Deutsche Bank has agreed to pay more than $16 million to the U.S. Securities and Exchange Commission to settle charges that it hired «poorly or unqualified» relatives of foreign officials in Asia and Russia.
According to the SEC, such hires were made by the bank at least between 2006 and 2014 at the request of foreign officials with the «primary goal» of winning or retaining business, including initial public offerings.
The breakdown of the $16.2 million settlement amount included: $3 million in civil penalty, $10.8 million in disgorgement and $2.4 million in interest. Under the settlement, Deutsche Bank did not admit or deny the findings, the SEC added, but has since taken «extensive remedial measures» to fix internal controls.
Corrupt Hiring Practices and Falsified Expenses
The regulator underlined that Deutsche Bank employees had created false books and records that concealed corrupt hiring practices. In addition, it also failed to accurately document and record certain related expenses, violating internal compliance rules.
In one case, a Russian hired by the bank’s London office performed so poorly that a human resource employee called him «a liability to the reputation of the program, if not the firm,» the regulator quoted.
U.S. authorities have made various charges against bank’s hiring malpractices of relatives of Asian officials, especially the children of senior Chinese politicians or «princelings» which have resulted in fines far exceeding Deutsche Bank’s latest figure. In 2018, Credit Suisse was fined $77 million for such charges and in 2016, J.P. Morgan was fined a whopping $264 million.
