCHANGES ALLEGED THAT CSFBC (1) FAILED TO APPROPRIATELYSUPERVISE A TRADING DESK AND CERTAIN EMPLOYEES, (2) FAILED TOPREPARE AND MAINTAIN RECORDS OF CERTAIN ORDERS, (3) COMMITTEDA TECHNICAL VIOLATION OF THE SHORT SALE RULE, AND (4) SUBMITTEDPROGRAM TRADING REPORTS THAT WERE NOT ACCURATE ORCOMPLETE.


Consent





www.finra.org/brokercheck User GuidanceTHE EXCHANGES ALLEGED THAT CSFBC (1) FAILED TO APPROPRIATELYSUPERVISE A TRADING DESK AND CERTAIN EMPLOYEES, (2) FAILED TOPREPARE AND MAINTAIN RECORDS OF CERTAIN ORDERS, (3) COMMITTEDA TECHNICAL VIOLATION OF THE SHORT SALE RULE, AND (4) SUBMITTEDPROGRAM TRADING REPORTS THAT WERE NOT ACCURATE ORCOMPLETE.


i






Docket/Case Number: CMS950005 AWC



Allegations:



Resolution:


Sanction Details:

Regulator Statement MARKET SURVEILLANCE COMMITTEE COMPLAINT NO. CMS950005 AWC

LETTER OF ACCEPTANCE, WAIVER AND CONSENT (AWC) FILED FEBRUARY24, 1995 AGAINST RESPONDENT CS FIRST BOSTON CORPORATION (FBCO)ALLEGING VIOLATIONS OF RULE 10b-6A OF THE SECURITIES EXCHANGEACT OF 1934 WITH REGARD TO PASSIVE MARKET MAKING IN THATRESPONDENT FBCO PURCHASED SHARES AT 1/8 POINT ABOVE THEPREVAILING HIGHEST INDEPENDENT MARKET MAKER BID AND EXECUTEDPURCHASES TOTALING ITS SOES MANDATORY EXPOSURE LIMIT, AND DIDNOT DECREASE ITS BID IN A TIMELY MANNER. FBCO IS ALSO INVIOLATION OF ARTICLE III, SECTIONS 1 AND 27 OF THEASSOCIATION'S RULES OF FAIR PRACTICE FOR FAILING TO ENFORCESUPERVISORY PROCEDURES TO PREVENT THE VIOLATIONS.

THE AWC WAS ACCEPTED BY THE NATIONAL BUSINESS CONDUCTCOMMITTEEON AUGUST 15, 1995. RESPONDENT FBCO WAS CENSURED AND FINED$1,000. THE AWC BECAME FINAL ON AUGUST 15, 1995.

**$1,000.00 PAID ON 9/20/95, INVOICE # 95-MS.498**








MARKET SURVEILLANCE COMMITTEE COMPLAINT NO. CMS950005 AWC

LETTER OF ACCEPTANCE, WAIVER AND CONSENT (AWC) FILED FEBRUARY24, 1995 AGAINST RESPONDENT CS FIRST BOSTON CORPORATION (FBCO)ALLEGING VIOLATIONS OF RULE 10b-6A OF THE SECURITIES EXCHANGEACT OF 1934 WITH REGARD TO PASSIVE MARKET MAKING IN THATRESPONDENT FBCO PURCHASED SHARES AT 1/8 POINT ABOVE THEPREVAILING HIGHEST INDEPENDENT MARKET MAKER BID AND EXECUTEDPURCHASES TOTALING ITS SOES MANDATORY EXPOSURE LIMIT, AND DIDNOT DECREASE ITS BID IN A TIMELY MANNER. FBCO IS ALSO INVIOLATION OF ARTICLE III, SECTIONS 1 AND 27 OF THEASSOCIATION'S RULES OF FAIR PRACTICE FOR FAILING TO ENFORCESUPERVISORY PROCEDURES TO PREVENT THE VIOLATIONS.

THE AWC WAS ACCEPTED BY THE NATIONAL BUSINESS CONDUCTCOMMITTEEON AUGUST 15, 1995. RESPONDENT FBCO WAS CENSURED AND FINED$1,000. THE AWC BECAME FINAL ON AUGUST 15, 1995.

**$1,000.00 PAID ON 9/20/95, INVOICE # 95-MS.498**


Initiated By: NATINAL ASSOCIATION OF SECURITIES DEALERS, INC. (NASD)


Other






Allegations: THAT ON JULY 12, 1994 AND OCTOBER 5, 1994 CSFBC AS A PASSIVEMARKET MAKER IN TWO SECURITIES, PURCHAESD SHARES AT PRICESABOVE THE HIGHEST INDEPENDENT MARKET MAKER BID IN VIOLATION OFSEC RULE 10B-6A.



Resolution:


Sanction Details: THE NASD MARKET SURVEILLANCE COMMITTEE ACCEPTED CSFBC'SLETTER OF ACCEPTANCE, WAIVER AND CONSENT PURSUANT TO WHICHTHE APPLICANT PAID A $1000.00 FINE.




i


Allegations:











Docket/Case Number: CMS940094 AWC



Allegations:


Resolution:


Sanction Details:

Regulator Statement MARKET SURVEILLANCE COMMITTEE COMPLAINT #CMS940094 AWC.

LETTER OF ACCEPTANCE, WAVIER, AND CONSENT (AWC) ALLEGEVIOLATIONS OF PART V, SECTION 2(b) OF SCHEDULE D TO THEASSOCIATION'S RULES OF FIAR PRACTICE AND RULE 11Ac1-1(c) OF THESECURITIES EXCHANGE ACT OF 1934 IN THAT THE RESPONDENTS FAILEDTO HONOR THE QUOTATIONS THEY DISSEMINATED THROUGH THENASDAQSYSTEM (BACKING AWAY). THE COMPLAINT WAS FILED ON SEPTEMBER27,1994 AND ACCEPTED BY THE NBCC ON MARCH 31, 1995. RESPONDENTMEMBER WAS FINED $500.***************************************************************$500.00 PAID ON 5/4/95 INVOICE NO. 95-MS-257***




Allegations: THE NASD ALLEGED A VIOLATION ON PART V, SECTION 2(B) OF SCHEDULED TO THE ASSOCIATION'S RULES OF FAIR PRACTICE AND RULE 11AC1-1(C)OF THE SECURITIES AND EXCHANGE ACT 0F 1934, IN THAT CASE CSFBCFAILED TO HONOR CERTAIN QUATATIONS IF DISSEMINATED THROUGH THENASDAQ SYSTEM.









Other






THE NASD ALLEGED A VIOLATION ON PART V, SECTION 2(B) OF SCHEDULED TO THE ASSOCIATION'S RULES OF FAIR PRACTICE AND RULE 11AC1-1(C)OF THE SECURITIES AND EXCHANGE ACT 0F 1934, IN THAT CASE CSFBCFAILED TO HONOR CERTAIN QUATATIONS IF DISSEMINATED THROUGH THENASDAQ SYSTEM.


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, CSFBC AGREED TOACCEPT A $500.00 FINE.




i






Docket/Case Number:



Allegations:


Resolution: Settled561©2020 FINRA. All rights reserved. Report about CREDIT SUISSE SECURITIES (USA) LLC






Resolution:


Sanction Details:

Regulator Statement AMERICAN STOCK EXCHANGE WEEKLY BULLETIN, MAY 24, 1985 (REC'D5/31/85); THE FIRST BOSTON CORPORATION WAS CENSURED AND FINED$5,000 FOR ENGAGING IN CONDUCT INCONSISTENT WITH JUST ANDEQUITABLE PRINCIPLES OF TRADE, IN VIOLATION OF ARTICLE V,SECTION 4(h) OF THE EXCHANGE CONSTITUTION, IN THAT ITENGAGED IN THE IMPROPER USE OF THE OCC POSITION ADJUSTMENTPROCESS IN EXCHANGE LISTED OPTIONS FOR ITS PROPRIETARYACCOUNT. FIRST BOSTON SETTLED THE CHARGE WITHOUT ADMITTINGOR DENYING THE EXCHANGE'S ALLEGATIONS.


Settled


Initiated By: AMERICAN STOCK EXCHANGE (AMEX)


Other



Docket/Case Number: DECISION 84-D-12



Allegations: THE AMEX ALLEGED THAT FBC ENGAGED IN CONDUCT INCONSISTENTWITH JUST AND EQUITABLE PRINCIPLES OF TRADE, IN THAT FBCENGAGED IN THE IMPROPER USE OF THE POSITION ADJUSTMENTPROCESS IN AMEX-LISTED OPTIONS FOR ITS PROPRIETARY ACCOUNT INJANUARY 1982.



Resolution:


Other







Sanction Details: WITHOUT ADMITTING OR DENYING GUILT, FBC AGREED TO ACCEPT A$5000.00 FINE AND CENSURE IMPOSED BY THE AMEX.



i









Allegations:



Resolution:


Sanction Details:

Regulator Statement MARKET SURVEILLANCE COMMITTEE COMPLAINT #MS-921-AWC (A):LETTEROF ACCEPTANCE, WAIVER AND CONSENT FILED JUNE 1, 1990 AGAINSTRESPONDENT MEMBER THE FIRST BOSTON CORPORATION ALLEGINGVIOLATIONS OF PART VI, SECTION 5(a) OF SCHEDULE D IN THATRESPONDENTS FAILED TO REPORT THEIR NASDAQ VOLUME.

THE LETTER OF ACCEPTANCE, WAIVER AND CONSENT WAS ACCEPTED BYTHE MARKET SURVEILLANCE COMMITTEE ON AUGUST 20, 1990 AND BYTHENATIONAL BUSINESS CONDUCT COMMITTEE ON OCTOBER 15, 1990.$3,000.00 FINE. ***$3,000.00 PAID ON 11/30/90 INVOICE #90-MS-1236***








MARKET SURVEILLANCE COMMITTEE COMPLAINT #MS-921-AWC (A):LETTEROF ACCEPTANCE, WAIVER AND CONSENT FILED JUNE 1, 1990 AGAINSTRESPONDENT MEMBER THE FIRST BOSTON CORPORATION ALLEGINGVIOLATIONS OF PART VI, SECTION 5(a) OF SCHEDULE D IN THATRESPONDENTS FAILED TO REPORT THEIR NASDAQ VOLUME.

THE LETTER OF ACCEPTANCE, WAIVER AND CONSENT WAS ACCEPTED BYTHE MARKET SURVEILLANCE COMMITTEE ON AUGUST 20, 1990 AND BYTHENATIONAL BUSINESS CONDUCT COMMITTEE ON OCTOBER 15, 1990.$3,000.00 FINE. ***$3,000.00 PAID ON 11/30/90 INVOICE #90-MS-1236***


Initiated By: MARKET SURVEILLANCE COMMITTEE OF THE NASD


Other






Allegations: ALLEGED FAILURE TO REPORT VOLUME IN CERTAIN NASDAQ SECURITIESFOR WHICH THE FIRM WAS REGISTERED AS A MARKET MAKER.



Resolution:


Sanction Details: THE MARKET SURVEILLANCE COMMITTEE OF THE NASD ACCEPTED FBC'SOFFER TO SETTLE THE COMPLAINT FBC CONSENTED TO THE IMPOSITIONOF A $3000.00 FINE.


Consent


i




Docket/Case Number:


Allegations:












Resolution:


Sanction Details:

Regulator Statement ^6/25/90^ SEC LITIGATION, ACTIONS AND PROCEEDINGS BULLETIN FORTHE QUARTER ENDING 6/30/89 (VOLUME 55, BULLETIN 02, PAGE 255)DISCLOSES: THE NEW YORK STOCK EXCHANGE FINED THE FIRSTBOSTONCORPORATION $1,000 ON FEBRUARY 16, 1989 BASED ON A VIOLATION OFEXCHANGE RULE 132.30 AND FAILING TO SUBMIT AUDIT TRAIL DATA INORDER TO QUALIFIED CLEARING AGENCY REGARDING STOCKTRANSACTIONSFOR THE WEEK OF 10/17/88.


