Credit Suisse Fined $77 Million for Hiring People in China for Their Political Connections
Credit Suisse has been fined $77 million for hiring people in China specifically to earn favor with their family members or other politically connected associates. The Wall Street firm will be paying the fine to the U.S. Justice Department and the Securities and Exchange Commission. Credit Suisse is the latest bank to violate the Foreign Corrupt Practices Act, the New York Times reported.
By employing relatives of powerful Chinese leaders with the intention to win business in China, Credit Suisse violated anti-bribery laws and the bank was deemed to have known better.
The bank’s managers in Asia admitted to the fact that they employed some people suggested by powerful Chinese clients between 2007 and 2013. These Chinese clients were top government members and executives of public corporations who suggested relatives be hired with the understanding that they would push lucrative deals the bank’s way.
Candidates Were Exempted From Rigorous Hiring Processes and Performance Reviews
Credit Suisse officials consented that they flouted anti-bribery laws with its hiring processes in Asia. In fact, several court documents indicate that the bank’s top executives warned hiring managers to be lenient with referred relatives of powerful Chinese leaders. In some emails discovered as part of the corruption investigation, the bank’s managers asked that relatives of Chinese officials be exempted from rigorous interview processes.
In one email, bank officials suggested hiring a well-connected job candidate immediately without subjecting them to the prolonged but normal interviewing procedures. As soon as these favored candidates were hired, they received preferential treatment and were even excused from performance reviews.
Credit Suisse Says the Fine Represents No Material Impact to the Bank
Credit Suisse is not the first or only large bank to be fined for their hiring policies abroad. JPMorgan Chase was fined $264 million in 2016 when investigators found proof that the bank’s revenue growths were linked to certain employed individuals. Several other banks were in 2014 asked to submit their hiring records for scrutiny by the SEC to determine how far they went to comply with legal hiring procedures.
“This office is committed to holding companies that conduct business in the United States accountable when they or their subsidiaries corruptly influence foreign government officials for financial gain,” said Richard P. Donoghue, United States Attorney for the Eastern District of New York.
Nicole Sharp, spokeswoman for Credit Suisse, disclosed that the financial institution has improved its hiring compliance processes. She added that the imposed fine “represents no material impact” to the bank.