The Securities and Exchange Commission today announced charges against Deutsche Bank AG for violations of the Foreign Corrupt Practices Act (FCPA).
As part of coordinated resolutions with the SEC and the Department of Justice, Deutsche Bank has agreed to pay more than $120 million, which includes more than $43 million to settle the SEC’s charges.
According to the SEC’s order, Deutsche Bank engaged foreign officials, their relatives, and their associates as third-party intermediaries, business development consultants, and finders to obtain and retain global business.
The order finds that Deutsche Bank lacked sufficient internal accounting controls related to the use and payment of such intermediaries, resulting in approximately $7 million in bribe payments or payments for unknown, undocumented, or unauthorized services. The order further finds that these payments were inaccurately recorded as legitimate business expenses and involved invoices and documentation falsified by Deutsche Bank employees.
“While third parties can assist in legitimate business development activities, it is critical that companies have sufficient internal accounting controls in place to prevent payments to third parties in furtherance of improper purposes,” said Charles Cain, Chief of the SEC Enforcement Division’s FCPA Unit.
The SEC’s order finds that Deutsche Bank violated the books and records and internal accounting controls provisions of the Securities Exchange Act of 1934. Deutsche Bank agreed to a cease-and-desist order and to pay disgorgement of $35 million with prejudgment interest of $8 million to settle the action. The SEC did not impose a civil penalty in light of the $79 million criminal penalty paid in the criminal resolution.
The investigation was conducted by Jennifer Moore and Tanya Beard of the FCPA Unit in the Salt Lake Regional Office under the supervision of Daniel Wadley.