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Wednesday
Jun062018

Credit Suisse pays DOJ $47 million to end Asia princeling investigation

Banking giant Credit Suisse Group AG said Wednesday it has agreed to pay a $47 million penalty to the Justice Department to end an FCPA investigation into hiring practices in Asia.

In a statement posted on the group's website, Credit Suisse's Hong Kong unit said it reached a non-prosecution agreement with the DOJ regarding recruitment practices in Asia between 2007 and 2013.

As of Wednesday morning EST, neither the DOJ nor Credit Suisse had posted online the non-prosecution agreement or a declination.

Credit Suisse first disclosed a DOJ and SEC investigation into its hiring practices in February this year.

Wednesday's company statement didn't mention the SEC investigation.

The bank said in February the agencies wanted to know whether it hired referrals from government agencies and other state-owned entities "in exchange for investment banking business and/or regulatory approvals."

Zurich-based Credit Suisse said the investigations focused on "potential violation of the U.S. Foreign Corrupt Practices Act and related civil statutes."

In 2016, JPMorgan Chase paid $264 million in penalties for awarding jobs to relatives and friends of Chinese government officials to win banking deals. The FCPA enforcement action was brought by the DOJ, SEC, and the Federal Reserve.

In 2015, BNY Mellon paid $14.8 million to the SEC to resolve FCPA offenses for providing internships to family members of officials connected to a Middle Eastern sovereign wealth fund.

In 2016, mobile chipmaker Qualcomm Inc. paid the SEC $7.5 million to settle FCPA offenses for hiring relatives of Chinese government officials. The officials were deciding whether to select the company’s mobile technology products, the SEC said.

Other banks that disclosed FCPA-related investigations based on hiring practices include Citigroup Inc., Barclays PLC, Deutsche Bank, HSBC Holdings plc, and Goldman Sachs Group, Inc., according to documents published on FCPA Tracker.

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Here's the full text of the company statement from Credit Suisse Group AG dated June 6, 2018:

Credit Suisse Hong Kong Ltd. (“Credit Suisse”) is pleased to have reached a resolution in a non-prosecution agreement with the Department of Justice (“DoJ”) to resolve their investigation of hiring practices in the Asia Pacific region between 2007 and 2013.

No criminal charges have been brought. Credit Suisse will pay a monetary penalty of approximately USD 47 million to the DoJ, which has been substantially provided for in prior periods and will therefore have no material impact on its 2Q 2018 financial results, which will be announced on July 31, 2018.

As cited in the agreement, since 2013 Credit Suisse has implemented numerous enhancements to its compliance and controls function and it remains committed to upholding the highest standards of integrity and fair business practices in every jurisdiction in which it operates.

This legacy matter did not impact the services provided to any clients, investors or counterparties.

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Richard L. Cassin is the publisher and editor of the FCPA Blog.