Credit Suisse Group AG agreed to pay US$77 million to US authorities after admitting it hired the underqualified relatives of influential Chinese officials in order to win business, the US government announced on Thursday.
The case emerges from the so-called princelings investigations, in which US authorities accused major financial firms of giving valuable jobs to relatives of Chinese government officials in return for lucrative government business.
JPMorgan Chase & Co in November 2016 agreed to pay US$264 million to resolve similar allegations.
“Trading employment opportunities for less-than-qualified individuals in exchange for lucrative business deals is an example of nepotism at its finest,” FBI New York Division Assistant Director in Charge William Sweeney said.
The US criminalizes transnational bribery under a 1977 anticorruption law that has since been copied by most other industrialized nations. The law prohibits giving “anything of value” to a foreign official in return for government business.
Federal prosecutors say Credit Suisse admitted that between 2007 and 2013, senior managers at Credit Suisse’s investment bank in Hong Kong hired, promoted and retained job candidates referred to the bank by government officials at state-owned enterprises.
The “relationship hires” were part of a quid pro quo that helped the bank win lucrative contracts.
“The criminal penalty imposed today provides explicit insight into the level of corruption that took place at the hands of Credit Suisse Group AG’s Hong Kong-based subsidiary,” Sweeney said in a statement.
Internal e-mails showed that bank officials believed the hires were less qualified and that retaining the new employees would be “worthless” if it did not “translate into $.”
One senior banker cautioned colleagues not to drag out the hiring process because the candidate in question was “a princess... not used to too many rounds of interview.”
Credit Suisse agreed to pay a US$47 million fine to the US Department of Justice and about US$30 million in ill-gotten gains to the US Securities and Exchange Commission.
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