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.
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).
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By GlobalDataSEC 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.
