Credit Suisse Group was ordered to pay a $400 million arbitration award to STMicroelectronics NV, after the Swiss semiconductor maker alleged Credit Suisse mishandled its investment in auction-rate securities, according to the Financial Industry Regulatory Authority.
Finra -- formed by the merger of the National Association of Securities Dealers and a New York Stock Exchange regulatory arm -- also ordered the bank to pay $3 million in attorney and expert-witness fees, $1.5 million in financing fees and interest on the original value of the ARS until the award is paid.
An STMicro spokesman declined to comment.
In a statement, Credit Suisse said: "We respectfully disagree with the arbitration panel's award and are reviewing our legal options."
According to its complaint to Finra, STMicro wanted to invest in student-loan securities backed by U.S. government guarantees. Instead, its funds were put into collateralized debt obligations, some of which were backed by subprime real-estate loans.
Two former Credit Suisse brokers last year were indicted on fraud charges based on allegations they lied to investors, including STMicro, about how they placed their money in ARS tied to subprime mortgages. They pleaded not guilty.
No comments:
Post a Comment