Ex-CSFB chief given record fine over Japan tax deception

A senior member of Credit Suisse First Boston's management was yesterday fined a record £150,000 by the City watchdog after he failed to detect attempts by his staff to mislead tax authorities in Japan.

The Financial Services Authority also banned two other former employees of CSFB from holding certain key roles in the financial markets again after finding they were guilty of carrying out the deception against the Japanese authorities or failing to stop it. The penalties against the three individuals come after the FSA imposed a £4m fine - by far its largest ever - on CSFB last year over the same issues, which included evidence that the company had bought a shredder to destroy documents showing the type of business it was doing in Japan.

CSFB acknowledged at the time that certain former employees had failed to live up to the high standards expected of them. It declined comment on the latest fine, saying: "It would not be appropriate now for us to comment on these individuals or their cases."

The FSA said Christopher Goekjian, the former head of CSFB's derivatives subsidiary, Credit Suisse Financial Products, did not pick up warning signals from other employees about the wrongdoing. He left the bank in June 2000.

Andrew Procter, FSA director of enforcement, said the regulator had levied the hefty fine on Mr Goekjian to demonstrate that "we expect people in senior positions in regulated firms to set high standards and lead by example".

The FSA said Mr Goekjian was negligent between 1996 and 1997, when he failed to detect serious offences committed by Robert Stevens, former head of financial control at CSFP.

Mr Stevens prepared misleading statements for Japanese authorities in order that the business could avoid having to pay more tax. He also instructed a member of staff who said she had been told to give incomplete information to the authorities to "do as she had been told". Mr Stevens has been banned from holding any role which requires approval by the FSA.

Antony Blunden, CSFP's compliance officer, has been prevented by the FSA from holding any compliance positions in the future after he failed to act on information that some employees in CSFP's Tokyo branch were hiding things from the authorities.