In re Credit Suisse Securities

UNITED STATES OF AMERICA 
Before the 
SECURITIES AND EXCHANGE COMMISSION 
 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 99158 / December 13, 2023 
 
INVESTMENT ADVISERS ACT OF 1940 
Release No. 6504 / December 13, 2023 
 
INVESTMENT COMPANY ACT OF 1940 
Release No. 35067 / December 13, 2023 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-21811 
 
 
In the Matter of 
 
Credit Suisse Securities 
(USA) LLC;  
Credit Suisse Asset 
Management, LLC; and 
Credit Suisse Asset 
Management Limited, 
 
Respondents. 
 
 
 
 
 
 
ORDER INSTITUTING 
ADMINISTRATIVE AND CEASE-AND-
DESIST PROCEEDINGS PURSUANT TO 
SECTION 15(b) OF THE SECURITIES 
EXCHANGE ACT OF 1934, SECTION 
203(e) OF THE INVESTMENT ADVISERS 
ACT OF 1940, AND SECTIONS 9(b) AND 
9(f) OF THE INVESTMENT COMPANY 
ACT OF 1940, MAKING FINDINGS, AND 
IMPOSING REMEDIAL SANCTIONS 
AND A CEASE-AND-DESIST ORDER 
  
I. 
 The Securities and Exchange Commission (“Commission”) deems it appropriate and in the 
public interest that public administrative and cease-and-desist proceedings be, and hereby are, 
instituted pursuant to Section 15(b) of the Securities Exchange Act of 1934 (“Exchange Act”), 
Section 203(e) of the Investment Advisers Act of 1940 (“Advisers Act”), and Sections 9(b) and 
9(f) of the Investment Company Act of 1940 (“Investment Company Act”), against Credit Suisse 
Securities (USA) LLC (“CSS”), Credit Suisse Asset Management, LLC (“CSAM”), and Credit 
Suisse Asset Management Limited (“CSAM Ltd.”) (collectively, “Respondents”). 
II. 
 In anticipation of the institution of these proceedings, Respondents have submitted an Offer 
of Settlement (the “Offer”) which the Commission has determined to accept. Solely for the purpose 

 2 
of these proceedings and any other proceedings brought by or on behalf of the Commission, or to 
which the Commission is a party, and without admitting or denying the findings herein, except as 
to the Commission’s jurisdiction over them and the subject matter of these proceedings, which are 
admitted, Respondents consent to the entry of this Order Instituting Administrative and Cease-and-
Desist Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934, Section 
203(e) of the Investment Advisers Act of 1940, and Sections 9(b) and 9(f) of the Investment 
Company Act of 1940, Making Findings, and Imposing Remedial Sanctions and a Cease-and-
Desist Order (“Order”), as set forth below.  
III. 
 On the basis of this Order and Respondents’ Offer, the Commission finds that: 
Summary 
1. From October 24, 2022 to June 7, 2023 (“Relevant Period”), Respondents 
unlawfully served or acted as an investment adviser or principal underwriter to registered 
investment companies and/or employees’ securities companies (“ESCs”). A New Jersey state court 
order issued on October 24, 2022 caused Respondents to be deemed ineligible to provide services 
to registered investment companies and ESCs under Section 9(a) of the Investment Company Act. 
During the Relevant Period, Respondents acted as an investment adviser or principal underwriter 
to registered investment companies or ESCs in violation of the ineligibility provisions of the 
Investment Company Act. 
Respondents 
2. Credit Suisse Securities (USA) LLC, a Delaware limited liability company 
headquartered in New York, New York, is a wholly-owned subsidiary of UBS Group AG (“UBS 
Group”), a public foreign bank holding company headquartered in Switzerland. CSS has been 
registered with the Commission as a broker-dealer since 1936 and as an investment adviser since 
1999, and had $785 million of regulatory assets under management as of December 31, 2022. CSS 
acts as principal underwriter to certain open-end investment companies registered under the 
Investment Company Act. 
3. Credit Suisse Asset Management, LLC, a Delaware limited liability company 
headquartered in New York, New York, is a wholly-owned subsidiary of UBS Group, and is an 
affiliate of CSS. CSAM has been registered with the Commission as an investment adviser since 
1990 and had $65.37 billion of regulatory assets under management as of December 31, 2022. 
CSAM acts as an investment adviser to certain investment companies registered under the 
Investment Company Act and certain ESCs. 
4. Credit Suisse Asset Management Limited, a British corporation, is an indirect, 
wholly-owned subsidiary of UBS Group, and is an affiliate of CSS. CSAM Ltd. has been 
registered with the Commission as an investment adviser since 1991, and had $11.65 billion of 
regulatory assets under management as of December 31, 2022. CSAM Ltd. acts as an investment 
adviser to certain investment companies registered under the Investment Company Act. 

