£6m fine for bank which lost control

A private bank which manages money for wealthy investors has been fined £5.95m for failing to have effective systems in place to make sure they were given suitable advice.

Credit Suisse UK advised 623 of its customers to invest in complex Structured Capital at Risk investments, called SCARPS, putting £1bn at risk.

The investments averaged £1.8m per investor.

The Financial Services Authority found that the bank had poor records and insufficient safety checks on the advice, which had been given over a 3 year period between 2007 and 2009..

When FSA staff made a regular visit, Credit Suisse wasn't able to show that customers had been advised correctly or had an appetite for the level of risk involved.

The bank will now have to review the cases and compensate anyone who has lost out because of the failings.

The FSA said the failings were particularly serious because of Credit Suisse's leading role in private banking and the amount of money involved.

The bank agreed to settle at an early stage, otherwise the fine would have been £8.5m.

It's not the first time Credit Suisse has incurred a hefty fine from the FSA.

It was docked £5.6m in 2008 for failing to conduct business with due skill, care and diligence.