Credit Suisse Securities (USA) LLC and a former investment adviser representative agreed to pay about $8 million to settle the SEC's charges that they improperly invested clients in more expensive class A shares of mutual funds rather than less expensive institutional shares for which they were eligible.
According to the SEC, Credit Suisse collected about $3.2 million in avoidable fees from 2009 to 2014. About $2.5 million of that was generated from the advisory clients of Sanford Katz, a former managing director and relationship manager in the company's San Francisco office. Credit Suisse also failed to implement policies to prevent the fiduciary breaches.
Without admitting or denying the SEC's findings, Credit Suisse and Katz will collectively pay disgorgement of about $3.2 million, prejudgment interest of $577,678 and penalties of about $4.1 million.