An SEC settlement with Deutsche Bank reveals how princelings get a leg up

Qualifications not always required.
Qualifications not always required.
Image: Reuters/Simon Dawson
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One contender for a job at Deutsche Bank was described as “an average-level candidate based on the interviews but failed 2 tests which means she is not good at analysis.” She was hired anyway. Her father happened to be the chairman of a large Chinese state-owned corporation.

Another candidate’s resume “contained numerous grammatical errors and typos,” but a bank employee fixed those for him. Even then, interviewers deemed the candidate, “one of the worst” from the pool, showing “very little interest or understanding of markets/finance/current affairs.”  He was hired anyway, and subsequently promoted. His mother was an executive at a Chinese SOE.

Yet another applicant, in Moscow, was described by a bank employee as “the classic nepo situation that we have every year.” He, too, was hired.

The above details come from a settlement yesterday (pdf) between the US Securities and Exchange Commission and Deutsche Bank, which agreed to pay more than $16 million over charges that it violated US corruption laws by hiring under-qualified relatives of Chinese and Russian government officials in exchange for business deals.

The markets regulator also alleged that the bank “created false books and records that concealed corrupt hiring practices,” and that the lack of documentation on related expenses meant that the bank could not provide reasonable assurances that its employees did not bribe foreign government officials.

The SEC found that since at least 2006, Deutsche Bank hired relatives of executives at state-owned enterprises with the “primary goal” of generating business for the bank. Though the bank enacted policies to crack down on such corrupt hiring practices, the SEC said that they were selectively enforced and not implemented globally until 2015.

Deutsche Bank has neither admitted nor denied the SEC’s findings.

“Deutsche Bank provided substantial cooperation to the SEC in its inquiry and has implemented numerous remedial measures to improve the bank’s hiring practices,” said Troy Gravitt, a spokesman for the bank in New York.

The regulator also noted Deutsche Bank’s cooperation, and that it has implemented remedial measures, including enhancing its anti-corruption compliance program and global hiring practices.