SEC Division of Corporation Finance no-action letter: Credit Suisse Group AG

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON , D.C. 20549

DIVISION OF
CORPORATION FINANCE
February 21, 2014
Peter H. Bresnan, Esq.

Simpson Thacher & Bartlett LLP

1155 F Street, N.W.

Washington, DC 20004
Re: In the Matter of Credit Suisse Group AG
Waiver Requests under Regulation A and Rules 505 and 506 of Regulation D Securities Exchange Act Release No. 34-71593, February 21,2014 Administrative Proceeding File No. 3-15763 Dear Mr. Bresnan:
This responds to your letter dated February 21, 2014 ("Waiver Request"), written on behalf of Credit Suisse Group AG ("CSAG") and constituting an application for waivers of disqualification under Rule 262 ofRegulation A and Rules 505(b)(2)(iii)(C) and 506(d)(2)(ii) of Regulation D under the Securities Act of 1933. In the Waiver Request, you requested relief from any disqualification that may arise as to CSAG under Rule 262 ofRegulation A and Rules 505 and 506 ofRegulation D by virtue ofthe Commission's order entered on February 21, 2014 in In the Matter of Credit Suisse Group AG, Release No. 34-71593, pursuant to Sections 15(b)(4) and 21C of the Securities Exchange Act of 1934 and Section 203(e) and (k) ofthe Investment Advisers Act of 1940 (the "Order"). Based on the facts and representations in the Waiver Request, and assuming CSAG complies with the Order, the Commission, pursuant to delegated authority, has determined that CSAG has made a showing of good cause under Rule 262 of Regulation A and Rules 505(b )(2)(iii)(C) and 506( d)(2)(ii) ofRegulation D that it is not necessary under the circumstances to deny it the availability ofRegulation A and Rules 505 and 506 ofRegulation D by virtue ofthe entry ofthe Order. Accordingly, the relief requested in the Waiver Request regarding any disqualification that may arise as to CSAG under Rule 262 ofRegulation A and Rules 505 and 506 ofRegulation D by virtue ofthe entry ofthe Order is granted. Any different facts or representations in the Waiver Request or non-compliance with the Order might result in a different conclusion. Very truly yours, Sebastian Gomez Abero Chief, Office of Small Business Policy Division of Corporation Finance

SIMPSON THACHER & BARTLETT LLP

1155 F STREET, N . W ,

WASHINGTON, DC 20004

(202) 636-5500
FACSIMILE (202) 636·5502
DIRECT DIAL NUMBER E·MA I L ADDRESS
(202) 636·SS69 pbrcsnon @stb1ow . com
February 21, 2014
Re: In the Matter ofCredit Suisse Group AG (H0- 10977) Sebastian Gomez Abero Chief, Office of Small Business Policy U.S. Securities and Exchange Commission I00 F Street, NE, 3rd Floor Washington, DC 20549-3628 Dear Mr. Gomez Abero:
On behalf ofour client, Credit Suisse Group AG ("CSAG"), the settling respondent in the above-captioned administrative proceeding, we hereby respectfully request, pursuant to Rule 262 ofRegulation A and Rules 505 and 506 of Regulation D ofthe Securities Act of 1933 ("Securities Act"), a waiver of any disqualification that may arise pursuant to Rule 262 or Rules 505 or 506 of Regulation D with respect to CSAG or any ofits affiliates as a result of the entry ofthe order instituting administrative proceedings pursuant to Sections 15(b)(4) and 21 C of the Securities Exchange Act of 1934 and Sections 203( e) and (k) ofthe Investment Advisers Act of 1940 (the "Order"). It is our understanding that the Staff of the Division of Enforcement (the "Staff') does not object to the grant of the requested waivers. Background The Staff engaged in settlement discussions with CSAG in connection with its investigation ofpotential violations of Section 15(a) ofthe Securities Exchange Act of 1934 (the "Exchange Act") and Section 203(a) ofthe Investment Advisers Act of 1940 (the "Advisers Act"). As a result ofthese discussions, CSAG submitted an Offer of Settlement, and agreed to the Order, which was presented by the Staff to the Commission. The Order finds that from at least 2002 until its exit from its business of providing broker-dealer and investment adviser services to certain U.S. clients, which CSAG began in 2008, CSAG violated the federal securities laws by providing certain cross-border brokerage and investment advisory services to certain U.S. clients without registering as a broker

