Deutsche Bank has agreed to a $16.2m settlement agreement with the US Securities and Exchange Commission (SEC) to resolve allegations of corrupt hiring practices.
The regulator alleged that the bank hired the relatives of foreign government officials in China and Russia in exchange for business.
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These officials were said to be unqualified or poorly qualified for their jobs.
The breaches occurred between 2006 and 2014, the regulator noted.
SEC stated: “Deutsche Bank, directly or indirectly, hired numerous Referral Hires at the request of government officials in China and Russia including circumstances in which there was evidence connecting the hire to specific business.
“Deutsche Bank was unjustly enriched by approximately $10,785,900 from those transactions occurring within the statute of limitations.”
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By GlobalDataThe hiring of princelings evaded the bank’s merit-based hiring process, which required high grades among others, SEC said. The watchdog also found that the bank’s employees sometimes offered interview questions and answers to the referral hires beforehand.
SEC revealed that in one instance, a Russian referral hire fared so badly that he was considered “a liability to the reputation of the programme”.
Deutsche Bank staff were also accused of creating false records to hide the practice of hiring princelings.
SEC found that even though the bank put in place policies to combat such hiring practices, they were not implemented on a global scale until 2015.
The bank agreed to the settlement without accepting or refuting the allegations.
“Deutsche Bank provided substantial cooperation to the SEC in its inquiry and has implemented numerous remedial measures to improve the bank’s hiring practices,” a bank spokesman said.
Last year, Credit Suisse was fined $77m to settle charges of corrupt hiring practices.
JPMorgan too was fined $264m in 2016 on similar grounds.
Deutsche Bank has been going through difficult times lately.
It recently carried out a massive overhaul, which resulted in 18,000 job cuts.
Besides, the bank is under probe in connection with the 1MDB Malaysian state fund scandal.