 3 
Background 
5. On December 17, 2013, the Acting Attorney General of New Jersey on behalf of 
the Acting Chief of the New Jersey Bureau of Securities filed a complaint in the Superior Court of 
New Jersey, Mercer County Chancery Division, against CSS and two of its affiliates (“New Jersey 
Action”), alleging CSS violated Sections 49:3-52(b) and (c) of the New Jersey Uniform Securities 
Law in connection with its role as the underwriter of certain residential mortgage backed securities 
trust certificates. These sections of the New Jersey Uniform Securities Law prohibit making 
materially false and misleading statements and/or omitting material facts in statements to investors 
and engaging in any act or practice which would operate as a fraud or deceit upon any person in 
connection with the offer, sale or purchase of securities. 
6. On October 24, 2022, the Superior Court of New Jersey entered a consent order 
(“Consent Order”) and final judgment in the New Jersey Action that, in relevant part, ordered 
permanent relief under N.J.S.A. 49:3-69 that CSS “shall not violate” the New Jersey Uniform 
Securities Law, N.J.S.A. 49:3-47, et seq. On November 14, 2022, Respondents voluntarily notified 
the staff of the Commission regarding the entry of the Consent Order. 
7. When the Consent Order was entered, the Respondents had not sought or obtained 
exemptive relief from Section 9(a) of the Investment Company Act. The Respondents continued to 
serve as investment advisers or principal underwriters to registered investment companies and/or 
ESCs after the entry of the Consent Order based on their position at the time that the Consent 
Order did not trigger the disqualification provisions of Section 9(a) of the Investment Company 
Act. 
8. On June 7, 2023, the Respondents applied for and the Commission issued a 
temporary order with the effect of, among other things, providing the Respondents and certain of 
their affiliates with a time-limited exemption from Section 9(a) of the Investment Company Act. 
9. On June 12, 2023, the Respondents were acquired by UBS Group as part of UBS 
Group’s merger with Credit Suisse Group AG, with UBS Group remaining as the surviving 
company. On July 5, 2023, the Commission issued a permanent order that provided UBS Group 
and certain of its affiliates, which became affiliates of Respondents upon the closing of the merger, 
with a permanent exemption from Section 9(a) of the Investment Company Act. 
Activities Prohibited by the Investment Company Act 
10. Section 9(a)(2) of the Investment Company Act provides, in relevant part, that it 
shall be unlawful for a person to serve or act as, among other things, an investment adviser or 
depositor of any registered investment company, or as a principal underwriter for any registered 
open-end investment company, registered unit investment trust or registered face-amount 
certificate company (collectively, “Fund Service Activities”), if such person is “by reason of any 
misconduct,” among other things, “permanently or temporarily enjoined by order, judgment, or 
decree of any court of competent jurisdiction . . . from engaging in or continuing any conduct or 
practice in connection with ... the purchase or sale of any security.” 

 4 
11. Pursuant to Section 9(a)(2) of the Investment Company Act, the entry of the 
Consent Order, pursuant to which the New Jersey Court ordered that CSS “shall not violate [the 
New Jersey Uniform Securities Law],” prohibited CSS from engaging in Fund Service Activities 
as of October 24, 2022. 
12. Section 9(a)(3) of the Investment Company Act extends the prohibitions of Section 
9(a)(2) to a company any “affiliated person” of which is ineligible to engage in Fund Service 
Activities under the provisions of Section 9(a)(2). The term “affiliated person” is defined in 
Section 2(a)(3) of the Investment Company Act to include, among others, “any person directly or 
indirectly controlling, controlled by, or under common control with, such other person.” 
13. Although CSAM and CSAM Ltd. were not subject to the Consent Order, CSS is an 
affiliated person of CSAM and CSAM Ltd. within the meaning of Section 2(a)(3) of the 
Investment Company Act. As a result of the entry of the Consent Order against CSS, Sections 
9(a)(2) and 9(a)(3) of the Investment Company Act together also prohibited CSAM and CSAM 
Ltd. from engaging in Fund Service Activities as of October 24, 2022. 
14. Each of the Respondents was engaged in one or more Fund Service Activities as of 
October 24, 2022 and, notwithstanding the entry of the Consent Order on that date, continued to 
engage in one or more Fund Service Activities throughout the Relevant Period. 
Violations 
15. As a result of the conduct described above, each of the Respondents willfully
1
 