Decision




Other


RELIEF SOUGHT


Docket/Case Number: UNKNOWN



Allegations: VIOLATION OF EXCHANGE RULE 132.30 AND FAILING TO SUBMIT AUDITTRAIL DATA IN ORDER TO QUALIFIED CLEARING AGENCY REGARDINGSTOCK TRANSACTIONS.








RELIEF SOUGHT


Resolution:


Sanction Details: THE NEW YORK STOCK EXCHANGE FINED THE FIRST BOSTONCORPORATION $1000.00

Firm Statement THE NEW YORK STOCK EXCHANGE FINED THE FIRST BOSTONCORPORATION $1000.00 ON FEBRUARY 16, 1989 BASED ON A VIOLATIONOF EXCHANGE RULE 132.30 AND FAILING TO SUBMIT AUDIT TRAIL DATA INORDER TO QUALIFIED CLEARING AGENCY REGARDING STOCKTRANSACTIONS FOR THE WEEK OF 10/17/1988.


Decision


i









Allegations:



Resolution:


Sanction Details:

Regulator Statement MARKET SURVEILLANCE COMMITTEE COMPLAINT #MS-862-AWC:

LETTER OF ACCEPTANCE, WAVIER AND CONSENT FILED DECEMBER 6,1989AGAINST RESPONDENT THE FIRST BOSTON CORPORATION ALLEGINGVIOLATIONS OF PART VI, SECTION 4(a) OF SCHEDULE D IN THATRESPONDENTS FAILED TO REPORT THEIR NASDAQ VOLUME.

THE LETTER OF ACCEPTANCE, WAIVER AND CONSENT WAS ACCEPTED BYTHEMARKET SURVEILLANCE COMMITTEE ON JANUARY 17, 1990 AND BY THENATIONAL BUSINESS CONDUCT COMMITTEE ON FEBRUARY 14, 1990.$1,500FINE. ***$1,500.00 PAID ON 4/23/90 INVOICE #90-MS-270***









LETTER OF ACCEPTANCE, WAVIER AND CONSENT FILED DECEMBER 6,1989AGAINST RESPONDENT THE FIRST BOSTON CORPORATION ALLEGINGVIOLATIONS OF PART VI, SECTION 4(a) OF SCHEDULE D IN THATRESPONDENTS FAILED TO REPORT THEIR NASDAQ VOLUME.

THE LETTER OF ACCEPTANCE, WAIVER AND CONSENT WAS ACCEPTED BYTHEMARKET SURVEILLANCE COMMITTEE ON JANUARY 17, 1990 AND BY THENATIONAL BUSINESS CONDUCT COMMITTEE ON FEBRUARY 14, 1990.$1,500FINE. ***$1,500.00 PAID ON 4/23/90 INVOICE #90-MS-270***




Other






Allegations: ALLEGED FAILURE TO REPORT DAILY VOLUME IN SEVERAL SECURITIES INWHICH FBC HAD ACTED AS A MARKET MAKER.



Resolution:


Sanction Details: THE FIRST BOSTON CORPORATION AGREED TO ACCEPT A $1,500.00 FINEIMPOSED BY THE NASD.


Other







i






Docket/Case Number: NA



Allegations: THE FIRST BOSTON CORPORATION, A MEMBER ORGANIZATION, VIOLATEDEXCHANGE RULE 342(B) IN THAT IT FAILED TO PROVIDE FORAPPROPRIATE SUPERVISORY CONTROL TO ASSURE THAT MATERIAL NON-PUBLIC INFORMATION WAS NOT IMPROPERLY DISSEMINATED WITHIN THEFIRM AND ALSO VIOLATED EXCHANGE RULE 342(B) IN THAT IT FAILED TOESTABLISH AN ADEQUATE SEPARATE SYSTEM OF FOLLOW-UP ANDREVIEW TO ASSURE THAT ITS CHINESE WALL AND QUIET RESTRICTEDLIST PROCEDURES WERE BEING COMPLIED WITH.



Resolution:


Sanction Details: CONSENT TO A CENSURE AND A $60,000.00 FINE.


Consent



Allegations: ALLEGED FAILURE TO SUPERVISE IN CONNECTION WITH THE SAMETRADING THAT WAS THE SUBJECT OF THE SECURITIES AND EXCHANGECOMMISSION VS. THE FIRST BOSTON CORPORATION









Other



Docket/Case Number: HEARING PANEL DECISION 89-50




Resolution:


Sanction Details: THE NEW YORK STOCK EXCHANGE, INC. IMPOSED A $60,000.00 FINE ANDCENSURE, TO WHICH FBC HAD CONSENTED WITHOUT ADMITTING ORDENYING GUILT.




i









Allegations:










Sanction Details:


LETTER OF ACCEPTANCE, WAIVER AND CONSENT FILED SEPTEMBER 26,1988 AGAINST RESPONDENT THE FIRST BOSTON CORPORATIONALLEGINGVIOLATIONS OF PART VI, SECTION 4(a) OF SCHEDULE D IN THAT THERESPONDENT FAILED TO REPORT ITS NASDAQ VOLUME.

THE LETTER OF ACCEPTANCE, WAIVER AND CONSENT WAS ACCEPTED BYTHE MARKET SURVEILLANCE COMMITTEE ON NOVEMBER 29, 1988 AND BYTHE NATIONAL BUSINESS CONDUCT COMMITTEE ON JANUARY 5, 1989.$500 FINE

$500 FINE PAID 1/31/89





Other



Docket/Case Number: MS-760 AWC



Allegations: ALLEGED THAT FBC FAILED TO REPORT DAILY VOLUME IN SEVERALSECURITIES IN WHICH IT HAD ACTED AS A MARKET MAKER.



Resolution:









Sanction Details: FBC AGREED TO PAY A $500.00 FINE IMPOSED BY THE NASD.



i









Allegations:



Resolution:


Sanction Details:

Regulator Statement MARKET SURVEILLANCE COMMITTEE COMPLAINT #MS-723-AWC.

LETTER OF ACCEPTANCE, WAIVER AND CONSENT FILED JULY 8, 1988AGAINST RESPONDENT THE FIRST BOSTON CORPORATION ALLEGINGVIOLATIONS OF PART VI, SECTION 2(d) OF SCHEDULE D FOR ENTERINGNASDAQ QUOTATIONS CONTAINING EXCESS SPREADS.

THE LETTER OF ACCEPTANCE, WAIVER AND CONSENT WAS ACCEPTED BYTHE MARKET SURVEILLANCE COMMITTEE ON SEPTEMBER 2, 1988 AND BYTHE NATIONAL BUSINESS CONDUCT COMMITTEE ON OCTOBER 3, 1988.$500 FINE

$500 FINE PAID 8/24/88








MARKET SURVEILLANCE COMMITTEE COMPLAINT #MS-723-AWC.

LETTER OF ACCEPTANCE, WAIVER AND CONSENT FILED JULY 8, 1988AGAINST RESPONDENT THE FIRST BOSTON CORPORATION ALLEGINGVIOLATIONS OF PART VI, SECTION 2(d) OF SCHEDULE D FOR ENTERINGNASDAQ QUOTATIONS CONTAINING EXCESS SPREADS.

THE LETTER OF ACCEPTANCE, WAIVER AND CONSENT WAS ACCEPTED BYTHE MARKET SURVEILLANCE COMMITTEE ON SEPTEMBER 2, 1988 AND BYTHE NATIONAL BUSINESS CONDUCT COMMITTEE ON OCTOBER 3, 1988.$500 FINE

$500 FINE PAID 8/24/88




Other






Allegations: ALLEGED THAT FBC ENTERED QUOTATIONS ON THE NASDAQ SYSTEM INEXCESS OF THE MAXIMUM ALLOWABLE SPREAD.



Resolution:


Sanction Details: FBC AGREED TO ACCEPT A $500.00 FINE IMPOSED BY THE NASD.


Other


i





Docket/Case Number: MS-581



Allegations: VIOLATIONS OF ARTICLE III, SECTION 1 AND SCHEDULE D.










Resolution:

Other Sanctions Ordered: REQUIRED TO SUBMIT QUARTERLY REPORTS DENOTING ITS COMPLIANCEOR DISCLOSING ITS NON-COMPLIANCE WITH THE TRADE REPORTINGREQUIREMENTS OF SCHEDULE D.

Sanction Details: $150,000 FINE PAID 2/15/89

Regulator Statement [TOP] MARKET SURVEILLANCE COMMITTEE COMPLAINT #MS-581, FILEDJULY 7/17/87 NAMING AS RESPONDENTS THE FIRST BOSTONCORPORATION (FBCO), ET AL. FBCO IS CHARGED WITH VIOLATIONS OFARTICLE III, SECTION 1 AND SCHEDULE D, FOR FAILING TO REPORT,AND/OR IMPROPERLY REPORTING NUMEROUS REPORTABLE NMSTRANSACTIONS EXECUTED BY THE INDIVIDUAL RESPONDENTS. THEALLEGED NMS TRADE REPORTING DISCREPANCIES OCCURRED ONRANDOMLY SELECTED DAYS COVERING TWO PERIODS - 6/25/85THROUGH 7/26/85 AND 1/2/87 THROUGH 1/23/87 AND WERE DIVIDED INTOFOUR CATEGORIES: 1) REPORTABLE TRADES THAT WERE NOTREPORTED; 2) TRADES REPORTED LATE; 3) IMPROPER BUNCHINGAND/OR NOT DESIGNATING BUNCHED REPORTS (.B); AND 4) "OTHER". FIRST CAUSE: FBCO, AIDED AND ABETTED BY SAUNDERS-463, THIEL-334,HECHT-191,3 IMPARATO-177, GRAZIOSO-83, SHEA-88 NMS TRADEREPORTING VIOLATIONS; CHARGES FBCO WITH 72 VIOLATIONS SIMILARTO THE ABOVE EXCEPT THAT THE REPORTABLE TRANSACTIONS WEREEXECUTED BY EMPLOYEES OTHER THAN THOSE NAMED IN THECOMPLAINT AND FAILED REASONABLY TO SUPERVISERESPONDENT RAPHALIAN. THE RESPONDENTS SUBMITTED AN OFFER OFSETTLEMENT ON DECEMBER 12/8/87 WHICH WAS ACCEPTED BY THE MSCON 11/24/87 AND BY THE NATIONAL BUSINESS CONDUCT COMMITTEE ON3/2/88.IT WAS THE DECISION OF THE COMMITTEE THAT THE OFFERS BEACCEPTED FBCO IS FOUND TO HAVE VIOLATED ARTICLE III,ANDSCHEDULE D OF THE ASSOCIATION'S BY-LAWS AS ALLEGED FBCO ISCENSURED AND FINED $150,000.00 IN ADDITION, FBCO IS REQUIRED TOSUBMIT QUARTERLY REPORTS DENOTING ITS COMPLIANCE ORDISCLOSING ITS NON-COMPLIANCE WITH THE TRADE REPORTINGREQUIREMENTS OF SCHEDULE D ALSO, FBCO WILL UNDERTAKEPROCEDURES TO INSURE THAT RAPHALIAN COMPLIES WITH THESPECIFIC DUTIES AND RESPONSIBILITIES DETAILED IN THEIR OFFER OFSETTLEMENT INCLUDING THE DESIGNATION OF A SENIOR OFFICER TOSUPERVISE HIM AND OTHER ASSOCIATED PERSONS IN TRADING AND THETRADE REPORTING AREAS.$150,000 FINE PAID 2/15/89








