Japanese police raided the Tokyo branch of Credit Suisse Financial Products (CSFP) on Thursday on suspicion it obstructed an inspection by an industry watchdog, the Financial Supervisory Agency (FSA), in January.

If police indict any employees at CSFP for obstructing inspections they could face up to a year in jail or a fine of up three million yen, the lawyers at the Japan Federation of Bar Associations told Reuters.

Police declined to comment on details of the investigation of CSFP, which is the first foreign bank in memory to be raided by Japanese police for suspected criminal activity.

CSFP's Tokyo branch is suspected of instructing employees to shred transaction documents and erase E-mail records before the FSA's earlier inspection.

A Credit Suisse spokesman in Tokyo said on Thursday that some employees had taken it into their own hands to shred documents, thinking they were covering up potential fire-wall violations, and that the company itself had not been involved on an organisational basis.

Financial regulators said in late July they would revoke the banking licence of CSFP by the end of November for obstructing investigations and offering inappropriate products to clients.

Japanese media reports said on Friday the raid by police was seeking clues on whether or how the CS group outside of Japan engaged in the suspected crime on an organisational basis.

The Credit Suisse spokesman said on Thursday that the firm had informed Japanese financial regulators of its employees' actions, commissioned a report into the incident and made a public apology to Japan and the FSA in May, and that CSFP was losing its licence.

The FSA had been looking into whether CS Group firms in Tokyo engaged in any inappropriate transactions to help clients conceal losses by bouncing them from one account to another, possibly using derivatives transactions.