violated Section 9(a) of the Investment Company Act, which makes it unlawful for a person to 
serve or act as, among other things, an investment adviser or depositor of any registered investment 
company, or as a principal underwriter for any registered open-end investment company, registered 
unit investment trust or registered face-amount certificate company, if such person is “by reason of 
any misconduct,” among other things, “permanently or temporarily enjoined by order, judgment, 
or decree of any court of competent jurisdiction . . . from engaging in or continuing any conduct or 
practice in connection with . . . the purchase or sale of any security.” 
Disgorgement 
16. The disgorgement and prejudgment interest ordered in paragraph IV.C is consistent 
with equitable principles, does not exceed Respondents’ net profits from their violations, and 
returning the money to Respondents would be inconsistent with equitable principles. Therefore, in 
these circumstances, distributing disgorged funds to the U.S. Treasury is the most equitable 
alternative. The disgorgement and prejudgment interest ordered in paragraph IV.C shall be 
 
1
 “Willfully,” for purposes of imposing relief under Section 203(e) of the Advisers Act and Section 15(b) of the 
Exchange Act, “‘means no more than that the person charged with the duty knows what he is doing.’” Wonsover v. 
SEC, 205 F.3d 408, 414 (D.C. Cir. 2000) (quoting Hughes v. SEC, 174 F.2d 969, 977 (D.C. Cir. 1949)). There is no 
requirement that the actor “also be aware that he is violating one of the Rules or Acts.” Tager v. SEC, 344 F.2d 5, 8 
(2d Cir. 1965). 

 5 
transferred to the general fund of the U.S. Treasury, subject to Section 21F(g)(3) of the Exchange 
Act. 
Respondents’ Remedial Efforts 
17. In determining to accept the Offer, the Commission considered remedial acts 
promptly undertaken by Respondents, including their ongoing development of enhanced policies 
and procedures for considering potential collateral consequences associated with the settlement of 
civil and regulatory proceedings. 
IV. 
In view of the foregoing, the Commission deems it appropriate and in the public interest to 
impose the sanctions agreed to in the Respondents’ Offer. 
Accordingly, pursuant to Section 15(b) the Exchange Act, Section 203(e) of the Advisers 
Act, and Sections 9(b) and 9(f) of the Investment Company Act, it is hereby ORDERED that: 
A. Each of the Respondents cease and desist from committing or causing any 
violations and any future violations of Section 9(a) of the Investment Company Act. 
B. Each of the Respondents is censured.  
C. Respondents shall, within fourteen (14) days of the entry of this Order, pay 
disgorgement, prejudgment interest, and civil penalties totaling $10,080,220 as follows to the 
Securities and Exchange Commission for transfer to the general fund of the United States 
Treasury, subject to Exchange Act Section 21F(g)(3):  
(i) Respondent CSS shall pay a civil penalty of $1,000,000 consistent with the 
provisions of this Subsection C. 
(ii) Respondent CSAM shall pay disgorgement of $6,585,385 and prejudgment 
interest of $194,835, consistent with the provisions of this Subsection C. 
(iii) Respondent CSAM shall pay a civil penalty of $2,000,000 consistent with 
the provisions of this Subsection C. 
(iv) Respondent CSAM Ltd. shall pay a civil penalty of $300,000 consistent 
with the provisions of this Subsection C. 
(v) If timely payment of disgorgement and prejudgment interest is not made, 
additional interest shall accrue pursuant to SEC Rule of Practice 600, and if 
timely payment of civil penalty is not made, additional interest shall accrue 
pursuant to 31 U.S.C. §3717. 
(vi) Payment must be made in one of the following ways:  

