Credit Suisse agreed to pay nearly $77 million in penalties for corrupt hiring policies, the U.S. Securities and Exchange Commission and Department of Justice announced Thursday.
The international bank broke a deal with both federal agencies over a hiring scheme committed by their Hong Kong subsidiary. The parent company, Credit Suisse Group AG, will pay $29.7 million to SEC while the smaller branch owes $47 million to the Justice Department.
Credit Suisse (Hong Kong) Limited (CSHK) was found guilty of doling out positions to friends and family members of Chinese officials, according to a Justice Department press release. In return, bankers would receive business deals from the government agents and “state-owned entities.”
“Bribery can take many forms, including granting employment to friends and relatives of government officials,” said Charles Cain, chief of the SEC Enforcement Division’s FCPA unit. “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.”
CSHK admitted that these referral hires were not as qualified and not strictly vetted yet still received benefits. The referral hires brought in at least $46 million as profits for the company.
“In the banking industry, not every undertaking is fair game,” said Assistant Director-in-Charge William Sweeney. “Trading employment opportunities for less-than-qualified individuals in exchange for lucrative business deals is an example of nepotism at its finest.”
The ploy violated anti-bribery and internal accounting controls provisions of the Securities Exchange Act of 1934.