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July 6, 2018

Credit Suisse fined $77m for corrupt hiring practices in Asia

Credit Suisse Group has agreed to pay a fine of around $77m to US regulators to resolve charges of offering jobs to friends and family of Chinese officials in an effort to gain business opportunities.

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Under the settlement, the Swiss bank’s Hong Kong arm will have to pay around $30m to the Securities and Exchange Commission (SEC) and a $47m criminal penalty to the US Department of Justice (DOJ).

SEC chief of the enforcement division’s FCPA unit Charles Cain said: “Bribery can take many forms, including granting employment to friends and relatives of government officials. Credit Suisse’s practice of engaging in these hiring practices violated the law, and it is now being held to account for having done so.”

The regulators accused the bank of breaching the Foreign Corrupt Practices Act (FCPA) by hiring and promoting individuals referred by or connected to government officials.

According to the watchdogs, the bank recruited over 100 such individuals between 2007 and 2013 to generate more profit.

The regulators further alleged that other subsidiaries of the bank were aware of the hiring practices and in some cases approved the referral hires.

Credit Suisse admitted the wrongdoing, saying that the referral hires were less qualified compared to other staff at the same level, vetted less strictly, and were provided several benefits to help the bank win banking business.

The bank also said that the settlement would not have a material effect.

DOJ criminal division acting assistant attorney general John Cronan said: “Credit Suisse (Hong Kong) Limited engaged in a corrupt scheme to win business with Chinese state-owned entities by hiring friends and family of Chinese government officials, generating the bank at least $46m in profits.

“These ‘relationship hires’ often lacked necessary technical skills, and offered fewer qualifications and significantly less relevant banking experience than other candidates for the jobs.”

Credit Suisse first came under the scanner  for its corrupt hiring practices in February this year.

JPMorgan was fined $264m in connection to a similar case in November 2016.

Free Report
img

Analyze opportunies within the wealth management market in APAC

GlobalData’s ‘Asia-Pacific Wealth Management: Market Sizing and Opportunities to 2026’ report provides a comprehensive overview of the Asia-Pacific (APAC) wealth management market.
  • The report analyzes the APAC wealth and retail savings and investments markets. This includes affluent market size, both by number of individuals and the value of their liquid assets.
  • The affluent population grew by 5.3% in 2021 and is expected to grow at an AAGR of 4.8% between 2022 and 2026.
  • The value of liquid assets held by the affluent segment surged by 8.4% in 2021, backed by economic recovery. HNW individuals’ financial wealth grew by 12%, while mass affluent individuals’ wealth grew by 6.0%.
  • The report provides an analysis of factors driving liquid asset growth. It is also split into asset classes - equities, mutual funds, deposits, and bonds.
  • The affluent population are more risk-tolerant and invest a significant proportion of their investments in risky assets such as equities, compared to emerging affluent and mass market individuals.
The report also provides data and insights on the size of offshore holding of HNW investors in the APAC region.
by GlobalData
Enter your details here to receive your free Report.

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