DEUTSCHE BANK AG

INDUSTRY

Financial Services/Private Equity

CORPORATE HEADQUARTERS

Berlin, Germany

SUMMARY OF ALLEGATIONS

Nationality of Foreign Officials: China

Summary of Allegations:

23 August 2019 - From 2006 to 2014, Deutsche Bank’s Asian-Pacific (“APAC”) operations routinely extended employment opportunities to the relatives of various foreign government officials at the officials’ request, in an effort to improperly influence the officials to assist the bank in obtaining business advantages. Such “referral hiring” practices bypassed Deutsche Bank’s formal hiring process, enabling less qualified candidates with conflicts of interest to obtain positions with the bank and to work at times without documentation, oversight, or compliance authorization. Deutsche Bank was unjustly enriched by approximately US$10.8 million as a result of the improper hiring practices in APAC and Russia that occurred within the statute of limitations period.  


Approximate Alleged Payments to Foreign Officials: Employment opportunities to family members

Business Advantage Allegedly Obtained: Business deals and advantages. Deutsche Bank was unjustly enriched by approximately US$10.8 million as a result of the improper hiring practices in APAC and Russia that occurred within the statute of limitations period.  

Nationality of Foreign Officials: Russian Federation

Summary of Allegations:

Deutsche Bank is alleged to have breached anti-bribery rules by hiring the children of Russian officials in exchange for business. Apparently, Deutsche Bank has been conducting an internal investigation into its hiring practices, coined "Project Dastan" for the last several years. The investigation was brought to light in a lawsuit filed by former DB executive Nizar Al-Bassam, for USD 4.7 million in bonuses he claims DB is refusing to pay him because of his alleged misconduct in hiring while he was the corporate finance chief for Central and Eastern Europe. Al-Bassam claims that any such allegations have been long abandoned and that DB has no basis to withhold his bonuses. 

Two of the DB employees in question are Elena Arkhangelskaya (hired in 2009) and Alexey Storchak (hired in 2010), whose fathers were both deputy finance ministers overseeing Russian sovereign debt sales at the time of their hires. Al-Bassam denies any improper conduct in connection with their hires. 


Approximate Alleged Payments to Foreign Officials: Employment offers to family members.

Business Advantage Allegedly Obtained: Award of business.

ENFORCEMENT RESULTS

Agencies: United States: Securities and Exchange Commission
Results: Administrative Order, Cease-and-Desist Order, Civil Penalty, Disgorgement
Year Resolved: 2019
Compliance Monitor: No
Ongoing: No
Details:

22 August 2019 - the U.S. Securities and Exchange Commission resolved FCPA claims against Deutsche Bank AG (“Deutsche Bank”) stemming from violations of the books and records and internal accounting controls provisions of the FCPA related to the bank's "referral hiring" practices in APAC and Russia. 

The SEC issued a consensual cease-and-desist order against Deutsche Bank requiring the company to pay a total of approximately US$ 16.2 million (US$ 10.8 million in disgorgement, US$ 2.4 million in prejudgment interest, and a US$ 3 million civil penalty).



DETAILS OF HOW CONDUCT WAS DISCOVERED

Discovery Method: Voluntary Disclosure
Details:

Unspecified


Country:

Discovery Method: Discovered from separate investigation
Details:

The internal probe on hiring practices in Russian was triggered by the bank's previous similar probes in China


Country: Russian Federation

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