The Securities and Exchange Commission today charged Credit Suisse Securities (USA) LLC with submitting deficient information to the agency over a two-year period about trades done by its customers, commonly referred to as “blue sheet data.”
Credit Suisse Securities (USA) LLC, which is headquartered in New York, New York, agreed to settle the charges by paying a $4.25 million penalty and admitting it violated the recordkeeping and reporting provisions of the federal securities laws. It also agreed to be censured and to cease and desist future violations of the books and records provisions of the federal securities laws.
According to the SEC’s order instituting settled administrative proceedings, broker-dealers like Credit Suisse are required upon request to electronically provide the SEC with blue sheet data so the agency can use it to identify and analyze trades in the course of investigations and other work. The term “blue sheet” stems from the color of the forms originally mailed to broker-dealers to complete and return to the SEC. The process shifted to an electronic format in the 1980s.
“Accurate and complete blue sheet data is essential to the Commission’s efforts to detect many forms of unlawful conduct,” said Sharon B. Binger, Director of the Philadelphia Regional Office. “We will continue to hold broker-dealers who fail to comply with their obligation to provide the Commission with reliable blue sheet data accountable for their failure.”
Credit Suisse admitted to the findings in the SEC’s order that from January 2012 to January 2014, it made at least 593 deficient blue sheet submissions to the SEC, omitting more than 553,400 reportable trades representing 1.3 billion shares. Credit Suisse identified certain technological and human errors as the root cause of the deficient blue sheet submissions. Credit Suisse subsequently implemented several changes designed to ensure the accuracy of its blue sheets, including measures to prevent, detect, and correct blue sheet data errors.
The SEC’s investigation was conducted by Lawrence Parrish, Daniel Koster, and Kingdon Kase of the Philadelphia Regional Office. The case was supervised by G. Jeffrey Boujoukos. The SEC appreciates the assistance of the Financial Industry Regulatory Authority.