LONDON (CNNfn) - Global investment bank Credit Suisse First Boston confirmed Wednesday it has suspended two high-level employees based in London and Tokyo on full pay pending the outcome of a probe by Japanese regulators into the firm's derivatives activities.
A Credit Suisse Group spokeswoman in Zurich said Wednesday CSFB had suspended on full pay Shinji Yamada, the Tokyo branch manager for Credit Suisse Financial Products, and Anthony Blunt, the bank's London-based global head of compliance.
The confirmation follows CSFB's recent firing of three U.K.-based traders who dubbed themselves the Flaming Ferraris, after their favored cocktail. The Swedish stock exchange had accused the trio of attempting to manipulate the market in the closing days of 1998.
Tuesday, CSFB, a subsidiary of the Swiss bank Credit Suisse with offices in more than 50 countries, was fined 2 million Swedish kronor ($242,000) by the Stockholm-based exchange.
The latest round of suspensions is in response to a probe launched by Japan's Financial Supervisory Agency five months ago and which could result in the suspension of part of the bank's Japanese license, the Financial Times reported Wednesday.
CSFB declined to comment on the investigation Wednesday.
But the FT said the inspection centers on whether traders at CSFB's derivatives unit, Credit Suisse Financial Products, helped client banks -- including Long-Term Credit Bank and Nippon Credit Bank -- to cover up losses.
The Japanese watchdog also is said to be investigating how CSFB handled evidence of the alleged abuses in the initial phase of the probe.
The FT said CSFB is thought to have denied any wrongdoing in its derivatives activity, but that the bank probably won't contest the charges of obstruction. The newspaper cited no source for these contentions.
The newspaper also said CSFB had hired U.S. lawyers to handle the case.
Separately, Japan's FSA said Wednesday it expects to complete its investigation by mid-June, before a planned reshuffle of agency staff, Reuters reported.
An agency official told the news service that all FSA inspectors had left the bank's Tokyo offices before Japan's "Golden Week" holidays earlier this month.
He was quoted as adding: "There are some materials we are still asking for. And now that the outlines of transactions have become clearer to us, we might visit the site again with more specific focus."