[TOP] MARKET SURVEILLANCE COMMITTEE COMPLAINT #MS-581, FILEDJULY 7/17/87 NAMING AS RESPONDENTS THE FIRST BOSTONCORPORATION (FBCO), ET AL. FBCO IS CHARGED WITH VIOLATIONS OFARTICLE III, SECTION 1 AND SCHEDULE D, FOR FAILING TO REPORT,AND/OR IMPROPERLY REPORTING NUMEROUS REPORTABLE NMSTRANSACTIONS EXECUTED BY THE INDIVIDUAL RESPONDENTS. THEALLEGED NMS TRADE REPORTING DISCREPANCIES OCCURRED ONRANDOMLY SELECTED DAYS COVERING TWO PERIODS - 6/25/85THROUGH 7/26/85 AND 1/2/87 THROUGH 1/23/87 AND WERE DIVIDED INTOFOUR CATEGORIES: 1) REPORTABLE TRADES THAT WERE NOTREPORTED; 2) TRADES REPORTED LATE; 3) IMPROPER BUNCHINGAND/OR NOT DESIGNATING BUNCHED REPORTS (.B); AND 4) "OTHER". FIRST CAUSE: FBCO, AIDED AND ABETTED BY SAUNDERS-463, THIEL-334,HECHT-191,3 IMPARATO-177, GRAZIOSO-83, SHEA-88 NMS TRADEREPORTING VIOLATIONS; CHARGES FBCO WITH 72 VIOLATIONS SIMILARTO THE ABOVE EXCEPT THAT THE REPORTABLE TRANSACTIONS WEREEXECUTED BY EMPLOYEES OTHER THAN THOSE NAMED IN THECOMPLAINT AND FAILED REASONABLY TO SUPERVISERESPONDENT RAPHALIAN. THE RESPONDENTS SUBMITTED AN OFFER OFSETTLEMENT ON DECEMBER 12/8/87 WHICH WAS ACCEPTED BY THE MSCON 11/24/87 AND BY THE NATIONAL BUSINESS CONDUCT COMMITTEE ON3/2/88.IT WAS THE DECISION OF THE COMMITTEE THAT THE OFFERS BEACCEPTED FBCO IS FOUND TO HAVE VIOLATED ARTICLE III,ANDSCHEDULE D OF THE ASSOCIATION'S BY-LAWS AS ALLEGED FBCO ISCENSURED AND FINED $150,000.00 IN ADDITION, FBCO IS REQUIRED TOSUBMIT QUARTERLY REPORTS DENOTING ITS COMPLIANCE ORDISCLOSING ITS NON-COMPLIANCE WITH THE TRADE REPORTINGREQUIREMENTS OF SCHEDULE D ALSO, FBCO WILL UNDERTAKEPROCEDURES TO INSURE THAT RAPHALIAN COMPLIES WITH THESPECIFIC DUTIES AND RESPONSIBILITIES DETAILED IN THEIR OFFER OFSETTLEMENT INCLUDING THE DESIGNATION OF A SENIOR OFFICER TOSUPERVISE HIM AND OTHER ASSOCIATED PERSONS IN TRADING AND THETRADE REPORTING AREAS.$150,000 FINE PAID 2/15/89




Censure






Allegations: NONE LISTED



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, FBC CONSENTEDTO THE IMPOSITION OF A CENSURE AND $150,000.00 FINE AND AGREED TOADOPT NEW SUPERVISORY PROCEDURES RELATING TO ITS OTCDEPARTMENT. THE MANAGER OF FBC'S OTC DEPARTMENT WASCENSURED, FINED $50,000.00 AND SUSPENDED FROM CARRYING OUTSUPERVISORY RESPONSIBILITIES RELATING TO OTC SECURITIES FOR APERIOD OF THREE YEARS.


Other


i














Allegations:



Resolution:


Sanction Details:

Regulator Statement 9/24/86: MARKET SURVEILLANCE COMMITTEE COMPLAINT #MS-332-AWC:

LETTER OF ACCEPTANCE, WAIVER AND CONSENT (AWC) WAS FILED ON6/11/86, ALLEGING VIOLATIONS OF PART I, SECTION C.3.(c) OFSCHEDULE D OF THE ASSOCIATION'S BY-LAWS IN THAT RESPONDENT(THEFIRST BOSTON CORPORATION) FAILED TO REPORT ITS NASDAQ VOLUMEINTHIRTEEN SECURITIES ON 2/19/86, ONE SECURITY ON 3/14/86, ANDONE SECURITY ON 3/25/86. THE AWC WAS ACCEPTED BY THE MARKETSURVEILLANCE COMMITTEE ON 8/6/86 AND BY THE NBCC ON 9/10/86.

11/18/86: $1,000 FINE PAID 7/16/86













Other



Docket/Case Number: MS-332.AWC





Resolution:


Sanction Details: THE FIRST BOSTON CORPORATION (FBC) AGRED TO ACCEPT A $1000.00FINE IMPOSED BY THE NASD.








Civil - Final

This type of disclosure event involves (1) an injunction issued by a foreign or domestic court within the last 10 years inconnection with investment-related activity, (2) a finding by a court of a violation of any investment-related statute orregulation, or (3) an action dismissed by a court pursuant to a settlement agreement.

Disclosure 1 of 4


Initiated By: ATTORNEY GENERAL OF THE STATE OF NEW YORK

Relief Sought: Civil Penalty(ies)/Fine(s)

Other Relief Sought:

Date Court Action Filed: 11/20/2012


Other Product Types: RMBS

Court Details: NEW YORK SUPERIOR COURT, NEW YORK COUNTY, NEW YORK;451802/2012

THE NYAG ALLEGED THAT CREDIT SUISSE MADE MATERIALMISREPRESENTATIONS AND OMISSIONS REGARDING ITS DUE DILIGENCEPRACTICES IN OFFERING DOCUMENTS FOR RMBS FROM 2006-2007 INVIOLATION OF NEW YORK GENERAL BUSINESS LAW, ARTICLE 23-A, ANDNEW YORK EXECUTIVE LAW § 63(12).

Allegations:


Resolution: Other


Other Sanctions:

Sanction Details: $10,000,000.00 ($8,123,500.00 TO THE STATE OF NEW YORK AND$1,876,500.00 TO NEW YORK STATE DEPARTMENT OF LAW). PAYMENTSHALL BE MADE BY ELECTRONIC FUNDS TRANSFER WITHIN TENBUSINESS DAYS OF RECEIVING WRITTEN PAYMENT PROCESSINGINSTRUCTIONS AND ANY DOCUMENTS REASONABLY REQUIRED BYCREDIT SUISSE TO PROCESS PAYMENT.

Firm Statement THE ACTION WAS SETTLED AND DISMISSED WITH PREJUDICE ONDECEMBER 31, 2018. UNDER THE TERMS OF THE SETTLEMENT, CREDITSUISSE PAID A TOTAL OF $10,000,000 ($8,123,500 TO THE STATE OF NEWYORK AND $1,876,500 TO THE NEW YORK STATE DEPARTMENT OF LAW) INEXCHANGE FOR A FULL RELEASE OF THE NYAG'S CLAIMS AS TO ALL "COVERED CONDUCT," DEFINED AS CREDIT SUISSE'S REPRESENTATIONS,DISCLOSURES OR OMISSIONS TO RMBS INVESTORS OR POTENTIALINVESTORS MADE ABOUT OR IN CONNECTION WITH THE PACKAGING,STRUCTURING, ARRANGEMENT, UNDERWRITING, ISSUANCE, MARKETINGAND SALE PRIOR TO JANUARY 1, 2009 BY CREDIT SUISSE OR ITSAFFILIATES OF RMBS.

Monetary/Fine $10,000,000.00Sanctions Ordered or ReliefGranted:





www.finra.org/brokercheck User GuidanceTHE ACTION WAS SETTLED AND DISMISSED WITH PREJUDICE ONDECEMBER 31, 2018. UNDER THE TERMS OF THE SETTLEMENT, CREDITSUISSE PAID A TOTAL OF $10,000,000 ($8,123,500 TO THE STATE OF NEWYORK AND $1,876,500 TO THE NEW YORK STATE DEPARTMENT OF LAW) INEXCHANGE FOR A FULL RELEASE OF THE NYAG'S CLAIMS AS TO ALL "COVERED CONDUCT," DEFINED AS CREDIT SUISSE'S REPRESENTATIONS,DISCLOSURES OR OMISSIONS TO RMBS INVESTORS OR POTENTIALINVESTORS MADE ABOUT OR IN CONNECTION WITH THE PACKAGING,STRUCTURING, ARRANGEMENT, UNDERWRITING, ISSUANCE, MARKETINGAND SALE PRIOR TO JANUARY 1, 2009 BY CREDIT SUISSE OR ITSAFFILIATES OF RMBS.

Disclosure 2 of 4

i


Initiated By: CLAYMORE HOLDING, LLC

Relief Sought:




Other Product Types: LOAN

Court Details: DISTRICT COURT OF DALLAS COUNTY, TEXAS

CREDIT SUISSE ARRANGED AND SYNDICATED A LOAN REFINANCING FORLAKE LAS VEGAS ("LLV"), A MASTER PLANNED COMMUNITY INHENDERSON, NEVADA IN JUNE 2007. PLAINTIFF ALLEGES THAT CREDITSUISSE, ALONG WITH THE APPRAISAL FIRM CB RICHARD ELLIS "CONCOCT[ED] AND APPROV[ED]" AN UNREASONABLE AND INFLATEDAPPRAISAL OF THE DEVELOPMENT THAT WAS PROVIDED TO THEINVESTORS IN THE REFINANCED LOAN, INCLUDING THE HIGHLAND-MANAGED FUNDS. THE HIGHLAND-MANAGED FUNDS PURCHASED OVER$250M OF THE $540 MILLION IN DEBT ISSUED IN CONNECTION WITH THEREFINANCING AND SUBSEQUENTLY ACQUIRED ADDITIONAL INTERESTS INTHE LOAN, INCLUDING ON THE SECONDARY MARKET. LLV FILED FORBANKRUPTCY IN JULY 2008. THE COMPLAINT ALLEGES CLAIMS FORBREACH OF CONTRACT (REGARDING THE CREDIT AGREEMENT), BREACHOF DUTY OF GOOD FAITH AND FAIR DEALING, FRAUD BY NON-DISCLOSURE, FRAUDULENT INDUCEMENT, AIDING AND ABETTING FRAUD,CIVIL CONSPIRACY AND UNJUST ENRICHMENT. THE COMPLAINT NAMESBOTH CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH AND CREDIT SUISSESECURITIES (USA) LLC.

Allegations:


Resolution: Judgment Rendered


Monetary/Fine $211,863,998.56Sanctions Ordered or ReliefGranted: 578©2020 FINRA. All rights reserved. Report about CREDIT SUISSE SECURITIES (USA) LLC





Other Sanctions:

Sanction Details: FIRMS WERE FINED $211,863,998.56

Monetary/Fine $211,863,998.56Sanctions Ordered or ReliefGranted:

Disclosure 3 of 4

i



Relief Sought: Injunction

Other Relief Sought: CIVIL MONETARY PENALTIES, DISGORGEMENT



Other Product Types:

Court Details: UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK03 CV 2946 (WHP) (S.D.N.Y.)

SEC LITIGATION RELEASE 18110, APRIL 28, 2003: THE COMMISSION TODAYFILED A COMPLAINT AGAINST CSFB IN THE U.S. ALLEGING VIOLATIONS OFTHE FEDERAL SECURITIES LAWS AND NASD AND NYSE RULES.ACCORDING TO THE COMMISSION'S COMPLAINT, FROM AT LEAST JULY1998 THROUGH DECEMBER 2001, RESEARCH ANALYSTS AT CSFB WERESUBJECT TO INAPPROPRIATE INFLUENCE BY INVESTMENT BANKING ATTHE FIRM. THE COMPLAINT ALSO ALLEGES THAT CSFB PUBLISHED FALSEOR MISLEADING RESEARCH, PUBLISHED EXAGGERATED ORUNWARRANTED RESEARCH OR RESEARCH THAT LACKED A REASONABLEBASIS, ENGAGED IN IMPROPER "SPINNING" ACTIVITIES RELATING TOINITIAL PUBLIC OFFERINGS ("IPOS"), AND FAILED TO MAINTAINAPPROPRIATE SUPERVISION OVER ITS RESEARCH AND INVESTMENTBANKING OPERATIONS. ISSUED RESEARCH REPORTS THAT LACKED AREASONABLE BASIS, FAILED TO PROVIDE A BALANCED PRESENTATION OFTHE RELEVANT FACTS, MADE EXAGGERATED OR UNWARRANTED CLAIMS,OR FAILED TO DISCLOSE MATERIAL FACTS. CSFB ALSO FAILED TOESTABLISH AND MAINTAIN ADEQUATE PROCEDURES TO PROTECTRESEARCH ANALYSTS FROM CONFLICTS OF INTEREST AND FAILED TOSUPERVISE ADEQUATELY RESEARCH ANALYSTS' PARTICIPATION ININVESTMENT BANKING ACTIVITIES. CSFB ALSO FAILED TO SUPERVISEADEQUATELY ITS EMPLOYEES WITH REGARD TO IPO SPINNING ANDDISTRIBUTION PRACTICES.