 6 
(a) Respondents may transmit payment electronically to the 
Commission, which will provide detailed ACH transfer/Fedwire 
instructions upon request;  
(b) Respondents may make direct payment from a bank account via 
Pay.gov through the SEC website at http://www.sec.gov/about/ 
offices/ofm.htm; or 
(c) Respondents may pay by certified check, bank cashier’s check, or 
United States postal money order, made payable to the Securities 
and Exchange Commission and hand-delivered or mailed to: 
Enterprise Services Center 
Accounts Receivable Branch 
HQ Bldg., Room 181, AMZ-341 
6500 South MacArthur Boulevard 
Oklahoma City, OK 73169 
Payments by check or money order must be accompanied by a cover letter 
identifying payor as a Respondent in these proceedings, and the file number 
of these proceedings; a copy of the cover letter and check or money order 
must be sent to Jeffrey Shank, Assistant Regional Director, Asset 
Management Unit, Chicago Regional Office, Securities and Exchange 
Commission, 175 West Jackson Boulevard, Suite 1450, Chicago, IL 60604. 
D. Amounts ordered to be paid as civil money penalties pursuant to this Order shall be 
treated as penalties paid to the government for all purposes, including all tax purposes. To preserve 
the deterrent effect of the civil penalty, Respondents agree that in any Related Investor Action, they 
shall not argue that they are entitled to, nor shall they benefit by, offset or reduction of any award 
of compensatory damages by the amount of any part of Respondents’ payment of a civil penalty in 
this action (“Penalty Offset”). If the court in any Related Investor Action grants such a Penalty 
Offset, Respondents agree that they shall, within thirty (30) days after entry of a final order 
granting the Penalty Offset, notify the Commission’s counsel in this action and pay the amount of 
the Penalty Offset to the Securities and Exchange Commission. Such a payment shall not be 
deemed an additional civil penalty and shall not be deemed to change the amount of the civil 
penalty imposed in this proceeding. For purposes of this paragraph, a “Related Investor Action” 
means a private damages action brought against Respondents by or on behalf of one or more 
investors based on substantially the same facts as alleged in the Order instituted by the 
Commission in this proceeding. 
 By the Commission. 
 
 
Vanessa A. Countryman 
Secretary 

UNITED STATES OF AMERICA 

Before the 

SECURITIES AND EXCHANGE COMMISSION 

 

 

SECURITIES EXCHANGE ACT OF 1934 

Release No. 99158 / December 13, 2023 

 

INVESTMENT ADVISERS ACT OF 1940 

Release No. 6504 / December 13, 2023 

 

INVESTMENT COMPANY ACT OF 1940 

Release No. 35067 / December 13, 2023 

 

ADMINISTRATIVE PROCEEDING 

File No. 3-21811 

 

 

In the Matter of 

 

Credit Suisse Securities 

(USA) LLC;  

Credit Suisse Asset 

Management, LLC; and 

Credit Suisse Asset 

Management Limited, 

 

Respondents. 

 

 

 

 

 

 

ORDER INSTITUTING 

ADMINISTRATIVE AND CEASE-AND-

DESIST PROCEEDINGS PURSUANT TO 

SECTION 15(b) OF THE SECURITIES 

EXCHANGE ACT OF 1934, SECTION 

203(e) OF THE INVESTMENT ADVISERS 

ACT OF 1940, AND SECTIONS 9(b) AND 

9(f) OF THE INVESTMENT COMPANY 

ACT OF 1940, MAKING FINDINGS, AND 

IMPOSING REMEDIAL SANCTIONS 

AND A CEASE-AND-DESIST ORDER 

  

I. 

 The Securities and Exchange Commission (“Commission”) deems it appropriate and in the 

public interest that public administrative and cease-and-desist proceedings be, and hereby are, 

instituted pursuant to Section 15(b) of the Securities Exchange Act of 1934 (“Exchange Act”), 

Section 203(e) of the Investment Advisers Act of 1940 (“Advisers Act”), and Sections 9(b) and 

9(f) of the Investment Company Act of 1940 (“Investment Company Act”), against Credit Suisse 

Securities (USA) LLC (“CSS”), Credit Suisse Asset Management, LLC (“CSAM”), and Credit 

Suisse Asset Management Limited (“CSAM Ltd.”) (collectively, “Respondents”). 

II. 

