The US Securities and Exchange Commission has induced Deutsche Bank to pay more than $16 million to settle charges that it broke the Foreign Corrupt Practices Act 1977 by hiring the relatives of foreign government officials and other influential clients in return for favours.

According to the SEC’s order, Deutsche Bank employees hired relatives at the request of foreign officials in both the Asia-Pacific region and Russia to obtain or retain business or other benefits. These 'referral hires' bypassed Deutsche Bank’s highly competitive and merit-based hiring process and were often less qualified than people who went through the formal hiring process. The FCPA counts people at the top of state-owned enterprises as foreign officials.

The SEC’s order says that Deutsche Bank broke the part of the Securities Exchange Act 1934 that deals with books, records and internal accountancy. Without admitting or denying the findings, the firm has agreed to 'disgorge' $10,785,900 of its ill-gotten gains and to pay prejudgment interest of $2,392,950 and a $3 million civil penalty.

In 2010, Deutsche Bank enacted a written hiring policy in the Asia-Pacific region to detect and prevent its employees from offering temporary employment to candidates referred by current or potential clients to detect and prevent corrupt hiring practices. It did not follow this policy properly until 2015, when it instituted a global hiring policy.

After 2009, if not before, Deutsche Bank’s Global Anti-Corruption Policy prohibited employees from providing “anything of value” - including job offers - to a government official to gain an improper business advantage. A regional compliance memo in 2009 explained that “hiring interns with links to State Owned Enterprises and Government Officials,” hiring interns who “did not appear to meet [Deutsche Bank’s] basic criteria...with respect to education, qualifications and credentials” and hiring interns “within a short period of a mandated deal being awarded or completed” could be corrupt. Since 2006, however, it had been providing employment to relatives at the request of executives at state-owned entities from whom it sought business.

To help unqualified Asia-Pacific 'referral hires' appear qualified, some APAC-based Deutsche Bank employees even drafted portions of their CVs, provided them with interview questions and answers in advance, and told them how to respond to questions. Deutsche Bank hired some of them without interviewing them at all. It did similar things in Russia between 2009 and 2012, welcoming the offspring of clients or officials into its London office. One young man performed so poorly there that someone in the human resources department called him “a liability to the reputation of the programme, if not the firm.”

The regulator has aready fined Credit Suisse for the same transgressions.