The Securities and Exchange Commission (SEC) has charged German investment bank Deutsche Bank for violating the Foreign Corrupt Practices Act (FCPA).
The probe was led by FCPA Unit’s Jennifer Moore and Tanya Beard in the Salt Lake Regional Office under Daniel Wadley’s supervision.
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Deutsche Bank has been charged for indulging in bribe payments of nearly $7m, or payments for unknown, undocumented, or unauthorised services.
The SEC order finds that the bank had engaged “foreign officials, their relatives, and their associates” as “third-party intermediaries, business development consultants, and finders” to win global business.
For the use and payment of such intermediaries, the bank had inadequate internal accounting controls.
Furthermore, these illegal payments were recorded as “legitimate business expenses”, for which the bank employees falsified invoices and documents.
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By GlobalDataAccording to the order, Deutsche Bank violated the “books and records and internal accounting controls provisions of the Securities Exchange Act of 1934”.
The bank has agreed to pay a fine of over $120m, of which more than $43m is set aside for settling SEC’s charges.
The settlement took place as part of coordinated resolutions with the SEC and the US Department of Justice (DOJ).
Agreeing to a cease-and-desist order, the investment bank settled with a disgorgement payment of $35m with prejudgment interest of $8m.
There was no civil penalty imposed against the bank. Instead, the SEC ordered the bank to pay $79m in a criminal penalty.
SEC chief of the enforcement division’s FCPA Unit Charles Cain said: “While third parties can assist in legitimate business development activities, it is critical that companies have sufficient internal accounting controls in place to prevent payments to third parties in furtherance of improper purposes.”