SIMPSON THACHER & BARTLETf LLP
Division ofCorporate Finance
U.S. Securities and Exchange Commission -2- February 21, 2014 dealer under Exchange Act Section 15(a) or as an investment adviser under Advisers Act
Section 203(a).
The Order, among other things, finds that CSAG willfully violated Exchange Act
Section 15(a) and Adviser's Act Section 203(a), censures CSAG, directs CSAG to cease￾and-desist from committing or causing any violations and any future violations of Section
15(a) ofthe Exchange Act or Section 203(a) ofthe Adviser's Act. Additionally, CSAG shall pay a total of $196,511,014 to the United States Treasury. Discussion We understand that the entry ofthe Order may disqualify CSAG and its affiliated issuers from relying on certain exemptions under Regulation A and Rules 505 and 506 of Regulation D pursuant to 17 C.F.R. § 230.262(b)(3). See also 17 C.F.R. § 230.505(b), 230.506(d). The Commission has the authority to waive the Regulations A and D exemption disqualifications upon a showing of good cause that it is not necessary under the circumstances that the exemptions be denied. See 17 C.F.R. §§ 230.262; 230.505(b), 230.506(d). For the reasons discussed below, CSAG respectfully requests that the Commission waive any disqualifying effects that the Order has under Regulation A and Rules 505 and 506 ofRegulation D with respect to CSAG or its affiliates on the following grounds:
First, the misconduct alleged does not relate to any securities offerings, either under Regulation A or Regulation D, or otherwise. Seco11d, the disqualification ofany ofCSAG or its affiliates from the exemptions under Regulation A and Rules 505 and 506 of Regulation D would be unduly and disproportionately severe given that the Order addresses the activity alleged in the Order through a cease and desist order and other relief. The disqualification would adversely affect the business operations ofCSAG, its issuer affiliates, or such third party issuers by impairing their ability to issue securities pursuant to these exemptions. For example, for CSAG's Private Banking business, there are many offerings currently in distribution that rely on Regulation D. With respect to CSAG's Asset Management business, affiliates ofCSAG act as the sponsor, general partner, or investment adviser to various funds that they launch. In the hedge fund space alone, affiliates of CSAG have launched over 20 funds that rely on Regulation D and are "continuously offered." Further, an affiliate ofCSAG is an issuer under a multi-billion dollar commercial paper program that relies in part on Regulation D. Disqualification from exemptions under Regulation A and Rules 505 and 506 of Regulation D would cost affiliates of CSAG tens of millions of dollars in revenue from management and performance fees a year.

SIMPSON THACHER & BARTLETT LLP
Division ofCorporate Finance
U.S. Securities and Exchange Commission -3- February 21,2014 Tltird, the disqualification ofCSAG or its affiliates from the exemptions under Regulation A and Rules 505 and 506 ofRegulation D would adversely impact third parties that have retained, or may retain, CSAG and its affiliates in connection with transactions that rely on these exemptions. For example, third party issuers who retain CSAG or its affiliates as an underwriter would be disadvantaged ifCSAG or its affiliates were disqualified from serving in that capacity. Fourtll, for a period offive years from the date ofthe Order, CSAG will furnish (or cause to be furnished) to each purchaser in a Rule 262 Regulation A, Rule 505, and Rule 506 offering that would otherwise be subject to the disqualification under Rule 262 of Regulation A, Rule 505, or Rule 506(d)(l) as a result ofthe Order, a description in writing ofthe Order a reasonable time prior to sale. In light ofthe grounds for relief discussed above, we believe that disqualification is not necessary, in the public interest, or for the protection ofinvestors, and that CSAG has shown good cause that relief should be granted. Accordingly, we respectfully request the Commission to waive the disqualification provisions in Regulation A and Rules 505 and 506 ofRegulation D to the extent they are applicable to CSAG or any of its affiliate issuers as a result of entry ofthe Order. Very truly yours, 1tt.if. Peter H. Bresnan ~ 'If!;