Credit Suisse to Manage Retirement Assets Despite Conviction

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By Sean Forbes
Oct. 1 — Credit Suisse AG's retirement plan assets managers can continue to advise plans despite the bank's criminal conviction on conspiracy to violate U.S. tax laws, the Department of Labor said in a notice.

Qualified professional assets managers (QPAMs) associated with the Zurich-based bank will be able to take advantage of Prohibited Transaction Exemption 2015-14 “to engage in arm's length transactions with parties in interest with respect to the plans they manage that would otherwise be prohibited,” the DOL said in its notice, released Oct. 1.
QPAMs are large regulated banks, savings and loan associations, insurance companies or federally registered investment advisers that meet certain standards of size and independence.

The exemption is effective from Nov. 18, 2015, the first date following the last day of temporary relief provided under PTE 2014-11, through Nov. 20, 2019.

“As with all such exemptions, there are safeguards in place to protect retirement plans and IRAs,” a DOL spokesman told Bloomberg BNA on Oct. 1.. “For instance, part of this action covers only five of the ten years from which Credit Suisse affiliated asset managers would otherwise be barred from accessing the QPAM class exemption. If those asset managers want to continue doing so after five years, they will need to seek a new exemption from the department,” he said.

A spokesman for Credit Suisse told Bloomberg BNA that the company was grateful for the exemption. “We are pleased that the Department of Labor has granted our QPAM exemption following a rigorous evaluation process, and we look forward to continuing to work on our clients’ behalf,” said Justin G. Perras, head of communications for Credit Suisse Asset Management, in New York.

The DOL's exemption means that Credit Suisse can rely on a previous class exemption, PTE 84-14, which includes a provision stating that once an entity is convicted of specified crimes, the related QPAMs lose the ability to rely on the class exemption for 10 years following the conviction date, absent an individual exemption.

The exemption for Credit Suisse follows a pattern of carefully crafted exemptions over the past year for other major banks that have been convicted of violating laws of the U.S. or other countries.

Temporary Exemption for Subsidiary

In early September, the DOL granted Deutsche Bank AG a temporary exemption for QPAMs affiliated with its South Korean subsidiary (172 PBD, 9/4/15). The department denied Deutsche Bank's second request, but the bank asked for an opportunity to offer more information to support the exemption.

In April, the DOL granted an exemption for affiliates of French bank BNP Paribas SA to serve as QPAMs, despite the bank's guilty plea to criminal charges(72 PBD, 4/15/15). BNP pleaded guilty to conspiring from 2004 to 2012 with banks and other entities located in or controlled by countries subject to U.S. sanctions, including Sudan, Iran and Cuba, to move more than $8.8 billion through the U.S. financial system on behalf of those entities in violation of U.S. sanctions laws. In that exemption, the DOL's conditions included that the BNP affiliated QPAMs and the BNP related QPAMs and their employees didn't participate in, nor receive any compensation from, the criminal conduct of BNP that was the subject of the convictions.

The notice is scheduled to be published Oct. 2 in the Federal Register.

To contact the reporter on this story: Sean Forbes in Washington at
To contact the editor responsible for this story: Jo-el J. Meyer at

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