Global banking giant UBS has been fined more than a quarter billion dollars for misconduct at Credit Suisse, its new subsidiary acquired in June.
In a press release from the Board of Governors of the Federal Reserve, the Fed says the charges are centered on Credit Suisse’s “unsafe and unsound counterparty credit risk management practices” with Archegos, a family office that collapsed in March of 2021.
Archegos, which represented the personal assets of Korean American investor Bill Hwang, was worth $36 billion at its height before going under due to overly aggressive leverage and bad trades. Bloomberg reported that Hwang lost $20 billion in under two days.
Because of its relationship with Hwang, Credit Suisse suffered roughly $5.5 billion in losses due to Archegos’ default, something the Fed says would have been avoidable with proper credit risk management.
“During Credit Suisse’s relationship with Archegos, Credit Suisse failed to adequately manage the risk posed by Archegos despite repeated warnings.
The Board is requiring Credit Suisse to improve counterparty credit risk management practices and to address additional longstanding deficiencies in other risk management programs at Credit Suisse’s U.S. operations.”
The Board of Governor’s fine against UBS is being issued in conjunction with the Swiss Financial Market Supervisory Authority and the Bank of England’s Prudential Regulation Authority.
UBS, which has $3.1 trillion in assets under management, is also being ordered by the Fed to take appropriate steps to ensure that its subsidiaries and branches of Credit Suisse operate in a safe manner, complies with regulations, and addresses supervisory action taken by federal and state supervisors.Don't Miss a Beat – Subscribe to get email alerts delivered directly to your inbox
Check Price Action
Follow us on Twitter, Facebook and Telegram
Surf The Daily Hodl Mix
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Generated Image: Midjourney