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Deutsche Bank to pay $16 mn for violating US corruption laws

Deutsche Bank

The SEC fines Deutsche for hiring under-qualified relatives of foreign officials in Asia and Russia which is a violation of the Foreign Corrupt Practices Act

Deutsche Bank has agreed to pay a fine of $16 million to settle charges for violating the US Corruption laws. The Securities and Exchange Commission (SEC) fined Deutsche for hiring under-qualified relatives of foreign officials in Asia and Russia which is a clear violation of the Foreign Corrupt Practices Act. This unlawful hiring practice was carried out at least from 2006 till 2014.

The bank also maintained false books that concealed their unlawful hiring practices and failed to accurately document and record certain related expenses. This helped the bank generate business for the company such as IPOs.

According to the Securities and Exchange Commission, the German bank has neither admitted nor denied the charges. It also noted that the bank has taken necessary steps to fix its hiring policy and internal accounting controls.

“Deutsche Bank provided substantial cooperation to the SEC in its inquiry and has implemented numerous remedial measures to improve the bank’s hiring practices,” Deutsche Bank spokesman Troy Gravitt said in a statement.

The fine paid by Deutsche is relatively low compared to banks such as JPMorgan Chase and Credit Suisse who were charged much higher for similar misconducts. JP Morgan paid $264 million in 2016. Similarly, Credit Suisse agreed to pay $77 million in July 2018.

The $16 million settlement fee to be paid by the bank includes disgorgement of $10.8 million, interest of $2.4 million and a $3 million as civil penalty.

Deutsche Bank recently announced that it will collaborate with at least five fintech companies for faster background checks and loan processing to help small scale businesses.

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