Credit Suisse paying US$47m to resolve US Dept of Justice's Asia probe

Zurich

CREDIT Suisse Group AG has agreed to pay a US$47 million penalty to the US Department of Justice to end a probe into whether it hired employees in Asia in exchange for government contracts and other favours.

Credit Suisse's Hong Kong unit reached a non-prosecution agreement with the DOJ regarding its recruitment practices in Asia between 2007 and 2013, according to an e-mailed statement from the Zurich-based bank on Wednesday. The payment will have no material impact on second-quarter results since the bank has already provisioned for the payment, it said.

The settlement resolves another legal issue for Credit Suisse, which has paid roughly US$13 billion in fines since 2008. The bank said earlier this year that entities including the DOJ and US Securities and Exchange Commission were investigating whether the bank hired referrals from government and other state-owned entities in exchange for investment banking business and regulatory approvals, in potential violation of the Foreign Corrupt Practices Act.

The Swiss giant said it has made numerous enhancements to its compliance and control functions since 2013. It added that no criminal charges were brought in the case.

Its Asia-Pacific unit is now a stand-alone unit under the leadership of Helman Sitohang, one of the results of a three-year strategic overhaul by chief executive officer Tidjane Thiam that has pivoted the bank towards wealth management.

Credit Suisse is one of several global banks to have been investigated by US authorities over their hiring practices in Asia. Others included JPMorgan Chase & Co and HSBC Holdings Plc, which also allegedly hired the children of Chinese decision-makers to win business, in violation of anti-bribery laws.

JPMorgan agreed in 2016 to pay about US$264 million to settle the allegations. Investigators at the time described a systematic effort to curry favour with government officials and business executives.

The phenomenon is not restricted to China. Deutsche Bank AG was sued in April in London in connection with allegations that it hired the relatives of high-ranking Russian finance ministry officials to gain business. Nizar Al-Bassam, a former head of corporate finance for Central and Eastern Europe, the Mideast and Africa, argues that the bank had unfairly withheld bonuses from him long after the practice was abandoned. BLOOMBERG