 In anticipation of the institution of these proceedings, Respondents have submitted an Offer 

of Settlement (the “Offer”) which the Commission has determined to accept. Solely for the purpose 



 2 

of these proceedings and any other proceedings brought by or on behalf of the Commission, or to 

which the Commission is a party, and without admitting or denying the findings herein, except as 

to the Commission’s jurisdiction over them and the subject matter of these proceedings, which are 

admitted, Respondents consent to the entry of this Order Instituting Administrative and Cease-and-

Desist Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934, Section 

203(e) of the Investment Advisers Act of 1940, and Sections 9(b) and 9(f) of the Investment 

Company Act of 1940, Making Findings, and Imposing Remedial Sanctions and a Cease-and-

Desist Order (“Order”), as set forth below.  

III. 

 On the basis of this Order and Respondents’ Offer, the Commission finds that: 

Summary 

1. From October 24, 2022 to June 7, 2023 (“Relevant Period”), Respondents 

unlawfully served or acted as an investment adviser or principal underwriter to registered 

investment companies and/or employees’ securities companies (“ESCs”). A New Jersey state court 

order issued on October 24, 2022 caused Respondents to be deemed ineligible to provide services 

to registered investment companies and ESCs under Section 9(a) of the Investment Company Act. 

During the Relevant Period, Respondents acted as an investment adviser or principal underwriter 

to registered investment companies or ESCs in violation of the ineligibility provisions of the 

Investment Company Act. 

Respondents 

2. Credit Suisse Securities (USA) LLC, a Delaware limited liability company 

headquartered in New York, New York, is a wholly-owned subsidiary of UBS Group AG (“UBS 

Group”), a public foreign bank holding company headquartered in Switzerland. CSS has been 

registered with the Commission as a broker-dealer since 1936 and as an investment adviser since 

1999, and had $785 million of regulatory assets under management as of December 31, 2022. CSS 

acts as principal underwriter to certain open-end investment companies registered under the 

Investment Company Act. 

3. Credit Suisse Asset Management, LLC, a Delaware limited liability company 

headquartered in New York, New York, is a wholly-owned subsidiary of UBS Group, and is an 

affiliate of CSS. CSAM has been registered with the Commission as an investment adviser since 

1990 and had $65.37 billion of regulatory assets under management as of December 31, 2022. 

CSAM acts as an investment adviser to certain investment companies registered under the 

Investment Company Act and certain ESCs. 

4. Credit Suisse Asset Management Limited, a British corporation, is an indirect, 

wholly-owned subsidiary of UBS Group, and is an affiliate of CSS. CSAM Ltd. has been 

registered with the Commission as an investment adviser since 1991, and had $11.65 billion of 

regulatory assets under management as of December 31, 2022. CSAM Ltd. acts as an investment 

adviser to certain investment companies registered under the Investment Company Act. 



 3 

Background 

5. On December 17, 2013, the Acting Attorney General of New Jersey on behalf of 

the Acting Chief of the New Jersey Bureau of Securities filed a complaint in the Superior Court of 

New Jersey, Mercer County Chancery Division, against CSS and two of its affiliates (“New Jersey 

Action”), alleging CSS violated Sections 49:3-52(b) and (c) of the New Jersey Uniform Securities 

Law in connection with its role as the underwriter of certain residential mortgage backed securities 

trust certificates. These sections of the New Jersey Uniform Securities Law prohibit making 

materially false and misleading statements and/or omitting material facts in statements to investors 

and engaging in any act or practice which would operate as a fraud or deceit upon any person in 

connection with the offer, sale or purchase of securities. 

6. On October 24, 2022, the Superior Court of New Jersey entered a consent order 

(“Consent Order”) and final judgment in the New Jersey Action that, in relevant part, ordered 

permanent relief under N.J.S.A. 49:3-69 that CSS “shall not violate” the New Jersey Uniform 

Securities Law, N.J.S.A. 49:3-47, et seq. On November 14, 2022, Respondents voluntarily notified 

the staff of the Commission regarding the entry of the Consent Order. 

7. When the Consent Order was entered, the Respondents had not sought or obtained 

exemptive relief from Section 9(a) of the Investment Company Act. The Respondents continued to 

serve as investment advisers or principal underwriters to registered investment companies and/or 

ESCs after the entry of the Consent Order based on their position at the time that the Consent 

Order did not trigger the disqualification provisions of Section 9(a) of the Investment Company 

Act. 

