Before You Invest Your Money » Credit Suisse Group

Credit Suisse CEO Earns $17.9 Million

Before You Invest — Mon, 29 Mar 2010 03:58:00 +0000

Credit Suisse Group Chief Executive Brady Dougan got $17.9 million for 2009, the Swiss bank said Thursday. The payout was more than six times what he got in 2008, reflecting Credit Suisse’s swift recovery from the financial crisis.

Mr. Dougan’s pay for 2009 was nearly double the $9.6 million that Goldman Sachs Group paid CEO Lloyd Blankfein, even though Goldman made 40% more in net income last year than Credit Suisse.

Credit Suisse CEO Earns $17.9 Million is a post from: Before You Invest Your Money

Credit Suisse Ordered to Pay FINRA Arbitration Award

Before You Invest — Thu, 25 Mar 2010 21:19:00 +0000

Credit Suisse Group AG, the largest bank in Switzerland by market value, was ordered by a U.S. judge to pay STMicroelectronics NV the remainder of a $431 million award over unauthorized investments in auction-rate securities.

The arbitration award, ordered in 2009 by the Financial Industry Regulatory Authority, was affirmed on March 19 by U.S. District Judge Deborah Batts in New York, who cited a “record replete with evidence of Credit Suisse’s fraud.”

“Credit Suisse has grasped unsuccessfully at straws to avoid payment of the arbitration award in this case,” Batts said in the ruling. The unpaid balance is about $354 million, including $23 million in interest, Geneva-based STMicroelectronics said today in a statement.

Europe’s largest semiconductor maker, which hired Credit Suisse to make investments for the company, accused the bank of investing in risky securities after claiming it would only invest in student loans backed by the U.S. government. STMicroelectronics sued when the value of the securities fell and in February 2009 won an arbitration award before the Washington-based regulator, known as FINRA.

“We respectfully disagree with the court’s choice and are evaluating an appeal,” Alex Biscaro, a spokesman for Zurich-based Credit Suisse, said today in an e-mailed statement.

At least 19 underwriters and broker-dealers were sued in class-action, or group, lawsuits since the $330 billion market for auction-rate securities collapsed in February 2008. Some have been compelled by regulators to buy back billions of dollars of the securities.

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Julian Tzolov apprehended by Department of Justice

Before You Invest — Wed, 15 Jul 2009 18:44:00 +0000

(Bloomberg) — Julian Tzolov, the fugitive former Credit Suisse Group AG broker who was charged with bail jumping, has been arrested, Assistant Brooklyn U.S. Attorney Daniel Spector said in a letter to court filed today. Authorities in Marbella, Spain have taken Tzolov into custody following an international manhunt after he disappeared in New York in May.

Tzolov, who’s accused of fraudulently selling clients subprime mortgages linked to auction-rate securities, was declared a fugitive in June. He is accused of a $400 million fraud.

The arrest comes as U.S. prosecutors filed new charges against former Credit Suisse broker Eric Butler, who is scheduled to go to trial next week for fraudulently selling clients subprime mortgages linked to auction-rate securities.

Butler and Tzolov were accused yesterday in a 14-count indictment in federal court in New York of wire fraud in an illegal scheme to sell securities. Butler is scheduled for trial on July 20 in the original case.

Julian Tzolov, 35, was arrested Sept. 4, 2008 at Kennedy Airport after returning from his native Bulgaria to face charges. Since then he has been free on $3 million bail. He was wearing an electronic monitoring bracelet around his ankle when he left his Fifth Ave. apartment on May 9.

Julian Tzolov apprehended by Department of Justice is a post from: Before You Invest Your Money

CME rival ELX set to launch, but bad blood could mar debut

Before You Invest — Wed, 27 May 2009 17:40:00 +0000

(Crain’s) — CME Group Inc. rival ELX Futures L.P. got the regulatory green light to open an electronic exchange offering futures on U.S. Treasuries.

On board for the plotted June launch will be ELX’s founders — including BCG Partners Inc., Citadel Investment Group, Citigroup Inc., Deutsche Bank A.G., Bank of America-Merrill Lynch, Barclays PLC, Credit Suisse Group, Getco, J. P. Morgan Chase & Co., Peak6, and Royal Bank of Scotland PLC — as well as a number of high-volume traders that ELX has signed on, executives say.

