Federal Reserve Terminates 2023 Cease-and-Desist Order on UBS and Credit Suisse

The Federal Reserve has terminated the 2023 enforcement order imposed on UBS and Credit Suisse entities after the Archegos collapse, ending that specific public Fed action nearly three years after it was issued.

In a brief press release dated Friday, the Federal Reserve Board said the “Cease and Desist Order dated July 21, 2023” covering UBS Group AG, Credit Suisse AG, Credit Suisse Holdings (USA), Inc. and Credit Suisse AG, New York Branch was “Terminated May 12, 2026.”

The move closes out a major public enforcement case tied to Credit Suisse’s risk management failures in its dealings with Archegos Capital Management, the family office whose 2021 collapse caused huge losses across Wall Street. For Credit Suisse, the episode was one of its most consequential blowups before UBS acquired the bank. The Fed’s 2023 order said Archegos’ default on margin calls left Credit Suisse with about $5.5 billion in losses.

The central bank’s Friday notice said: “The Federal Reserve Board on Friday announced the termination of the enforcement actions listed below: UBS Group AG, Zurich, Switzerland, Credit Suisse AG, Zurich Switzerland, Credit Suisse Holdings (USA), Inc., New York, New York and Credit Suisse AG, New York Branch, New York, New York.”

The order now being terminated was formally titled “Order to Cease and Desist and Order of Assessment of a Civil Money Penalty Issued Upon Consent.” It was not only a fine. It also required broad remediation aimed at governance and risk management at the bank’s U.S. operations and controls.

Under that July 2023 action, the Fed assessed a civil money penalty of $268,494,109.20 against Credit Suisse, with UBS treated as successor to Credit Suisse Group AG for supervisory purposes. The order stated: “The Board of Governors hereby jointly assesses Credit Suisse and UBS, as the successor of Credit Suisse Group AG, a civil money penalty in the amount of $268,494,109.20.”

The underlying findings in the 2023 order centered on Credit Suisse’s handling of Archegos. The order said that “in or around late March 2021, Archegos defaulted on Credit Suisse’s margin calls, causing Credit Suisse, which lacked adequate margin, to liquidate its positions in the underlying names and suffer approximately $5.5 billion in losses.”

UBS acquired Credit Suisse Group AG on June 12, 2023, according to the 2023 order, and the Fed said UBS was the successor for the supervisory purposes referenced in that action.

Friday’s termination removes that specific public Fed cease-and-desist order from active status. The Fed’s new press release did not provide a narrative explanation for the decision beyond identifying the firms involved, the order being terminated and the May 12 termination date.