8. On June 7, 2023, the Respondents applied for and the Commission issued a 

temporary order with the effect of, among other things, providing the Respondents and certain of 

their affiliates with a time-limited exemption from Section 9(a) of the Investment Company Act. 

9. On June 12, 2023, the Respondents were acquired by UBS Group as part of UBS 

Group’s merger with Credit Suisse Group AG, with UBS Group remaining as the surviving 

company. On July 5, 2023, the Commission issued a permanent order that provided UBS Group 

and certain of its affiliates, which became affiliates of Respondents upon the closing of the merger, 

with a permanent exemption from Section 9(a) of the Investment Company Act. 

Activities Prohibited by the Investment Company Act 

10. Section 9(a)(2) of the Investment Company Act provides, in relevant part, that it 

shall be unlawful for a person to serve or act as, among other things, an investment adviser or 

depositor of any registered investment company, or as a principal underwriter for any registered 

open-end investment company, registered unit investment trust or registered face-amount 

certificate company (collectively, “Fund Service Activities”), if such person is “by reason of any 

misconduct,” among other things, “permanently or temporarily enjoined by order, judgment, or 

decree of any court of competent jurisdiction . . . from engaging in or continuing any conduct or 

practice in connection with … the purchase or sale of any security.” 



 4 

11. Pursuant to Section 9(a)(2) of the Investment Company Act, the entry of the 

Consent Order, pursuant to which the New Jersey Court ordered that CSS “shall not violate [the 

New Jersey Uniform Securities Law],” prohibited CSS from engaging in Fund Service Activities 

as of October 24, 2022. 

12. Section 9(a)(3) of the Investment Company Act extends the prohibitions of Section 

9(a)(2) to a company any “affiliated person” of which is ineligible to engage in Fund Service 

Activities under the provisions of Section 9(a)(2). The term “affiliated person” is defined in 

Section 2(a)(3) of the Investment Company Act to include, among others, “any person directly or 

indirectly controlling, controlled by, or under common control with, such other person.” 

13. Although CSAM and CSAM Ltd. were not subject to the Consent Order, CSS is an 

affiliated person of CSAM and CSAM Ltd. within the meaning of Section 2(a)(3) of the 

Investment Company Act. As a result of the entry of the Consent Order against CSS, Sections 

9(a)(2) and 9(a)(3) of the Investment Company Act together also prohibited CSAM and CSAM 

Ltd. from engaging in Fund Service Activities as of October 24, 2022. 

14. Each of the Respondents was engaged in one or more Fund Service Activities as of 

October 24, 2022 and, notwithstanding the entry of the Consent Order on that date, continued to 

engage in one or more Fund Service Activities throughout the Relevant Period. 

Violations 

15. As a result of the conduct described above, each of the Respondents willfully1 

violated Section 9(a) of the Investment Company Act, which makes it unlawful for a person to 

serve or act as, among other things, an investment adviser or depositor of any registered investment 

company, or as a principal underwriter for any registered open-end investment company, registered 

unit investment trust or registered face-amount certificate company, if such person is “by reason of 

any misconduct,” among other things, “permanently or temporarily enjoined by order, judgment, 

or decree of any court of competent jurisdiction . . . from engaging in or continuing any conduct or 

practice in connection with . . . the purchase or sale of any security.” 

Disgorgement 

16. The disgorgement and prejudgment interest ordered in paragraph IV.C is consistent 

with equitable principles, does not exceed Respondents’ net profits from their violations, and 

returning the money to Respondents would be inconsistent with equitable principles. Therefore, in 

these circumstances, distributing disgorged funds to the U.S. Treasury is the most equitable 

alternative. The disgorgement and prejudgment interest ordered in paragraph IV.C shall be 

 
1 “Willfully,” for purposes of imposing relief under Section 203(e) of the Advisers Act and Section 15(b) of the 

Exchange Act, “‘means no more than that the person charged with the duty knows what he is doing.’” Wonsover v. 

SEC, 205 F.3d 408, 414 (D.C. Cir. 2000) (quoting Hughes v. SEC, 174 F.2d 969, 977 (D.C. Cir. 1949)). There is no 

requirement that the actor “also be aware that he is violating one of the Rules or Acts.” Tager v. SEC, 344 F.2d 5, 8 

(2d Cir. 1965). 



