Thu, Jun 07, 2018 - Page 12 News List

Credit Suisse pays to end US Asia probe

Bloomberg

Credit Suisse Group AG agreed to pay a US$47 million penalty to the US Department of Justice to end a probe into whether it hired employees in Asia in exchange for government contracts and other favors.

Credit Suisse’s Hong Kong unit reached a non-prosecution agreement with the department regarding its recruitment practices in Asia between 2007 and 2013, the Zurich, Switzerland-based bank said yesterday in an e-mailed statement.

The payment would have no material effect on second-quarter results, since the bank has already provisioned for the payment, it said.

The settlement resolves another legal issue for Credit Suisse, which has paid about US$13 billion in fines since 2008.

Credit Suisse earlier this year said that entities including the department and the US Securities and Exchange Commission were investigating whether the bank hired referrals from government and other state-owned entities in exchange for investment banking business and regulatory approvals, in potential violation of the US Foreign Corrupt Practices Act.

The Swiss giant said it has made numerous enhancements to its compliance and control functions since 2013, adding that no criminal charges were brought in the case.

Its Asia-Pacific unit now stands alone under the leadership of Helman Sitohang, one of the results of a three-year strategic overhaul by chief executive officer Tidjane Thiam that has pivoted the bank toward wealth management.

Credit Suisse is one of several global banks that have been investigated by US authorities over their hiring practices in Asia. Others, including JPMorgan Chase & Co and HSBC Holdings PLC, also allegedly hired children of Chinese decisionmakers to win business in violation of anti-bribery laws.

JPMorgan in 2016 agreed to pay about US$264 million to settle the allegations. Investigators at the time described a systematic effort to curry favor with government officials and business executives.

Deutsche Bank AG said in its annual report in March that US regulators were among those investigating its employment history for possible bribery violations, without identifying a country.

Nizar al-Bassam, a former head of corporate finance for Central and Eastern Europe, the Middle East and Africa who left the lender to start his own fund in 2016, is suing the bank for unpaid bonuses he says were unfairly withheld in respect of hires he made.

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