Allegations:









Other Sanctions:

Sanction Details: SEC LITIGATION RELEASE 18438, OCTOBER 31, 2003: RESPONDENT, HISAGENTS, SERVANTS, EMPLOYEES, ATTORNEYS AND ALL PERSONS INACTIVE CONCERT OR PARTICIPATION WITH THEM WHO RECEIVE ACTUALNOTICE OF THIS FINAL JUDGMENT BY PERSONAL SERVICE OROTHERWISE, CONSENTED TO THE ENTRY OF THIS FINAL JUDGMENTWITHOUT ADMITTING OR DENYING THE ALLEGATIONS OF THE COMPLAINT,THEREFORE THE FIRM IS PERMANENTLY RESTRAINED AND ENJOINEDFROM VIOLATING SECTION 15(C)OF THE EXCHANGE ACT AND RULE 15C1-2PROMULGATED THEREUNDER; SECTION 17(A) OF THE EXCHANGE ACTAND RULE 17A-3 THEREUNDER; NASD RULES 2110, 2210 AND 3010, 3110;NYSE RULES 342, 401, 440, 472, 476; DEFENDANT SHALL PAY A TOTALAMOUNT OF $200,000,000 WHICH INCLUDES, $75,000,000 AS A PENALTY;$75,000,000, AS DISGORGEMENT OF COMMISSIONS AND OTHER MONIES,$50,000,000 TO BE USED FOR PROCUREMENT OF INDEPENDENTRESEARCH. IT IS FURTHER ORDERED, ADJUDGED AND DECREED THAT,FOR A PERIOD OF FIVE YEARS FROM THE EFFECTIVE DATE OF THIS FINALJUDGMENT OR SUCH SHORTER OR LONGER PERIOD AS THE COURT MAYORDER, DEFENDANTS ARE HEREBY ENJOINED FROM DESTROYING,MUTILATING, CONCEALING, ALTERING, OR DISPOSING OF ANYDOCUMENTS FILED WITH THE COMMISSION OR ANY OTHER REGULATORYAUTHORITY RELATING TO THIS COMPLAINT.

Regulator Statement CSFB HAS AGREED TO SETTLE THE COMMISSION'S ACTION AND HASCONSENTED, WITHOUT ADMITTING OR DENYING THE ALLEGATIONS OFTHE COMPLAINT, TO THE ENTRY OF A FINAL JUDGMENT THAT, IFAPPROVED BY THE COURT, PERMANENTLY ENJOINS CSFB FROMVIOLATIONS OF ANTIFRAUD PROVISION SECTION 15(C) OF THESECURITIES EXCHANGE ACT OF 1934 ("EXCHANGE ACT") AND RULE 15C1-2THEREUNDER, SECTION 17(A) OF THE EXCHANGE ACT AND RULE 17A-3THEREUNDER, AND NASD AND NYSE RULES PERTAINING TO JUST ANDEQUITABLE PRINCIPLES OF TRADE (NASD RULE 2110; NYSE RULES 401AND 476), ADVERTISING (NASD RULE 2210; NYSE RULE 472), BROKER-DEALER RECORD KEEPING (NASD RULE 3110; NYSE RULE 440), ANDSUPERVISORY PROCEDURES (NASD RULE 3010; NYSE RULE 342). THEFINAL JUDGMENT ALSO ORDERS THE FIRM TO MAKE THE PAYMENTSDESCRIBED ABOVE, AND PROVIDES FOR THE APPOINTMENT OF A FUNDADMINISTRATOR WHO, SUBJECT TO COURT APPROVAL, WILL FORMULATEAND ADMINISTER A PLAN OF DISTRIBUTION FOR THOSE MONIES PLACEDINTO THE DISTRIBUTION FUND. CSFB ALSO HAS AGREED AS PART OF THISSETTLEMENT TO RETAIN, AT ITS OWN EXPENSE, AN INDEPENDENTMONITOR TO CONDUCT A REVIEW TO PROVIDE REASONABLE ASSURANCETHAT THE FIRM IS COMPLYING WITH THE STRUCTURAL REFORMS.CSFB HAS AGREED TO PAY $75 MILLION AS DISGORGEMENT AND ANADDITIONAL $75 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OFTHESE PAYMENTS - $75 MILLION - WILL BE PAID IN CONNECTION WITH THESEC ACTION AND RELATED PROCEEDINGS BY THE NASD AND NYSE ANDWILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFIT OFCUSTOMERS OF THE FIRM. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS.

SEC LITIGATION RELEASE 21457, MARCH 19, 2010: THE HONORABLEJUDGE OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERNDISTRICT OF NEW YORK ISSUED AN ORDER ON MARCH 15, 2010APPROVING MODIFICATIONS TO THE FINAL JUDGMENTS ENTEREDAGAINST THE DEFENDANT AND OTHERS. THE FINAL JUDGMENTSCONTAINED AN EXTENSIVE ADDENDUM WITH PROVISIONS MANDATINGSTRUCTURAL AND OTHER REFORMS THAT ADDRESSED POTENTIALCONFLICTS OF INTEREST BETWEEN EQUITY RESEARCH ANALYSTS ANDINVESTMENT BANKING. THE SETTLEMENT PROVIDED THAT WITHRESPECT TO ANY PROVISION THAT HAD NOT BEEN EXPRESSLYSUPERSEDED BY SUBSEQUENT RULEMAKING WITHIN FIVE YEARS, THESEC WOULD AGREE TO AN AMENDMENT/MODIFICATION OF SUCH TERM,SUBJECT TO COURT APPROVAL, UNLESS THE SEC BELIEVES IT WOULDNOT BE IN THE PUBLIC INTEREST. THE COURT APPROVED REMOVING ANUMBER OF PROVISIONS. THE ADDENDUM NO LONGER INCLUDESPROHIBITIONS AGAINST INVESTMENT BANKING INPUT INTO RESEARCHANALYST COMPENSATION AND THE BAR AGAINST RESEARCH ANALYSTSPARTICIPATING IN EFFORTS TO SOLICIT INVESTMENT BANKING BUSINESS,AMONG OTHER THINGS. THE MODIFIED ADDENDUM AS ORDERED BY THECOURT AND SUPPORTED BY THE SEC MAINTAINED THE REQUIREMENTTHAT A CHAPERONE FROM LEGAL OR COMPLIANCE BE PRESENT WHENINVESTMENT BANKING SEEKS THE VIEWS OF RESEARCH ANALYSTSCONCERNING A PROPOSED TRANSACTION OR A POTENTIAL CANDIDATEFOR A TRANSACTION. ONE PROPOSED MODIFICATION WOULD HAVEALLOWED INVESTMENT BANKING TO SEEK THE VIEWS OF RESEARCHANALYSTS REGARDING MARKET OR INDUSTRY TRENDS, CONDITIONS, ORDEVELOPMENTS WITHOUT THE REQUIREMENT OF A CHAPERONE,SUBJECT TO CERTAIN LIMITATIONS INCLUDING THE IMPLEMENTATION OFCONTROLS AND TRAINING AS DESCRIBED IN THE NOVEMBER 30, 2009LETTER TO THE COURT FROM THE SETTLING FIRMS. IN HIS MARCH 15,2010 ORDER, THE HONORABLE JUDGE DID NOT APPROVE THISPROPOSED MODIFICATION. AS A RESULT OF THE COURT'S ORDER, THEDEFENDANT REMAINS SUBJECT TO A NUMBER OF IMPORTANTRESTRICTIONS THAT APPLY ONLY TO IT AND OTHER FIRMS AFFECTED BYTHE FINAL JUDGMENTS AND SETTLEMENT. TOGETHER WITH THE RESTOF THE INDUSTRY, THEY ALSO REMAIN SUBJECT TO ALL OF THEPROVISIONS OF NASD RULE 2711, NYSE RULE 472, AND THE SEC'SREGULATION AC THAT ADDRESS RESEARCH ANALYST CONFLICTS OFINTEREST.

Monetary/Fine $200,000,000.00Cease and Desist/Injunction

Sanctions Ordered or ReliefGranted:






CSFB HAS AGREED TO SETTLE THE COMMISSION'S ACTION AND HASCONSENTED, WITHOUT ADMITTING OR DENYING THE ALLEGATIONS OFTHE COMPLAINT, TO THE ENTRY OF A FINAL JUDGMENT THAT, IFAPPROVED BY THE COURT, PERMANENTLY ENJOINS CSFB FROMVIOLATIONS OF ANTIFRAUD PROVISION SECTION 15(C) OF THESECURITIES EXCHANGE ACT OF 1934 ("EXCHANGE ACT") AND RULE 15C1-2THEREUNDER, SECTION 17(A) OF THE EXCHANGE ACT AND RULE 17A-3THEREUNDER, AND NASD AND NYSE RULES PERTAINING TO JUST ANDEQUITABLE PRINCIPLES OF TRADE (NASD RULE 2110; NYSE RULES 401AND 476), ADVERTISING (NASD RULE 2210; NYSE RULE 472), BROKER-DEALER RECORD KEEPING (NASD RULE 3110; NYSE RULE 440), ANDSUPERVISORY PROCEDURES (NASD RULE 3010; NYSE RULE 342). THEFINAL JUDGMENT ALSO ORDERS THE FIRM TO MAKE THE PAYMENTSDESCRIBED ABOVE, AND PROVIDES FOR THE APPOINTMENT OF A FUNDADMINISTRATOR WHO, SUBJECT TO COURT APPROVAL, WILL FORMULATEAND ADMINISTER A PLAN OF DISTRIBUTION FOR THOSE MONIES PLACEDINTO THE DISTRIBUTION FUND. CSFB ALSO HAS AGREED AS PART OF THISSETTLEMENT TO RETAIN, AT ITS OWN EXPENSE, AN INDEPENDENTMONITOR TO CONDUCT A REVIEW TO PROVIDE REASONABLE ASSURANCETHAT THE FIRM IS COMPLYING WITH THE STRUCTURAL REFORMS.CSFB HAS AGREED TO PAY $75 MILLION AS DISGORGEMENT AND ANADDITIONAL $75 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OFTHESE PAYMENTS - $75 MILLION - WILL BE PAID IN CONNECTION WITH THESEC ACTION AND RELATED PROCEEDINGS BY THE NASD AND NYSE ANDWILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFIT OFCUSTOMERS OF THE FIRM. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS.







