Credit Suisse sacks traders over "mispricing"
Credit Suisse, Switzerland's second biggest bank, said it had sacked a number of traders Thursday for "intentional misconduct," namely pricing errors.
21 March 2008
Zurich (dpa) - Credit Suisse, Switzerland's second biggest bank, said it had sacked a number of traders Thursday for "intentional misconduct," namely pricing errors.
The news came as the bank revalued total writedowns at CHF2.86 billion.
[Copyright dpa 2008
In a statement, the bank said it was likely to make a loss for the first quarter of this year for the first time in almost five years due to writedowns on debt securities as well as "difficult" market conditions.
The losses related to the fourth quarter of 2007, and to the first quarter of 2008. Net income for 2007 had been cut to 7.8 billion, down 6% on the previous record year.
The bank said a small number of traders had also been "terminated or suspended" for "intentional misconduct" due to mispricing.
The move followed completion of an internal review revaluing certain asset-backed security positions in the Collateralized Debt Obligations (CDO) trading business within its Investment Banking division. It also found existing controls had failed.
Chief Executive Officer of Credit Suisse Group Brady Dougan said: "This incident is unacceptable and it does not represent the high standard of Credit Suisse. Our overall control framework remains sound. We are taking strong action to remediate and move forward."
The country's biggest bank, UBS, remains the hardest hit in Switzerland by the US subprime crisis. It was forced to write down CHF20 billion last year.