Tokyo - Credit Suisse Group AG became the second global bank to be penalised in Japan for leaking information about a company’s earnings, amid a regulatory probe that has raised questions about how brokerages handle stock research in the country.
The Financial Services Agency ordered the bank’s Japanese securities unit to improve its internal controls and compliance, the regulator said in a statement on Monday. The firm has to submit a report by June 3. A spokeswoman for Credit Suisse in Japan wasn’t immediately available to comment.
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An equity research analyst at Credit Suisse gave non-public information on a company’s earnings forecast to a customer and a colleague in the sales division, who then used it to solicit clients, the FSA’s securities watchdog said when it recommended action against the firm earlier this month. Deutsche Bank AG’s Japanese unit was sanctioned for a similar leak in December.
Japanese authorities are grappling with how brokerages should treat information obtained on the companies they cover to ensure all investors have fair access to it. Nomura Holdings and Mizuho Financial Group are among firms that have been paring their equity research before earnings seasons amid the lack of clarity over what information can be shared and with whom.
Credit Suisse said last week that it will no longer allow its analysts to visit companies to gather intelligence before they report financial results. It also decided against holding a conference for investors this month, an event that usually takes place twice a year in April and October before the results seasons.
BLOOMBERG