CSFB HAS AGREED TO SETTLE THE COMMISSION'S ACTION AND HASCONSENTED, WITHOUT ADMITTING OR DENYING THE ALLEGATIONS OFTHE COMPLAINT, TO THE ENTRY OF A FINAL JUDGMENT THAT, IFAPPROVED BY THE COURT, PERMANENTLY ENJOINS CSFB FROMVIOLATIONS OF ANTIFRAUD PROVISION SECTION 15(C) OF THESECURITIES EXCHANGE ACT OF 1934 ("EXCHANGE ACT") AND RULE 15C1-2THEREUNDER, SECTION 17(A) OF THE EXCHANGE ACT AND RULE 17A-3THEREUNDER, AND NASD AND NYSE RULES PERTAINING TO JUST ANDEQUITABLE PRINCIPLES OF TRADE (NASD RULE 2110; NYSE RULES 401AND 476), ADVERTISING (NASD RULE 2210; NYSE RULE 472), BROKER-DEALER RECORD KEEPING (NASD RULE 3110; NYSE RULE 440), ANDSUPERVISORY PROCEDURES (NASD RULE 3010; NYSE RULE 342). THEFINAL JUDGMENT ALSO ORDERS THE FIRM TO MAKE THE PAYMENTSDESCRIBED ABOVE, AND PROVIDES FOR THE APPOINTMENT OF A FUNDADMINISTRATOR WHO, SUBJECT TO COURT APPROVAL, WILL FORMULATEAND ADMINISTER A PLAN OF DISTRIBUTION FOR THOSE MONIES PLACEDINTO THE DISTRIBUTION FUND. CSFB ALSO HAS AGREED AS PART OF THISSETTLEMENT TO RETAIN, AT ITS OWN EXPENSE, AN INDEPENDENTMONITOR TO CONDUCT A REVIEW TO PROVIDE REASONABLE ASSURANCETHAT THE FIRM IS COMPLYING WITH THE STRUCTURAL REFORMS.CSFB HAS AGREED TO PAY $75 MILLION AS DISGORGEMENT AND ANADDITIONAL $75 MILLION IN PENALTIES. ONE-HALF OF THE TOTAL OFTHESE PAYMENTS - $75 MILLION - WILL BE PAID IN CONNECTION WITH THESEC ACTION AND RELATED PROCEEDINGS BY THE NASD AND NYSE ANDWILL BE PLACED INTO A DISTRIBUTION FUND FOR THE BENEFIT OFCUSTOMERS OF THE FIRM. THE REMAINDER WILL BE PAID TO RESOLVERELATED PROCEEDINGS BY STATE REGULATORS.



Initiated By: UNITED STATES SECURITIES AND EXCHANGE COMMISSION ("SEC")


Other Relief Sought: CIVIL MONETARY PENALITIES, DISGORGEMENT




Court Details: UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK 03CV 2946 (WHP) (S.D.N.Y.)

THE SEC ALLEGED VIOLATIONS OF THE FEDERAL SECURITIES LAWS ANDNASD AND NYSE RULES. THE SEC ALLEGED THAT (1) FROM JULY 1998THROUGH DECEMBER 2001, CREDIT SUISE FIRST BOSTON LLC ("CSFB")CREATED AND FOSTERED AN ENVIRONMENT WITH CONFLICTS OFINTEREST THAT, IN SOME CIRCUMSTANCES, UNDERMINED THEINDEPENDENCE OF EQUITY RESEARCH ANALYSTS AND AFFECTED THEOBJECTIVITY OF THE REPORTS THEY ISSUED, AND (2) FROM 1999 UNTIL2001, CSFB, THROUGH ITS TECHNOLOGY PRIVATE CLIENT SERVICESGROUP, ENGAGED IN IMPROPER "SPINNING" ACTIVITIES RELATING TOINITIAL PUBLIC OFFERINGS.

Allegations:




Other Sanctions:

Sanction Details: CSFB CONSENTED TO THE ENTRY OF THIS FINAL JUDGMENT WITHOUTADMITTING OR DENYING THE ALLEGATIONS OF THE COMPLAINT. THE FIRMIS PERMANENTLY RESTRAINED AND ENJOINED FROM VIOLATING SECTION15(C) OF THE EXCHANGE ACT AND RULE 15C1-2 PROMULGATEDTHEREUNDER; SECTION 17(A) OF THE EXCHANGE ACT AND RULE 17A-3THEREUNDER; NASD RULES 2110, 2210 AND 3010, 3110; NYSE RULES 342,401, 440, 472, 476. DEFENDANT SHALL PAY A TOTAL AMOUNT OF$200,000,000 WHICH INCLUDES, $75,000,000 AS A PENALTY; $75,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $50,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH. IT ISFURTHER ORDERED, ADJUDGED AND DECREED THAT, FOR A PERIOD OFFIVE YEARS FROM THE EFFECTIVE DATE OF THIS FINAL JUDGMENT ORSUCH SHORTER OR LONGER PERIOD AS THE COURT MAY ORDER,DEFENDANTS ARE HEREBY ENJOINED FROM DESTROYING, MUTILATING,CONCEALING, ALTERING, OR DISPOSING OF ANY DOCUMENTS FILED WITHTHE COMMISSION OR ANY OTHER REGULATORY AUTHORITY RELATING TOTHIS COMPLAINT.

Monetary/Fine $200,000,000.00Cease and Desist/Injunction






www.finra.org/brokercheck User GuidanceCSFB CONSENTED TO THE ENTRY OF THIS FINAL JUDGMENT WITHOUTADMITTING OR DENYING THE ALLEGATIONS OF THE COMPLAINT. THE FIRMIS PERMANENTLY RESTRAINED AND ENJOINED FROM VIOLATING SECTION15(C) OF THE EXCHANGE ACT AND RULE 15C1-2 PROMULGATEDTHEREUNDER; SECTION 17(A) OF THE EXCHANGE ACT AND RULE 17A-3THEREUNDER; NASD RULES 2110, 2210 AND 3010, 3110; NYSE RULES 342,401, 440, 472, 476. DEFENDANT SHALL PAY A TOTAL AMOUNT OF$200,000,000 WHICH INCLUDES, $75,000,000 AS A PENALTY; $75,000,000 ASDISGORGEMENT OF COMMISSIONS AND OTHER MONIES, $50,000,000 TOBE USED FOR PROCUREMENT OF INDEPENDENT RESEARCH. IT ISFURTHER ORDERED, ADJUDGED AND DECREED THAT, FOR A PERIOD OFFIVE YEARS FROM THE EFFECTIVE DATE OF THIS FINAL JUDGMENT ORSUCH SHORTER OR LONGER PERIOD AS THE COURT MAY ORDER,DEFENDANTS ARE HEREBY ENJOINED FROM DESTROYING, MUTILATING,CONCEALING, ALTERING, OR DISPOSING OF ANY DOCUMENTS FILED WITHTHE COMMISSION OR ANY OTHER REGULATORY AUTHORITY RELATING TOTHIS COMPLAINT.

Disclosure 4 of 4

i



Relief Sought:





Court Details: USDC FOR THE SOUTHERN DISTRICT OF NY

FRAUDAllegations:


Resolution: Consent


Other Sanctions:

Sanction Details: PERMANENT INJUNCTION, PENALTY, DISGORGEMENT

Regulator Statement 5/29/86, SEC NEWS DIGEST, ISSUE 86-87, MAY 6, 1986: THE COMMISSIONFILED ON MAY 5, 1986 A COMPLAINT FOR PERMANENT INJUNCTION ANDOTHER RELIEF IN THE USDC FOR THE SOUTHERN DISTRICT OF NEWYORK AGAINST THE FIRST BOSTON CORPORATION, A REGISTEREDBROKER-DEALER, ALLEGING VIOLATIONS OF THE ANTIFRAUD PROVISIONSOF THE SECURITIES EXCHANGE ACT OF 1934. THE COMPLAINT ALLEGESTHAT ON JANUARY 30, 1986 FIRST BOSTON, IN BREACH OF A DUTY OFTRUST AND CONFIDENCE TO ITS CLIENT, CIGNA CORPORATION, TRADEDIN CIGNA SECURITIES FOR THE FIRM'S ACCOUNT WHILE IN POSSESSIONOF MATERIAL NON-PUBLIC INFORMATION PROVIDED BY CIGNACONCERNING A FORTHCOMING ANNOUNCEMENT OF A $1.2 BILLION TOCIGNA'S PROPERTY-CASUALTY LOSS RESERVES. WITHOUT ADMITTING ORDENYING THE ALLEGATIONS IN THE COMPLAINT, FIRST BOSTONCONSENTED TO A FINAL JUDGEMENT OF PERMANENT INJUNCTION ANDOTHER RELIEF REQUIRING IT, AMONG OTHER THINGS, TO DISGORGEPROFITS OF $132,138 DERIVED FROM THE ALLEGED TRADINGVIOLATIONS, PAY A PENALTY UNDER THE INSIDER TRADING SANCTIONSACT OF 1984 OF $264,276 TO THE UNITED STATES TREASURY, ANDREVIEW, AND AS MAY BE APPROPRIATE, MODIFY THE FIRM'S "RESTRICTEDLIST" AND "CHINESE WALLS" PROCEDURES. (SEC V. THE FIRST BOSTONCORPORATION, USDC SDNY, NO. 86 CIV. 3524 PNL) (LR-11092)

Monetary/Fine $264,276.00Disgorgement/RestitutionCease and Desist/Injunction






www.finra.org/brokercheck User Guidance5/29/86, SEC NEWS DIGEST, ISSUE 86-87, MAY 6, 1986: THE COMMISSIONFILED ON MAY 5, 1986 A COMPLAINT FOR PERMANENT INJUNCTION ANDOTHER RELIEF IN THE USDC FOR THE SOUTHERN DISTRICT OF NEWYORK AGAINST THE FIRST BOSTON CORPORATION, A REGISTEREDBROKER-DEALER, ALLEGING VIOLATIONS OF THE ANTIFRAUD PROVISIONSOF THE SECURITIES EXCHANGE ACT OF 1934. THE COMPLAINT ALLEGESTHAT ON JANUARY 30, 1986 FIRST BOSTON, IN BREACH OF A DUTY OFTRUST AND CONFIDENCE TO ITS CLIENT, CIGNA CORPORATION, TRADEDIN CIGNA SECURITIES FOR THE FIRM'S ACCOUNT WHILE IN POSSESSIONOF MATERIAL NON-PUBLIC INFORMATION PROVIDED BY CIGNACONCERNING A FORTHCOMING ANNOUNCEMENT OF A $1.2 BILLION TOCIGNA'S PROPERTY-CASUALTY LOSS RESERVES. WITHOUT ADMITTING ORDENYING THE ALLEGATIONS IN THE COMPLAINT, FIRST BOSTONCONSENTED TO A FINAL JUDGEMENT OF PERMANENT INJUNCTION ANDOTHER RELIEF REQUIRING IT, AMONG OTHER THINGS, TO DISGORGEPROFITS OF $132,138 DERIVED FROM THE ALLEGED TRADINGVIOLATIONS, PAY A PENALTY UNDER THE INSIDER TRADING SANCTIONSACT OF 1984 OF $264,276 TO THE UNITED STATES TREASURY, ANDREVIEW, AND AS MAY BE APPROPRIATE, MODIFY THE FIRM'S "RESTRICTEDLIST" AND "CHINESE WALLS" PROCEDURES. (SEC V. THE FIRST BOSTONCORPORATION, USDC SDNY, NO. 86 CIV. 3524 PNL) (LR-11092)


Initiated By: U.S. SECURITIES AND EXCHANGE COMMISSION ("SEC")

Relief Sought:





Court Details: UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK;NO. 86 CIV. 3524-PNL

VIOLATIONS OF ANTI-FRAUD PROVISIONS OF THE SECURITIES EXCHANGEACT OF 1934. SEC ALLEGED THAT ON JANUARY 30, 1986 FIRST BOSTON, INBREACH OF A DUTY OF TRUST AND CONFIDENCE TO ITS CLIENT, CIGNACORPORATION, TRADED IN CIGNA SECURITIES FOR THE FIRM'S ACCOUNTWHILE IN POSSESSION OF MATERIAL NON-PUBLIC INFORMATIONPROVIDED BY CIGNA CONCERNING A FORTHCOMING ANNOUNCEMENT OF$1.2 BILLION TO CIGNA'S PROPERTY-CASUALTY LOSS RESERVES.

