Credit Suisse to pay $77M over bribery law violations

Credit Suisse to pay $77M over bribery law violations
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Credit Suisse Group will pay $77 million to settle charges that the bank violated anti-bribery laws by hiring employees connected to foreign government officials, the Securities and Exchange Commission (SEC) announced Thursday.

The Swiss investment bank agreed to pay $30 million to the SEC and a $47 million criminal penalty to the Justice Department to resolve claims it violated the Foreign Corrupt Practices Act.

Credit Suisse agreed to pay the SEC $24.9 million to cover profits made from the referral hires, along with $4.8 million in interest.

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Credit Suisse hired more than 100 employees to its Asia-Pacific division at the request of officials from foreign governments between 2007 and 2013, the SEC alleged. The hires included more than 60 employees referred by foreign officials at more than 20 Chinese state-owned business that were Credit Suisse clients, according to the complaint.

The SEC alleged that Credit Suisse officials knowingly violated internal policies against so-called referral hires, employees brought on at the request of government officials.

Senior Credit Suisse managers in its Asia-Pacific division and Hong Kong office allegedly circumvented the bank’s hiring procedures to bring on employees and interns referred by foreign government actors. Top Credit Suisse officials also discussed the benefits of hiring the referred employees and the businesses they could lose if they ignored referrals from state-run businesses, according to the SEC

The SEC alleged that the practice helped Credit Suisse land tens of millions of dollars in profit from business with the state-owned firms whose officials recommended the new hires. Credit Suisse also received help with regulatory compliance from government officials whose relatives and friends the bank had hired, the SEC alleged.

“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,” said Charles Cain, chief of the SEC enforcement division’s foreign corruption unit.

Credit Suisse spokeswoman Nicole Sharp said in a statement that the bank is “pleased to have reached an agreement” with the SEC and has already imposed new standards to end referral hires.

“This puts this legacy matter behind the bank, and represents no material impact to Credit Suisse," Sharp said. “No criminal charges were brought, and there is no allegation that any clients, investors or counterparties were harmed by the conduct involved in the settlements.” 

The Credit Suisse settlement is the latest U.S. crackdown on referral hires but will cost the bank far less than it did for JPMorgan Chase in November 2016. JPMorgan Chase paid $264 million to settle charges that its Hong Kong–based subsidiary hired more than 100 interns and full-time employees at the request of government workers, winning lucrative contracts in exchange.

The program in question brought in roughly $100 million in revenue for JPMorgan Chase, the SEC said.