“We are confident that ELX Futures will be a strong and needed competitive alternative in the mainstream futures exchange marketplace that will benefit all market participants,” CEO Neal Wolkoff said in a statement Wednesday announcing approval by the Commodity Futures Trading Commission.

But terrible blood between a Chicago software executive and one of ELX’s New York-based founders may keep some traders from accessing the new market.

Harris Brumfield, a former Treasury futures floor trader at the CME-owned Chicago Board of Trade, sued BCG Co-CEO Howard Lutnick several years ago over alleged patent infringement. Mr. Brumfield, who runs software firm Trading Technologies International Inc., claimed that Mr. Lutnick’s firm, known at the time as eSpeed Inc., illegally copied Mr. Brumfield’s software. The courts sided with Mr. Lutnick.

Now, Mr. Lutnick’s firm is the technology provider to ELX. And Mr. Brumfield — whose Web site claims that half of the volume at the world’s five largest exchanges goes through Trading Technologies’ trading platform — has refused to connect to the fledgling exchange.

A Trading Technologies saleswoman in March acknowledged that Mr. Brumfield’s past run-in with Mr. Lutnick was hampering talks. This month she declined to comment. Mr. Wolkoff likewise declined to comment on the relationship.

Other ELX officials say that Trading Technologies doesn’t account for as much trading as it claims and that ELX’s start won’t be hampered by its refusal to sign on because other software providers are writing to the exchange.

Software dustups aside, it’s clear that ELX is up against fantastic odds. At least three prior startups have tried and failed to wrest marketshare from the established Treasury futures market at the Chicago Board of Trade.

But the recent success dealers had in moving liquidity in a key part of the mortgage business, known as “to be announced bonds,” from a platform run by broker-dealer ICAP PLC to one controlled by the dealers themselves is being touted as a potential model for the new exchange.

ELX is expected to announce pricing for the new market in coming weeks.

CME rival ELX set to launch, but bad blood could mar debut is a post from: Before You Invest Your Money

Large Recent FINRA Arbitration Awards A Sign?

Before You Invest — Sun, 05 Apr 2009 15:38:00 +0000

Finra securities arbitration panels have handed investors two huge wins in recent months, but lawyers and industry observers are divided about whether such noticeable awards signal favorably for investors.

Regardless, the awards — from the three-member panels of the Financial Industry Regulatory Authority Inc. of New York and Washington — are among the largest ever.

Last month, Merrill Lynch & Co. Inc. was ordered to pay $39.8 million to a group affiliated with the Freemasons in a case that stemmed from the collapse of Refco Inc.

The arbitration panel ruled that Merrill Lynch of New York must pay $30.6 million in compensatory hurts — plus interest — to the Trustees of the Masonic Hall and Asylum Fund in Utica, N.Y.

The interest on the claim started accruing in November 2005 and totals $9.2 million.

In February, STMicroelectronics, a chip maker based in Geneva, was awarded $406 million by a Finra arbitration panel in a dispute with Credit Suisse Group Inc. of Zurich, Switzerland, over the unauthorized buy of auction rate securities.

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Ex Credit Suisse Brokers Face New Subprime Related Charges

Before You Invest — Thu, 02 Apr 2009 16:37:00 +0000

Two former Credit Suisse Group AG brokers accused of fraudulently selling clients subprime mortgages linked to auction-rate securities pleaded not guilty to a dozen new fraud charges.

Julian Tzolov and Eric Butler were first indicted last year on securities fraud and conspiracy charges in U.S. District Court in Brooklyn, New York. They are accused of falsely telling clients their products were backed by federally guaranteed student loans, according to a U.S. indictment filed in September. They allegedly said the investments were a safe alternative to bank deposits or money market funds.

The new charges include wire fraud stemming from e-mails the defendants sent. Tzolov and Butler, who remain free on bond pending trial, were also charged with conspiracy. Without telling customers, they allegedly started using client funds to buy higher-yield, mortgage-backed collateralized debt obligations, known as CDOs, according to the indictment.

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Credit Suisse Found Liable and Order to Pay Institutional Investor $400 Million for Auction Rate Recomendation

Before You Invest — Sun, 15 Feb 2009 17:54:00 +0000

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 place 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.

Credit Suisse Found Liable and Order to Pay Institutional Investor $400 Million for Auction Rate Recomendation is a post from: Before You Invest Your Money