Credit Suisse is seeking permission to continue providing asset management services to retirement plans, after its banking entity pleaded guilty to helping U.S. citizens avoid taxes overseas.
Approval needs to come from the Department of Labor, which has the authority to grant an exemption allowing Credit Suisse to keep its qualified professional asset manager, or QPAM, status.
The settlement in the criminal tax case, which included agreements with the Securities and Exchange Commission, the Federal Reserve and New York state regulators, called for Credit Suisse to pay $2.8 billion, according to the company. In a statement, CEO Brady Dougan said the company has “seen no material impact on our business resulting from the heightened public attention on this issue in the past several weeks.”
The criminal settlement announced May 20 did not address the Department of Labor's role in granting waivers for companies convicted of criminal charges or other situations. Department spokesman Michael Trupo said in an interview that agency officials have granted waivers for all 23 firms seeking individual waivers since 1997, “but it is case by case. Even when they are granted, there are always conditions,” said Mr. Trupo. In 2013, DOL officials granted a waiver to UBS after a Japanese division pleaded guilty to criminal charges. In that case, UBS was required to inform asset management clients about the case and perform annual audits for five years.
A Credit Suisse spokeswoman declined to comment. The company can continue to manage retirement plan assets while waiting for the exemption. It managed $17.8 billion for U.S. institutional tax-exempt clients as of year-end 2013, according to Pensions & Investments data.
