(Bloomberg) -- Credit Suisse Group agreed to pay $197 million and admitted that it improperly solicited thousands of American clients, ending a U.S. regulatory probe while a broader criminal investigation of tax evasion still looms.

The bank collected about $82  million in fees and amassed as many as 8,500  U.S.  client accounts from at least 2002 through 2008, the  SEC said in an administrative order today. The accounts held an average total of $5.6 billion in securities assets, the  SEC said.

Credit Suisse has been ensnared in a wider Justice Department probe for the past three years into Americans’ use of off-shore bank accounts to avoid taxes. Eight bankers, including  Credit Suisse’s former head of North America offshore banking, were charged in 2011 with conspiring to help American clients evade taxes through secret bank accounts.

“As  Credit Suisse admitted as part of the settlement, its employees for many years failed to comply with these requirements, and the firm took far too long to achieve compliance,” Andrew Ceresney, director of the SEC’s enforcement division, said in the statement. “The broker-dealer and investment advisor registration provisions are core protections for investors.”

The Zurich-based lender set aside 295  million francs ($332  million) in 2011 for  U.S. tax matters in addition to funds set apart for the  SEC matter.


The  U.S. Senate Permanent Subcommittee on Investigations will hold a hearing on Feb. 26 on the status of the tax evasion crackdown that has stalled as prosecutors conduct criminal probes of 14 banks, including  Credit Suisse. Witnesses will represent an unidentified Swiss bank and the Justice Department, the committee said.

“We are pleased to have resolved this issue with the  SEC,”  Credit Suisse said in a statement. “The Department of Justice investigation into tax-related issues remains outstanding, and while we continue to work to resolve this matter, the timing and outcome remain uncertain.”

The settlement today includes almost $82.2  million in disgorgement, $64.3  million in prejudgment interest and a $50  million penalty.

“This isn’t the end game,” said Christopher Wheeler, a London-based analyst at Mediobanca SpA. “The Department of Justice probe can potentially result in a lot bigger fine.”

Credit Suisse admitted to the facts in the  SEC order, which concluded that the bank “willfully violated” securities laws, and agreed to hire an independent consultant, according to the regulator.


“It’s been a long-running issue, something that we’ve been working hard on,” Chief Executive Officer Brady Dougan said in a Bloomberg Television interview this month.

UBS, Switzerland’s biggest bank, avoided criminal prosecution on tax matters by paying $780  millionand handing over data on American clients in 2009. UBS paid $200  million of the total amount to the SEC as part of the deferred prosecution agreement.

The UBS  case prompted thousands of Americans to declare previously secret accounts through an IRS amnesty program.

Some 106 Swiss banks not under individual probes applied for amnesty in the  U.S. for helping tax evaders under a program negotiated by the two governments, a  U.S. federal prosecutor said last month. The program requires participants to disclose how they helped Americans hide assets, hand over data on undeclared accounts and  pay penalties.

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