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FCPA Blog Daily News

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Monday
Jun092014

Report: Princeling probe spreads to Deutsche Bank

Deutsche Bank is under investigation for whether it hired the children of Chinese government officials as a way to win work, according to a Reuters report based on unnamed sources.

The report didn't include any details about which agencies are conducting the investigation or if individuals are targeted. But "a source with knowledge of the investigation told Reuters that the probe related to Deutsche's hiring in China."

Last month, the former head of investment banking in China at JP Morgan Chase, Fang Fang, was arrested by Hong Kong’s anti-corruption agency. He's been at the center of an investigation into the bank's "sons and daughters" hiring program.

The U.S. Justice Department and SEC are looking at whether hiring decisions were tied to specific business deals landed by JP Morgan.

"Deutsche Bank said in its prospectus for a 6.75 billion euro ($9.19 billion) rights issue it was cooperating with the enquiries which it said were focused on its hiring practices in the Asia-Pacific region," Reuters said.

The aim of the probe, Deutsche said, was to "determine if any candidates were hired on the basis of referrals from executives at governmental entities including state-owned enterprises in potential violation of the Foreign Corrupt Practices Act or similar laws."

Reuters said Bank of America, Citigroup, Credit Suisse, Goldman Sachs, and Macquarie have all hired relatives of high-ranking Chinese officials in past years.

The FCPA prohibits giving or promising to give anything of value to a foreign official in order to obtain or retain business or gain an unfair advantage.

Hiring a family member or friend of a government official isn't always a violation of the FCPA. But a hiring decision intended to reward or induce an official to award work could be an offense.

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.

Reader Comments (1)

This is United Europe...
June 10, 2014 | Unregistered CommenterBaker Fox
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