March 11, 2023

USA: Credit Suisse Announced Thursday 3/9 That It Will Delay Publication Of Its 2022 Annual Report After A Late Call From the US Securities and Exchange Commission On Wednesday night. Oh.

I added the gif above to the message I shared below.
written by Elliot Smith
Thursday March 9, 2023

Credit Suisse on Thursday announced that it will delay the publication of its 2022 annual report after a late call from the U.S. Securities and Exchange Commission on Wednesday night.

In a statement, the embattled Swiss lender said the conversation related to SEC comments about the “technical assessment of previously disclosed revisions to the consolidated cash flow statements in the years ended December 31, 2020, and 2019, as well as related controls.”

“Management believes it is prudent to briefly delay the publication of its accounts in order to understand more thoroughly the comments received. We confirm the 2022 financial results as previously released on February 9, 2023, are not impacted by the above,” the bank said.

The annual report was scheduled for release on Thursday morning. On Feb. 9, Credit Suisse reported a massive 2022 full-year net loss of 7.3 billion Swiss francs ($7.8 billion) and telegraphed another “substantial” full-year loss for this year.

The bank in October announced a plan to simplify and transform its business in a bid to return to stable profitability, following chronic underperformance in its investment bank and a litany of risk and compliance failures.

In late February, Swiss regulator FINMA concluded that Credit Suisse “seriously breached its supervisory obligations” regarding a business relationship with collapsed supply chain finance firm Greensill Capital.

Credit Suisse shares closed Wednesday’s trade at around 2.68 Swiss francs per share, down 3.22% since the start of the year, and are expected to fall further at market open on Thursday.

The Financial Times
written by Owen Walker, European Banking Correspondent
Thursday March 9, 2023

Credit Suisse shares hit a new intraday low on Thursday after the bank delayed the publication of its annual report following a call from the US Securities and Exchange Commission the previous evening over cash flow statements dating back to 2019.

Shares in the bank fell to SFr2.51 in morning trading, dropping more than 5 per cent after the market opened, having hit a previous record low of SFr2.52 last week.

The bank said its financial statements for 2022 — which it published last month — were unaffected and that the SEC’s feedback was of a technical nature, without providing any further information.

“Management believes it is prudent to briefly delay the publication of its accounts in order to understand more thoroughly the comments received,” the bank said.

The report delay comes at a sensitive time for the group, which announced its second consecutive annual loss last month and said it expected a further loss in 2023.

Customers have withdrawn more than SFr100bn ($106bn) of assets from the bank in recent months, while longtime investors — including former top shareholder Harris Associates — have sold down their stakes.

The SEC’s comments relate to accounting issues Credit Suisse identified in its 2021 annual report in relation to the netting treatment of some securities lending and borrowing activities. This resulted in balance sheet and cash flow positions being understated.

The bank revised its total assets and liabilities by SFr13bn — equivalent to 1.7 per cent of its total assets — for 2020, which meant the cash flow statement was adjusted by SFr70mn.

Credit Suisse also made changes to the cash flow statement for share-based compensation, non-cash exchange rate movements and some cash flow hedges.

The bank said on Thursday that the SEC’s comments also concerned the bank’s related controls of the cash flow statements.

A person with knowledge of the bank’s discussions with the SEC said the regulator had previously raised questions about the cash flow statements, to which Credit Suisse had provided a response.

They added that the bank hoped to publish the annual report as soon as possible but wanted to make sure it had responded to the SEC before doing so.

Anke Reingen, an analyst at RBC, said: “We have generally not focused on cash flow statements; the amounts are relatively small and the restatement was previously disclosed.

“However, questions with respect to accounting, especially from the SEC, are negative, especially as the Credit Suisse press release points to SEC questions with respect to related controls of the revisions.”
written by Frank Nez
November 3, 2022

The SEC released Credit Suisse’s 6-K filing where the bank warns investors of potential losses due to naked short covering, more on that below.

Credit Suisse (CS) took a massive hit of $4.09 billion in Q3 and hints at occurring losses in an upturn in markets.

The bank recently called out AMC Entertainment predicting shares to fall to $0.95 despite the bank’s shares trading below the movie theatre chain company.

Now Credit Suisse is hiring 20 banks for a $4 billion injection in effort to pivot from Q3’s disaster.

Here’s the latest market news.

Credit Suisse Naked Short Covering

In this 6-K filing, Credit Suisse warns investors of potential losses due to the high possibility of naked short covering.

In a statement, the bank says, “Conversely, to the extent that we have sold assets that we do not own, or have net short positions, in any of those markets, an upturn in those markets could expose us to potentially significant losses as we attempt to cover our net short positions by acquiring assets in a rising market.“

“Market fluctuations, downturns and volatility can adversely affect the fair value of our positions and our results of operations.

Adverse market or economic conditions or trends have caused, and in the future may cause, a significant decline in our net revenues and profitability.”

The closing of naked shorts would send affected securities soaring as buying momentum compounds.

Heavily shorted stocks may squeeze in the process, but the results would be disastrous to short sellers.

I’m curious to know your thoughts.
UPDATE 3/11/23 at 2:40am: Added info below.
This is who is in charge of the Securities Exchange Commission aka SEC.

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