Allegations:


Resolution: Consent 584©2020 FINRA. All rights reserved. Report about CREDIT SUISSE SECURITIES (USA) LLC





Resolution: Consent


Other Sanctions:

Sanction Details: INJUCTION, PENALTY, DISGORGEMENT

Firm Statement WITHOUT ADMITTING OR DENYING THE ALLEGATIONS IN THE COMPLAINT,FIRST BOSTON CONSENTED TO FINAL JUDGEMENT OF INJUNTION ANDOTHER RELIEF REQUIRING IT, AMONG OTHER THINGS, TO DISGORGEPROFITS OF $132,138 DERIVED FROM THE ALLEGED TRADINGVIOLATIONS, PAY A PENALTY UNDER THE INSIDER TRADING SANCTIONSACT OF 1984 OF $264,276 TO THE UNITED STATES TREASURY, ANDREVIEW, AND AS MAY BE APPROPRIATE, MODIFY THE FIRM'S "RESTRICTEDLIST" AND "CHINESE WALLS" PRODECURES.

Monetary/Fine $264,276.00Disgorgement/RestitutionCease and Desist/Injunction







Civil - Pending

This type of disclosure event involves a pending civil court action that with seek an injunction to cease certain investment-related activity or alleges a violation of any investment-related statute or regulation.

Disclosure 1 of 6


Initiated By: PRIVATE PLAINTIFF - PUTNAM BANK


Court Details: UNITED STATES DISTRICT COURT, SOUTHERN DISTRICT OF NEW YORK;CASE 1:19-CV-00439

THE COMPLAINT ALLEGES THAT THE USD ICE LIBOR RATE FROM 2014 TOTHE PRESENT HAS COLLUSIVELY BEEN SET ARTIFICIALLY LOW BY ALLDEFENDANTS, WHO INCLUDE THE PANEL BANKS AND CERTAIN AFFILIATESAND ICE AND ITS AFFILIATES. PLAINTIFF ALLEGES A "PROFIT-MOTIVATEDCONSPIRACY" TO SET USD ICE LIBOR LOWER SO THAT THE PANEL BANKDEFENDANTS COULD MAKE LOWER INTEREST PAYMENTS ON FLOATINGRATE NOTES AND INTEREST RATE SWAPS. IN ADDITION TO THE MOTIVE,PLAINTIFF CONTENDS THAT DEFENDANTS HAD THE OPPORTUNITY TOCONSPIRE THROUGH THE ICE PROCESS AND RECIDIVISM (ALLEGEDMISCONDUCT WITH RESPECT TO LIBOR RATES IN THE PAST) SUPPORTSTHE PRESENT CONSPIRACY. PLAINTIFF ALSO ASSERTS THAT ICE AND THEPANEL BANK DEFENDANTS FURTHERED THE CONSPIRACY BYCONCEALING THE "LACK OF INTERBANK FUNDING UNDERLYING USD ICELIBOR DURING THE CLASS PERIOD." TO SET ICE LIBOR, THE PANELBANKS WERE INSTRUCTED TO ANSWER THE QUESTION: "AT WHAT RATECOULD YOU BORROW FUNDS, WERE YOU TO DO SO BY ASKING FOR ANDTHEN ACCEPTING INTERBANK OFFERS IN A REASONABLE MARKET SIZEJUST PRIOR TO 11AM?" PLAINTIFF ASSERTS THAT TO ANSWER OR EVENASK THIS QUESTION SUGGESTED THE EXISTENCE OF AN ACTIVE "INTERBANK" FUNDING MARKET; HOWEVER, THERE WAS NO SUCHUNDERLYING MARKET, THE PLAINTIFF CLAIMS. PLAINTIFF HASASSERTED TWO CLAIMS: ONE FOR PRICE-FIXING UNDER THE SHERMANACT AND ONE FOR UNJUST ENRICHMENT, BOTH PURPORTEDLY ONBEHALF OF A CLASS OF ALL PERSONS OR ENTITIES RESIDING IN THEUNITED STATES THAT DIRECTLY TRANSACTED WITH A PANEL BANKDEFENDANT IN AN ICE LIBOR-LINKED FLOATING RATE DEBT INSTRUMENTOR SWAP DURING THE CLASS PERIOD. PUTNAM HAS NOT ALLEGED ANYSPECIFIC TRADES WITH CREDIT SUISSE, AND THERE ARE NO CREDITSUISSE-SPECIFIC ALLEGATIONS OTHER THAN ICE LIBOR SUBMISSIONDATA AND RELATED STATISTICS.

Allegations:

Current Status: Pending

Date Notice/Process Served: 01/31/2019






Relief Sought: Other

Other Relief Sought: ADJUDGE THAT DEFENDANTS VIOLATED FEDERAL AND STATE LAWS;AWARD PLAINTIFFS AND MEMBERS OF THE CLASS TREBLE DAMAGES;AWARD REASONABLE ATTORNEY'S FEES AND COSTS OF SUIT; AWARDPRE- AND POST-JUDGMENT INTEREST; ESTABLISH A CONSTRUCTIVETRUST INTO WHICH DEFENDANTS BE MADE TO DISGORGE ALL ILL-GOTTEN GAINS FROM WHICH PLAINTIFFS AND MEMBERS OF THE CLASSMAY OBTAIN RESTITUTION; AND GRANT SUCH OTHER, FURTHER ANDDIFFERENT RELIEF AS MAY BE JUST AND PROPER.


Other Product Types: LIBOR


Firm Statement THE COMPLAINT ALLEGES THAT THE USD ICE LIBOR RATE FROM 2014 TOTHE PRESENT HAS COLLUSIVELY BEEN SET ARTIFICIALLY LOW BY ALLDEFENDANTS, WHO INCLUDE THE PANEL BANKS AND CERTAIN AFFILIATESAND ICE AND ITS AFFILIATES. PLAINTIFF ALLEGES A "PROFIT-MOTIVATEDCONSPIRACY" TO SET USD ICE LIBOR LOWER SO THAT THE PANEL BANKDEFENDANTS COULD MAKE LOWER INTEREST PAYMENTS ON FLOATINGRATE NOTES AND INTEREST RATE SWAPS. IN ADDITION TO THE MOTIVE,PLAINTIFF CONTENDS THAT DEFENDANTS HAD THE OPPORTUNITY TOCONSPIRE THROUGH THE ICE PROCESS AND RECIDIVISM (ALLEGEDMISCONDUCT WITH RESPECT TO LIBOR RATES IN THE PAST) SUPPORTSTHE PRESENT CONSPIRACY. PLAINTIFF ALSO ASSERTS THAT ICE AND THEPANEL BANK DEFENDANTS FURTHERED THE CONSPIRACY BYCONCEALING THE "LACK OF INTERBANK FUNDING UNDERLYING USD ICELIBOR DURING THE CLASS PERIOD." TO SET ICE LIBOR, THE PANELBANKS WERE INSTRUCTED TO ANSWER THE QUESTION: "AT WHAT RATECOULD YOU BORROW FUNDS, WERE YOU TO DO SO BY ASKING FOR ANDTHEN ACCEPTING INTERBANK OFFERS IN A REASONABLE MARKET SIZEJUST PRIOR TO 11AM?" PLAINTIFF ASSERTS THAT TO ANSWER OR EVENASK THIS QUESTION SUGGESTED THE EXISTENCE OF AN ACTIVE "INTERBANK" FUNDING MARKET; HOWEVER, THERE WAS NO SUCHUNDERLYING MARKET, THE PLAINTIFF CLAIMS. PLAINTIFF HASASSERTED TWO CLAIMS: ONE FOR PRICE-FIXING UNDER THE SHERMANACT AND ONE FOR UNJUST ENRICHMENT, BOTH PURPORTEDLY ONBEHALF OF A CLASS OF ALL PERSONS OR ENTITIES RESIDING IN THEUNITED STATES THAT DIRECTLY TRANSACTED WITH A PANEL BANKDEFENDANT IN AN ICE LIBOR-LINKED FLOATING RATE DEBT INSTRUMENTOR SWAP DURING THE CLASS PERIOD. PUTNAM HAS NOT ALLEGED ANYSPECIFIC TRADES WITH CREDIT SUISSE, AND THERE ARE NO CREDITSUISSE-SPECIFIC ALLEGATIONS OTHER THAN ICE LIBOR SUBMISSIONDATA AND RELATED STATISTICS.

Disclosure 2 of 6

i






Disclosure 2 of 6


Initiated By: PRIVATE PLAINTIFF - CITY OF LIVONIA




Other Product Types: LIBOR

Court Details: UNITED STATES DISTRICT COURT, SOUTHERN DISTRICT OF NEW YORK;CASE 1:19-CV-00965

THE COMPLAINT ALLEGES THAT THE USD ICE LIBOR RATE FROM 2014 TOTHE PRESENT HAS COLLUSIVELY BEEN SET ARTIFICIALLY LOW BY ALLDEFENDANTS, WHO INCLUDE THE PANEL BANKS AND CERTAIN AFFILIATESAND ICE AND ITS AFFILIATES. PLAINTIFF ALLEGES A "PROFIT-MOTIVATEDCONSPIRACY" TO SET USD ICE LIBOR LOWER SO THAT THE PANEL BANKDEFENDANTS COULD MAKE LOWER INTEREST PAYMENTS ON FLOATINGRATE NOTES AND INTEREST RATE SWAPS. IN ADDITION TO THE MOTIVE,PLAINTIFF CONTENDS THAT DEFENDANTS HAD THE OPPORTUNITY TOCONSPIRE THROUGH THE ICE PROCESS AND RECIDIVISM (ALLEGEDMISCONDUCT WITH RESPECT TO LIBOR RATES IN THE PAST) SUPPORTSTHE PRESENT CONSPIRACY. PLAINTIFF ALSO ASSERTS THAT ICE AND THEPANEL BANK DEFENDANTS FURTHERED THE CONSPIRACY BYCONCEALING THE "LACK OF INTERBANK FUNDING UNDERLYING USD ICELIBOR DURING THE CLASS PERIOD." TO SET ICE LIBOR, THE PANELBANKS WERE INSTRUCTED TO ANSWER THE QUESTION: "AT WHAT RATECOULD YOU BORROW FUNDS, WERE YOU TO DO SO BY ASKING FOR ANDTHEN ACCEPTING INTERBANK OFFERS IN A REASONABLE MARKET SIZEJUST PRIOR TO 11AM?" PLAINTIFF ASSERTS THAT TO ANSWER OR EVENASK THIS QUESTION SUGGESTED THE EXISTENCE OF AN ACTIVE "INTERBANK" FUNDING MARKET; HOWEVER, THERE WAS NO SUCHUNDERLYING MARKET, THE PLAINTIFF CLAIMS. PLAINTIFF HASASSERTED TWO CLAIMS: ONE FOR PRICE-FIXING UNDER THE SHERMANACT AND ONE FOR UNJUST ENRICHMENT, BOTH PURPORTEDLY ONBEHALF OF A CLASS OF ALL PERSONS OR ENTITIES RESIDING IN THEUNITED STATES THAT DIRECTLY TRANSACTED WITH A PANEL BANKDEFENDANT IN AN ICE LIBOR-LINKED FLOATING RATE DEBT INSTRUMENTOR SWAP DURING THE CLASS PERIOD. CITY OF LIVONIA HAS NOTALLEGED ANY SPECIFIC TRADES WITH CREDIT SUISSE, AND THERE ARENO CREDIT SUISSE-SPECIFIC ALLEGATIONS OTHER THAN ICE LIBORSUBMISSION DATA AND RELATED STATISTICS.

Allegations:









Other Relief Sought: ADJUDGE THAT DEFENDANTS VIOLATED FEDERAL AND STATE LAWS;AWARD PLAINTIFFS AND MEMBERS OF THE CLASS TREBLE DAMAGES;AWARD REASONABLE ATTORNEY'S FEES AND COSTS OF SUIT; AWARDPRE- AND POST-JUDGMENT INTEREST; ESTABLISH A CONSTRUCTIVETRUST INTO WHICH DEFENDANTS BE MADE TO DISGORGE ALL ILL-GOTTEN GAINS FROM WHICH PLAINTIFFS AND MEMBERS OF THE CLASSMAY OBTAIN RESTITUTION; AND GRANT SUCH OTHER, FURTHER ANDDIFFERENT RELIEF AS MAY BE JUST AND PROPER.

