Credit Suisse Securities Ordered by FINRA Panel to Pay $406 Million for Improper ARS Sale to Semiconductor Manufacturer STMicroelectronics NV
A Financial Industry Regulatory Authority Panel says Credit Suisse Securities must pay STMicroelectronics $406 million. The award, issued in favor of the semiconductor manufacturer, is over Credit Suisse Securities's sale of unauthorized auction rate securities. Consequential damages and legal fees are also part of the FINRA award. STMicroelectronics also gets to keep some $25 million in interest award.
STMicroelectronics N.V. had filed for arbitration because Credit Suisse had made unauthorized purchases of credit link notes and collateralized debt obligations when it should have bought student loan securities that were Federally guaranteed, which was what the semiconductor company had mandated and authorized. STMicroelectronics N.V. says Credit Suisse Group engaged in fraud because of its actions.
Also, in STMicroelectronics's securities fraud lawsuit against Credit Suisse Group, which was filed last year, the semiconductor company alleged that Credit Suisse purposely set out to defraud the company. It also claims that transferring clients’ accounts into auction-rate securities was part of a plan to receive higher fees for the service it was providing.
FINRA Arbitration
FINRA provides a dispute resolution forum for business disputes between investors, individual registered representatives, and securities firms. Recent FINRA dispute resolution statistics through January 2009:
• 525 cases filed through January 2009
• 267 cases were closed
FINRA Dispute Resolution has the biggest securities dispute resolution forum in the world. FINRA oversees nearly all such mediations and arbitrations in the United States.
STMicroelectronics Sues Credit Suisse Over Securities, The New York Times, August 7, 2008
FINRA Awards STMicroelectronics $406 Million Against Credit Suisse Securities (USA) LLC, PRNewswire.com, February 16, 2009
Related Web Resources:
STMicroeiectronics N.V. (Claimant) vs. Credit Suisse Securities (USA) LLC
(Respondent), Case Number: 08-00512, FINRA
As Shepherd, Smith, Edwards & Kantas, LLP, our securities fraud attorneys have helped many clients receive the outcome that they wanted through FINRA arbitration and in the US Courts. Please contact our stockbroker fraud law firm to ask for your free case evaluation.
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