 5 

transferred to the general fund of the U.S. Treasury, subject to Section 21F(g)(3) of the Exchange 

Act. 

Respondents’ Remedial Efforts 

17. In determining to accept the Offer, the Commission considered remedial acts 

promptly undertaken by Respondents, including their ongoing development of enhanced policies 

and procedures for considering potential collateral consequences associated with the settlement of 

civil and regulatory proceedings. 

IV. 

In view of the foregoing, the Commission deems it appropriate and in the public interest to 

impose the sanctions agreed to in the Respondents’ Offer. 

Accordingly, pursuant to Section 15(b) the Exchange Act, Section 203(e) of the Advisers 

Act, and Sections 9(b) and 9(f) of the Investment Company Act, it is hereby ORDERED that: 

A. Each of the Respondents cease and desist from committing or causing any 

violations and any future violations of Section 9(a) of the Investment Company Act. 

B. Each of the Respondents is censured.  

C. Respondents shall, within fourteen (14) days of the entry of this Order, pay 

disgorgement, prejudgment interest, and civil penalties totaling $10,080,220 as follows to the 

Securities and Exchange Commission for transfer to the general fund of the United States 

Treasury, subject to Exchange Act Section 21F(g)(3):  

(i) Respondent CSS shall pay a civil penalty of $1,000,000 consistent with the 

provisions of this Subsection C. 

(ii) Respondent CSAM shall pay disgorgement of $6,585,385 and prejudgment 

interest of $194,835, consistent with the provisions of this Subsection C. 

(iii) Respondent CSAM shall pay a civil penalty of $2,000,000 consistent with 

the provisions of this Subsection C. 

(iv) Respondent CSAM Ltd. shall pay a civil penalty of $300,000 consistent 

with the provisions of this Subsection C. 

(v) If timely payment of disgorgement and prejudgment interest is not made, 

additional interest shall accrue pursuant to SEC Rule of Practice 600, and if 

timely payment of civil penalty is not made, additional interest shall accrue 

pursuant to 31 U.S.C. §3717. 

(vi) Payment must be made in one of the following ways:  



 6 

(a) Respondents may transmit payment electronically to the 

Commission, which will provide detailed ACH transfer/Fedwire 

instructions upon request;  

(b) Respondents may make direct payment from a bank account via 

Pay.gov through the SEC website at http://www.sec.gov/about/ 

offices/ofm.htm; or 

(c) Respondents may pay by certified check, bank cashier’s check, or 

United States postal money order, made payable to the Securities 

and Exchange Commission and hand-delivered or mailed to: 

Enterprise Services Center 

Accounts Receivable Branch 

HQ Bldg., Room 181, AMZ-341 

6500 South MacArthur Boulevard 

Oklahoma City, OK 73169 

Payments by check or money order must be accompanied by a cover letter 

identifying payor as a Respondent in these proceedings, and the file number 

of these proceedings; a copy of the cover letter and check or money order 

must be sent to Jeffrey Shank, Assistant Regional Director, Asset 

Management Unit, Chicago Regional Office, Securities and Exchange 

Commission, 175 West Jackson Boulevard, Suite 1450, Chicago, IL 60604. 

D. Amounts ordered to be paid as civil money penalties pursuant to this Order shall be 

treated as penalties paid to the government for all purposes, including all tax purposes. To preserve 

the deterrent effect of the civil penalty, Respondents agree that in any Related Investor Action, they 

shall not argue that they are entitled to, nor shall they benefit by, offset or reduction of any award 

of compensatory damages by the amount of any part of Respondents’ payment of a civil penalty in 

this action (“Penalty Offset”). If the court in any Related Investor Action grants such a Penalty 

Offset, Respondents agree that they shall, within thirty (30) days after entry of a final order 

granting the Penalty Offset, notify the Commission’s counsel in this action and pay the amount of 

the Penalty Offset to the Securities and Exchange Commission. Such a payment shall not be 

deemed an additional civil penalty and shall not be deemed to change the amount of the civil 

penalty imposed in this proceeding. For purposes of this paragraph, a “Related Investor Action” 

means a private damages action brought against Respondents by or on behalf of one or more 

investors based on substantially the same facts as alleged in the Order instituted by the 

Commission in this proceeding. 

 By the Commission. 

 

 

Vanessa A. Countryman 

Secretary