Firm Statement THE COMPLAINT ALLEGES THAT THE USD ICE LIBOR RATE FROM 2014 TOTHE PRESENT HAS COLLUSIVELY BEEN SET ARTIFICIALLY LOW BY ALLDEFENDANTS, WHO INCLUDE THE PANEL BANKS AND CERTAIN AFFILIATESAND ICE AND ITS AFFILIATES. PLAINTIFF ALLEGES A "PROFIT-MOTIVATEDCONSPIRACY" TO SET USD ICE LIBOR LOWER SO THAT THE PANEL BANKDEFENDANTS COULD MAKE LOWER INTEREST PAYMENTS ON FLOATINGRATE NOTES AND INTEREST RATE SWAPS. IN ADDITION TO THE MOTIVE,PLAINTIFF CONTENDS THAT DEFENDANTS HAD THE OPPORTUNITY TOCONSPIRE THROUGH THE ICE PROCESS AND RECIDIVISM (ALLEGEDMISCONDUCT WITH RESPECT TO LIBOR RATES IN THE PAST) SUPPORTSTHE PRESENT CONSPIRACY. PLAINTIFF ALSO ASSERTS THAT ICE AND THEPANEL BANK DEFENDANTS FURTHERED THE CONSPIRACY BYCONCEALING THE "LACK OF INTERBANK FUNDING UNDERLYING USD ICELIBOR DURING THE CLASS PERIOD." TO SET ICE LIBOR, THE PANELBANKS WERE INSTRUCTED TO ANSWER THE QUESTION: "AT WHAT RATECOULD YOU BORROW FUNDS, WERE YOU TO DO SO BY ASKING FOR ANDTHEN ACCEPTING INTERBANK OFFERS IN A REASONABLE MARKET SIZEJUST PRIOR TO 11AM?" PLAINTIFF ASSERTS THAT TO ANSWER OR EVENASK THIS QUESTION SUGGESTED THE EXISTENCE OF AN ACTIVE "INTERBANK" FUNDING MARKET; HOWEVER, THERE WAS NO SUCHUNDERLYING MARKET, THE PLAINTIFF CLAIMS. PLAINTIFF HASASSERTED TWO CLAIMS: ONE FOR PRICE-FIXING UNDER THE SHERMANACT AND ONE FOR UNJUST ENRICHMENT, BOTH PURPORTEDLY ONBEHALF OF A CLASS OF ALL PERSONS OR ENTITIES RESIDING IN THEUNITED STATES THAT DIRECTLY TRANSACTED WITH A PANEL BANKDEFENDANT IN AN ICE LIBOR-LINKED FLOATING RATE DEBT INSTRUMENTOR SWAP DURING THE CLASS PERIOD. CITY OF LIVONIA HAS NOTALLEGED ANY SPECIFIC TRADES WITH CREDIT SUISSE, AND THERE ARENO CREDIT SUISSE-SPECIFIC ALLEGATIONS OTHER THAN ICE LIBORSUBMISSION DATA AND RELATED STATISTICS.

Disclosure 3 of 6

i








Relief Sought: Money Damages (Private/Civil Complaint)

Other Relief Sought: RESCISSION, RESTITUTION, CEASE AND DESIST.



Other Product Types: RESIDENTIAL MORTGAGE BACKED SECURITIES ("RMBS") TRUSTCERTIFICATES.

Court Details: SUPERIOR COURT OF NEW JERSEYCHANCERY DIVISIONMERCER COUNTYDOCKET NO. MER-C-13 7-13

MAKING MATERIALLY FALSE AND MISLEADING STATEMENTS AND/OROMITTING MATERIAL FACTS. ENGAGING IN ANY ACT OR PRACTICE WHICHWOULD OPERATE AS A FRAUD OR DECEIT UPON ANY PERSON INCONNECTION WITH THE OFFER, SALE OR PURCHASE OF SECURITIES.

Allegations:


Regulator Statement CREDIT SUISSE MISREPRESENTED THAT THE LOANS IT SECURITIZED ANDSOLD SUBSTANTIALLY COMPLIED WITH UNDERWRITING GUIDELINES, ANDFAILED TO DISCLOSE THE LACK OF A MEANINGFUL DUE DILIGENCEPROCESS TO ENSURE SUCH COMPLIANCE. CREDIT SUISSEMISREPRESENTED AND OMITTED TO DISCLOSE THE POOR QUALITY OFTHE LOAN ORIGINATORS. CREDIT SUISSE MADE MATERIALLY MISLEADINGSTATEMENTS AND OMISSIONS OF MATERIAL FACTS CONCERNING THELOAN-TO-VALUE RATIOS OF THE LOANS IN THE TRUSTS. CREDIT SUISSEFAILED TO DISCLOSE THE MATERIAL IMPACT OF SELLER CONCESSIONSON CLTV VALUES. CREDIT SUISSE OMITTED TO DISCLOSE MATERIALINFORMATION THAT CREDIT SUISSE AND ITS TRADERS HAD ELIMINATEDFROM THEIR ELIGIBILITY MATRIX THE TYPE OF REDUCEDDOCUMENTATION LOANS THAT WERE BEING SECURITIZED FORINVESTORS. CREDIT SUISSE FAILED TO DISCLOSE ITS EARLY PAYMENTDEFAULT SETTLEMENT PRACTICES.


ON DECEMBER 18, 2013, THE NEW JERSEY ATTORNEY GENERAL ONBEHALF OF THE NEW JERSEY BUREAU OF SECURITIES FILED A LAWSUITAGAINST CREDIT SUISSE SECURITIES (USA) LLC, CREDIT SUISSE FIRSTBOSTON MORTGAGE SECURITIES CORP., AND DLJ MORTGAGE CAPITAL(TOGETHER "CREDIT SUISSE") ALLEGING THAT CREDIT SUISSE MADEMATERIAL MISREPRESENTATIONS OR OMITTED TO DISCLOSE MATERIALFACTS AS WELL AS ENGAGED IN CERTAIN FRAUDULENT AND DECEPTIVEACTS IN OFFERING AND SELLING RESIDENTIAL MORTGAGE-BACKEDSECURITIES TO INSTITUTIONAL INVESTORS

Allegations:







Initiated By: JOHN J. HOFFMAN, ACTING ATTORNEY GENERAL OF NEW JERSEY ONBEHALF OF AMY KOPLETON, ACTING CHIEF OF THE NEW JERSEY BUREAUOF SECUR

Relief Sought: Restitution

Other Relief Sought: INJUNCTION, DISGORGEMENT, CIVIL PENALTIES/FINES, AND RESCISSION



Other Product Types: RESIDENTIAL MORTGAGE-BACKED

Court Details: SUPERIOR COURT OF NEW JERSEY, CHANCERY DIVISION, MERCERCOUNTY, NEW JERSEY, DOCKET NO. MER-C-000137-13.

ON DECEMBER 18, 2013, THE NEW JERSEY ATTORNEY GENERAL ONBEHALF OF THE NEW JERSEY BUREAU OF SECURITIES FILED A LAWSUITAGAINST CREDIT SUISSE SECURITIES (USA) LLC, CREDIT SUISSE FIRSTBOSTON MORTGAGE SECURITIES CORP., AND DLJ MORTGAGE CAPITAL(TOGETHER "CREDIT SUISSE") ALLEGING THAT CREDIT SUISSE MADEMATERIAL MISREPRESENTATIONS OR OMITTED TO DISCLOSE MATERIALFACTS AS WELL AS ENGAGED IN CERTAIN FRAUDULENT AND DECEPTIVEACTS IN OFFERING AND SELLING RESIDENTIAL MORTGAGE-BACKEDSECURITIES TO INSTITUTIONAL INVESTORS

Firm Statement ON DECEMBER 18, 2013, THE NEW JERSEY ATTORNEY GENERAL ONBEHALF OF THE NEW JERSEY BUREAU OF SECURITIES FILED A LAWSUITAGAINST CREDIT SUISSE SECURITIES (USA) LLC, CREDIT SUISSE FIRSTBOSTON MORTGAGE SECURITIES CORP., AND DLJ MORTGAGE CAPITAL(TOGETHER "CREDIT SUISSE") ALLEGING THAT CREDIT SUISSE MADEMATERIAL MISREPRESENTATIONS OR OMITTED TO DISCLOSE MATERIALFACTS AS WELL AS ENGAGED IN CERTAIN FRAUDULENT AND DECEPTIVEACTS IN OFFERING AND SELLING RESIDENTIAL MORTGAGE-BACKEDSECURITIES TO INSTITUTIONAL INVESTORS

Disclosure 4 of 6

i


ON NOVEMBER 20, 2012, THE NEW YORK ATTORNEY GENERAL ("NYAG")FILED A LAWSUIT AGAINST CREDIT SUISSE SECURITIES (USA) LLC, F/K/ACREDIT SUISSE FIRST BOSTON LLC, DLJ MORTGAGE CAPITAL, INC.,CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORPORATION,ASSET BACKED SECURITIES CORPORATION AND CREDIT SUISSEMORTGAGE ACCEPTANCE CORPORATION (TOGETHER "CREDIT SUISSE")ALLEGING THAT CREDIT SUISSE ENGAGED IN CERTAIN FRAUDULENT ANDDECEPTIVE ACTS IN PROMOTING AND SELLING RESIDENTIAL MORTGAGE-BACKED SECURITIES. IN PARTICULAR, THE NYAG ALLEGES THAT CREDITSUISSE MISREPRESENTED ITS DUE DILIGENCE AND QUALITY CONTROLPROCESSES.

Allegations:







Initiated By: PEOPLE OF THE STATE OF NEW YORK BY ERIC SCHNEIDERMAN,ATTORNEY GENERAL OF THE STATE OF NEW YORK


Other Relief Sought: DISGORGEMENT, MONEY DAMAGES, RESTITUTION, ACCOUNTING



Other Product Types: RESIDENTIAL MORTGAGE BACKED SECURITIES

Court Details: SUPREME COURT OF THE STATE OF NEW YORK, COUNTY OF NEW YORK,DOCKET/CASE NUMBER 451802/2012


Firm Statement ON NOVEMBER 20, 2012, THE NEW YORK ATTORNEY GENERAL ("NYAG")FILED A LAWSUIT AGAINST CREDIT SUISSE SECURITIES (USA) LLC, F/K/ACREDIT SUISSE FIRST BOSTON LLC, DLJ MORTGAGE CAPITAL, INC.,CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORPORATION,ASSET BACKED SECURITIES CORPORATION AND CREDIT SUISSEMORTGAGE ACCEPTANCE CORPORATION (TOGETHER "CREDIT SUISSE")ALLEGING THAT CREDIT SUISSE ENGAGED IN CERTAIN FRAUDULENT ANDDECEPTIVE ACTS IN PROMOTING AND SELLING RESIDENTIAL MORTGAGE-BACKED SECURITIES. IN PARTICULAR, THE NYAG ALLEGES THAT CREDITSUISSE MISREPRESENTED ITS DUE DILIGENCE AND QUALITY CONTROLPROCESSES

Disclosure 5 of 6

i


Initiated By: STATE OF WEST VIRGINIA (THE "STATE")

Court Details: THE CIRCUIT COURT OF MARSHALL COUNTY, WEST VIRGINIA: DOCKETNUMBER [ ]

THE STATE ALLEGES VIOLATIONS OF THE WEST VIRGINIA CONSUMERCREDIT AND PROTECTION ACT. THE STATE ALLEGES THAT, FROM 1999THROUGH 2001, CREDIT SUISSE FIRST BOSTON LLC ("CSFB") (1) CREATEDAND FOSTERED AN ENVIRONMENT WITH CONFLICTS OF INTEREST THAT,IN SOME CIRCUMSTANCES, UNDERMINED THE INDEPENDENCE OF EQUITYRESEARCH ANALYSTS AND AFFECTED THE OBJECTIVITY OF THEREPORTS THEY ISSUED AND (2) ENGAGED IN IMPROPER "SPINNING"ACTIVITIES RELATING TO INITIAL PUBLIC OFFERINGS THROUGH ITSTECHNOLOGY PRIVATE CLIENT SERVICES GROUP.

