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A sign is seen through a tram window outside a Credit Suisse Group AG bank branch in Geneva, Switzerland.(bloomberg)
(Bloomberg) -- Credit Suisse Group AG agreed to pay a $47 million penalty to the U.S. Department of Justice to end a probe into whether it hired employees in Asia in exchange for government contracts and other favors.
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 emailed 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 $13 billion in fines since 2008. The bank said earlier this year that entities including the DOJ and U.S. 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 standalone 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 toward wealth management.
Credit Suisse shares rose 0.4 percent to 15.22 francs as of 1:02 p.m. in Zurich and have declined about 11 percent this year.
Credit Suisse is one of several global banks to have been investigated by U.S. authorities over their hiring practices in Asia. Others including JPMorgan Chase & Co. and HSBC Holdings Plc also allegedly hired children of Chinese decision-makers to win business, in violation of anti-bribery laws.
JPMorgan agreed in 2016 to pay about $264 million to settle the allegations. Investigators at the time described a systematic effort to curry favor with government officials and business executives.
Deutsche Bank AG said in its annual report in March that U.S. regulators were among those investigating its employment history for possible bribery violations, without identifying a country. Nizar Al-Bassam, a former head of corporate finance for Central and Eastern Europe, the Mideast and Africa who left the lender to start his own fund in 2016, is suing the bank for unpaid bonuses he argues were unfairly withheld in respect of hires he made.
(Adds shares in fifth paragraph. A previous version of this story corrected the final paragraph to remove erroneous reference to hiring practice.)
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