24 August 2019
Deutsche Bank will pay $16.2 million to settle a US regulator’s allegations that it hired relatives of overseas government officials to win business. The hiring took place from 2006 to 2014 in the Asia Pacific-region and Russia.
Deutsche Bank will pay $16.2 million to settle a US regulator’s allegations that it hired relatives of overseas government officials to win business. The hiring took place from 2006 to 2014 in the Asia Pacific-region and Russia.
The Securities and Exchange Commission said in a Thursday order that this violated US laws including the Foreign Corrupt Practices Act.
SEC also accused Deutsche of keeping false books and records to cover up its disingenuous hiring. SEC used five examples to illustrate the charge. In one case, the son of an executive from a Russian state-owned company was transferred from Moscow to London but failed to turn up to work. Two months later the HR person suggested the bank fire the son because “he failed to come to work, cheated on an exam,” the SEC alleged.
In another example, the bank hired the daughter of a “deputy minister” at a Russian state-owned company as an intern in Moscow and subsequently transferred her to London, as it would not be politically correct to have her in Moscow.
German government owns a 15% in Deutsche Bank. The bank has been previously fined £560m by both America and British regulators over alleged money laundering in Russia. Employees at the bank have also been charged for assisting clients with tax avoidance by setting up offshore companies, as revealed by Panama Papers.
Deutsche Bank’s SEC penalty is small when compared with other banks accused of similar misconduct. JP Morgan Chase was penalised about $264m in November 2016, while Credit Suisse Group agreed to pay $77m in July last year.