Allegations:


Appellate Court Name andDate Appeal Filed:

N/A






Relief Sought: Civil Penalty(ies)/Fine(s)




Other Product Types: RESEARCH AND EQUITY PUBLIC OFFERINGS

Court Details: THE CIRCUIT COURT OF MARSHALL COUNTY, WEST VIRGINIA: DOCKETNUMBER [ ]

Firm Statement IN A CIVIL ACTION BROUGHT BY THE SECURITIES AND EXCHANGECOMMISSION (THE "SEC") ON APRIL 28, 2003 AND RELATED REGULATORYACTIONS BY THE NASD, INC. (THE "NASD") AND THE NEW YORK STOCKEXCHANGE (THE "NYSE"), THE SEC, NASD AND NYSE ALLEGEDVIOLATIONS OF CERTAIN RULES AND REGULATIONS OF THE EXCHANGEACT, THE NASD AND THE NYSE BASED ON THE SAME MISCONDUCTALLEGED BY THE STATE'S ACTION. WITHOUT ADMITTING OR DENYINGTHE ALLEGATIONS BY THE SEC, NASD AND NYSE, CSFB SUBMITTEDCONSENTS IN THE AFOREMENTIONED CIVIL AND REGULATORY ACTIONSIN WHICH CSFB WAS PERMANENTLY ENJOINED FROM PRESCRIBEDVIOLATIONS OF THE RELEVANT RULES AND REGULATIONS. CSFB ALSOAGREED TO A TOTAL PAYMENT OF $200 MILLION AS FOLLOWS: $75 MILLIONAS A FINE; $75 MILLION AS DISGORGEMENT OF COMMISSIONS, FEES ANDOTHER MONIES; AND $50 MILLION TO BE USED FOR THE PROCUREMENTOF INDEPENDENT RESEARCH. ADDITIONALLY, AS A RESULT OF THECONSENTS, CSFB HAS MADE STRUCTURAL CHANGES TO ITS INVESTMENTBANKING AND EQUITY RESEARCH PRACTICES.

Disclosure 6 of 6

i



Relief Sought:




Court Details:

Allegations:








Relief Sought:


Regulator Statement 11-22-96, SEC NEWS DIGEST ISSUE NO. 96-222, DATED NOVEMBER 21,1996, ENFORCEMENT PROCEEDINGS DISCLOSE: "SEC INITIATES CIVILFRAUD ACTION AGAINST CS FIRST BOSTON CORPORATION AND TWO OFITSFORMER INVESTMENT BANKERS"; ON NOVEMBER 20, THE COMMISSIONANNOUCED THAT IT HAD FILED A COMPLAINT IN THE UNITED STATESDISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA AGAINSTCS FIRST BOSTON CORPORATION AND TWO OF ITS FORMER INVESTMENTBANKERS, JERRY L. NOWLIN AND DOUGLAS S. MONTAGUE FOR FRAUD INTHE OFFER AND SALE OF $110 MILLION IN SERIES B PENSIONOBLIGATION BONDS ISSUED BY ORANGE COUNTY, CALIFORNIA INSEPTEMBER 1994.

THE COMPLAINT ALLEGES THAT CS FIRST BOSTON, NOWLIN, ANDMONTAGUE MISLED INVESTORS CONCERNING THE ORANGE COUNTYINVESTMENT POOLS (COUNTY POOLS), PARTICULARLY THE COUNTYPOOLS'INVESTMENT STRATEGY, THE RISKS OF THAT STRATEGY, AND THECOUNTYPOOLS' INVESTMENT LOSSES.

THE COMPLAINT ALLEGES THAT WHILE PARTICIPATING IN DRAFTING ANDPREPARING THE OFFERING DOCUMENT KNOWN AS THE OFFICIALSTATEMENT, CS FIRST BOSTON, NOWLIN AND MONTAGUE KNEW, ORWERERECKLESS IN NOT KNOWING, SIGNIFICANT NEGATIVE INFORMATIONABOUTTHE COUNTY POOLS THAT WAS MISREPRESENTED IN OR OMITTED FROMTHEOFFICIAL STATEMENT. DESPITE THIS KNOWLEDGE, CS FIRST BOSTON,NOWLIN, AND MONTAGUE FAILED TO DILIGENTLY INQUIRE INTO THESEMATTERS AND OTHERWISE TAKE STEPS TO ASSURE THAT THE OFFICIALSTATEMENT'S DISCLOSURE CONCERNING THE COUNTY POOLS WAS NOTFALSE OR MISLEADING. THE COMMISSION IS SEEKING PERMANENTINJUNCTIONS AND CIVIL PENALTIES AGAINST EACH OF THE DEFENDANTS.[SEC V. CS FIRST BOSTON CORPORATION, ET AL., CIVIL ACTION NO.96-8124, JGD, CTX] (LR-15160)


SEC FILED A COMPLAINT AGAINST CS FIRST BOSTON CORPORATION FORFRAUD IN THE OFFER AND SALE OF $110 MILLION IN SERIES B PENSIONOBLIGATION BONDS ISSUED BY ORANGE COUNTY, CALIFORNIA INSEPTEMBER 1994.

Allegations:







Initiated By: U.S. SECURITIES AND EXCHANGE COMMISSION ("SEC").

Relief Sought:





Court Details: UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OFCALIFORNIA; CIVIL ACTION NO. 96-8124, JGD, CTX.

SEC FILED A COMPLAINT AGAINST CS FIRST BOSTON CORPORATION FORFRAUD IN THE OFFER AND SALE OF $110 MILLION IN SERIES B PENSIONOBLIGATION BONDS ISSUED BY ORANGE COUNTY, CALIFORNIA INSEPTEMBER 1994.

Allegations:


Firm Statement CS FIRST BOSTON CORPORATION OFFERED TO SETTLE THE ACTION BYCONSENTING TO AN ORDER TO CEASE AND DESIST FROM COMMITTINGOR CAUSING ANY VIOLATIONS OF SECTIONS 17(A) (2) AND (3) OF THESECURITIES ACT, SECTION 15B(C) (1) OF THE EXCHANGE ACT, AND MSRBRULE G-17. THE SEC AGREED TO DISMISS ITS PREVIOUSLY FILEDINJUNCTIVE ACTION AGAINST FIRST BOSTON.






Arbitration Award - Award / Judgment

Brokerage firms are not required to report arbitration claims filed against them by customers; however, BrokerCheckprovides summary information regarding FINRA arbitration awards involving securities and commodities disputesbetween public customers and registered securities firms in this section of the report. The full text of arbitration awards issued by FINRA is available at www.finra.org/awardsonline.

Disclosure 1 of 9


Type of Event: ARBITRATION

Arbitration Forum:

Case Initiated:

Case Number:

Allegations:

Disputed Product Type:

Sum of All Relief Requested:

Disposition:

Disposition Date:

Sum of All Relief Awarded:

NASD

01/03/2007

06-05368

ACCOUNT RELATED-OTHER; DO NOT USE-NO OTHER CONTROVERSYINVOLVED

COMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE

Unspecified Damages

AWARD AGAINST PARTY

10/15/2008

$0.00

There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.

Disclosure 2 of 9

i



Arbitration Forum:

Case Initiated:

Case Number:

Allegations:


FINRA

02/25/2008

08-00512

ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT RELATED-BREACH OF CONTRACT;ACCOUNT RELATED-NEGLIGENCE

AUCTION RATE SECURITIES; DO NOT USE-NO OTHER TYPE OF SECINVOLVE; UNKNOWN TYPE OF SECURITIES





www.finra.org/awardsonline

https://www.finra.org/arbitration-mediation/arbitration-awards-online?search=06-05368





Disposition:

Disposition Date:


AUCTION RATE SECURITIES; DO NOT USE-NO OTHER TYPE OF SECINVOLVE; UNKNOWN TYPE OF SECURITIES

Unspecified Damages

AWARD AGAINST PARTY

02/12/2009

$406,628,619.01


Disclosure 3 of 9

i



Arbitration Forum:

Case Initiated:

Case Number:

Allegations:



Disposition:

Disposition Date:


FINRA

11/17/2008

08-04007

ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-OMISSION OF FACTS;ACCOUNT RELATED-NEGLIGENCE

AUCTION RATE SECURITIES; DO NOT USE-NO OTHER TYPE OF SECINVOLVE; MUNICIPAL BONDS

$8,850,000.00

AWARD AGAINST PARTY

05/21/2010

$0.00


Disclosure 4 of 9

i



Arbitration Forum:

Allegations:

FINRA

ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-OMISSIONOF FACTS; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT RELATED-NEGLIGENCE







Arbitration Forum:

Case Initiated:

Case Number:



Disposition:

Disposition Date:


FINRA

02/26/2009

09-00950

AUCTION RATE SECURITIES; DO NOT USE-NO OTHER TYPE OF SECINVOLVE

$36,925,000.00

AWARD AGAINST PARTY

05/27/2010

$9,750,000.01


Disclosure 5 of 9

i



Arbitration Forum:

Case Initiated:

Case Number:

Allegations:



Disposition:

Disposition Date:


FINRA

05/27/2009

09-02906

ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT RELATED-BREACHOF CONTRACT; ACCOUNT RELATED-FAILURE TO SUPERVISE; ACCOUNTRELATED-NEGLIGENCE

COLLATERALIZED DEBT OBLIGATIONS; REAL ESTATE INVESTMENT TRUST

Unspecified Damages

AWARD AGAINST PARTY

04/08/2011

$766,935.03


Disclosure 6 of 9

i










Arbitration Forum:

Case Initiated:

Case Number:

Allegations:



Disposition:

Disposition Date:


FINRA

07/16/2010

10-03091

ACCOUNT RELATED-BREACH OF CONTRACT

MUNICIPAL BONDS; STRUCTURED PRODUCTS

$4,380,000.00

AWARD AGAINST PARTY

05/04/2011

$250,000.00


Disclosure 7 of 9

i



Arbitration Forum:

Case Initiated:

Case Number:

Allegations:



Disposition:

Disposition Date:


NASD

12/03/1992

92-03578

ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT RELATED-BREACHOF CONTRACT; ACCOUNT RELATED-FAILURE TO SUPERVISE; ACCOUNTRELATED-NEGLIGENCE

DO NOT USE-NO OTHER TYPE OF SEC INVOLVE; PREFERRED STOCK

$200,000.00

AWARD AGAINST PARTY

01/21/1994

$38,250.00


Disclosure 8 of 9

i










Arbitration Forum:

Case Initiated:

Case Number:

Allegations:



Disposition:

Disposition Date:


NASD

01/13/1995

94-05105

ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-OMISSION OF FACTS;ACCOUNT ACTIVITY-SUITABILITY

DO NOT USE-NO OTHER TYPE OF SEC INVOLVE; OTHER TYPES OFSECURITIES

$15,000,000.00

AWARD AGAINST PARTY

11/01/1996

$3,798,200.00


Disclosure 9 of 9

i



Arbitration Forum:

Case Initiated:

Case Number:

Allegations:



Disposition:

Disposition Date:


NASD

04/27/1995

95-01622

ACCOUNT ACTIVITY-OMISSION OF FACTS; ACCOUNT ACTIVITY-OTHER;ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT RELATED-NEGLIGENCE

DO NOT USE-NO OTHER TYPE OF SEC INVOLVE; REPURCHASEAGREEMENTS

$892,636.88

AWARD AGAINST PARTY

07/31/1996

$360,000.00

There may be a non-monetary award associated with this arbitration.








Please select the Case Number above to view more detailed information.






End of Report

This page is intentionally left blank.





Documents

CREDIT SUISSE SECURITIES (USA) LLC - FINRABrokerCheck Report CREDIT SUISSE SECURITIES (USA) LLC Section Title Report Summary Firm History CRD# 816 1 11 Firm Profile 2 - 10 Page(s)